Six companies listed on the Dhaka Stock Exchange have seen a change in their category classifications, with one company upgraded and five others downgraded due to non-compliance with dividend and AGM requirements.
On Tuesday, six companies on the Dhaka Stock Exchange (DSE) underwent category changes, continuing a trend that began the previous day. According to information shared on the DSE’s official website, the companies affected today are Asiatic Labs, Aftab Auto, Navana CNG, SICL, Orion Pharma, and BBS.
BBS made a notable improvement, moving from the Z category to the B category. However, the remaining companies have been downgraded to the Z category, which signifies non-compliance with regulatory requirements. Specifically, these companies have failed to distribute dividends on time, a key factor that led to their downgrade.
Among the changes, Asiatic Labs has been promoted to the A category, while SICL has been relegated from the N category to the Z category. Aftab Auto, Navana CNG, and Orion Pharma have also moved from the A category to the Z category.
The categorization system of DSE classifies companies into various categories based on their adherence to certain regulations. Companies that hold annual general meetings (AGMs) regularly and distribute at least 10% dividends are classified as A. Companies that conduct AGMs but distribute less than 10% dividends are classified as B. Newly listed companies are initially placed in the N category, while companies in the Z category have failed to meet these standards, such as by not holding AGMs, failing to pay dividends, or halting production for over six months.
The rationale behind this categorization system is twofold. First, it helps investors make informed decisions by distinguishing between well-performing and poorly performing companies. Second, it aids brokers and merchant banks in selecting companies when offering loans backed by shares.
Liberty News’ economic correspondent states that under current stock market regulations, companies in the A, B, N, and G categories are eligible for loans. However, obtaining loans requires more than just category placement. Other criteria must also be met, including maintaining a price-to-earnings (P/E) ratio below 40. Additionally, newly listed companies or those changing categories will not be eligible for loans for the first 30 trading days following the change.
LND/BAIZID
