Islami Bank shares surge from floor price after 14 months
With the political regime change earlier this week, Islami Bank Bangladesh PLC shares have surged from the floor price after a 14-month hibernation.
The first move to kick off the floor price of Tk32.6 was on Tuesday (6 August) following the Sheikh Hasina government's fall on Monday. However, having an intraday rally to Tk33.9 the stock was beaten down to the floor price again.
Meanwhile, the old employees who joined the country's largest private sector lender before a takeover by Awami League backed business group S Alam, announced Wednesday (7 August) that they will roll back the organisational structure to the previous state by undoing the changes that took place after 1 January 2016.
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Islami bank shares surged by 9.8% to Tk35.8 on Wednesday and closed without any bidder at the top circuit—the highest allowable price for the day.
Stockbrokers said the political regime change is raising investors' hopes for meaningful action against banking scams during Sheikh Hasina's regime alongside steps to improve the banking sector's health.
Islami Bank posted an earnings per share of Tk2.22 for the first six months of the year, which was Tk2.13 for the same period last year.
The optimism helped increase fund flow into banking stocks and the higher demand was reflected in the rally in several other banking stocks, including BRAC Bank and United Commercial Bank.
Bangladesh Securities and Exchange Commission (BSEC) imposed a floor price at the end of July 2022 for individual scrips so that their prices cannot fall below that despite a deterioration in the macroeconomic and business outlook.
Earlier this year, the regulator withdrew the floor prices in phases except for six — Islami Bank, Beximco Limited, BSRM Ltd, Khulna Power, Meghna Petroleum and Shahjibazar Power.
However, amid a freefall post-floor withdrawal, the regulator narrowed down the bottom circuit breaker to 3% so that no stock can fall by more than 3% a day and the move made selling declining stocks a tough task for investors.
