Z-category stocks dominate weekly gainers despite market slump

Insiders say investors largely targeted low-priced stocks during the week

Despite a steep fall in the benchmark indices last week amid Middle East tensions, several Z-category stocks – commonly considered junk shares – dominated the gainers’ chart on the Dhaka Stock Exchange (DSE).

Premier Leasing emerged as the top gainer of the week, surging 44.44% to close at Tk2.60. Fareast Finance, FAS Finance and Peoples Leasing each rose 41.18% to Tk2.40, while International Leasing advanced 37.50% to Tk2.20.

Other notable gainers included Familytex, which climbed 31.82% to Tk2.90, Tung Hai Knitting rose 30.77% to Tk3.40, and Nurani Dyeing gained 29.63% to Tk3.50. Generation Next increased 25% to Tk3.50, while Appollo Ispat advanced 24.14% to close the week at Tk3.60.

However, all the companies that led the weekly gainers’ chart are currently loss-making, according to market data. Several of them are also facing severe operational challenges.

Market information from the Dhaka bourse shows that Familytex, Tung Hai Knitting, Nurani Dyeing, Generation Next and Appollo Ispat are currently out of operation.

A number of the top gainers are non-bank financial institutions (NBFIs), many of which are struggling with weak financial conditions and potential liquidation risks.

Market insiders said investors largely targeted low-priced stocks during the week, regardless of their financial performance or operational status. They added that speculation surrounding the future of troubled NBFIs has also fuelled interest in these shares.

Earlier, the central bank had initiated steps to liquidate several weak and loss-making NBFIs. However, following the change in government, investors appear to be betting that these institutions may avoid liquidation. Driven by such expectations, many traders have been buying these stocks in hopes of booking short-term gains.

Unilever Consumer Care Limited has recommended a 420% cash dividend for its shareholders for the year ended 31 December 2025, according to a price-sensitive disclosure approved on 5 March.

The company had declared a higher 520% cash dividend for the previous year. The proposed dividend will be placed for approval at the annual general meeting scheduled for 18 May, while the record date to determine eligible shareholders has been fixed for 6 April.

The healthcare and consumer products manufacturer reported improved profitability during the year. Earnings per share rose 19% year-on-year to Tk41.21. However, the net asset value per share declined by 8.30% to Tk116.30.

Despite higher profits, the company posted a negative net operating cash flow per share of Tk21.54, compared to a positive Tk25.62 in the previous year.

In its disclosure, the company said profit growth was mainly driven by strong revenue performance and improved operational efficiency. It also benefited from a one-off gain arising from the reassessment of prior obligations related to technology and trademark royalty payments. Additionally, efficient investment of surplus cash contributed to significantly higher net finance income during the year.

The decline in net asset value per share was attributed to the higher dividend payout in the 2025 financial year compared to the earnings generated during the same period.

Explaining the sharp change in operating cash flow, the company said that although profit increased, net operating cash flow per share dropped significantly due to the settlement of all outstanding Usance Payable at Sight (UPAS) letters of credit during the year, without availing any new UPAS facilities.

As a result, the company experienced a substantial cash outflow during the period compared to the operating profit generated.

UPAS is a widely used trade finance instrument structured as a letter of credit that allows importers to defer payment while exporters receive immediate payment.

Under this arrangement, banks bridge the payment timing gap by financing the transaction, enabling buyers to pay later while ensuring sellers are paid at sight.

Unilever Consumer Care shares closed 0.37% down at Tk2,153 each on Thursday at the Dhaka Stock Exchange (DSE).

According to the shareholding report for January, sponsors and directors hold 92.80% shares in the company, while institutional investors have 3.58%, foreign investors have 0.11% and the remaining 3.51% are held by public shareholders.

Source: The Business Standard