In the first half of the current financial year, listed company Sea Pearl Beach Resort and Spa Limited's share price increased unusually although its profit fell.
Within the last four months, the company's share price rose by 273.52 percent. However, Sea Pearl's earnings per share (EPS) dropped by 15.62 percent and net profit by four percent.
On November 11 last year, the five-star hotel's share price was Tk21.90 but it stood at Tk81.80 on March 11 this year.
During this time, DSEX, the key index of the Dhaka Stock Exchange (DSE), lost 550 points. But it did not have any impact on the company's share price.
The DSE asked the company if any price sensitive information was the reason for the unusual price hike. But every time the company replied that they did not have any idea about it.
Sea Pearl's Company Secretary Azharul Islam told The Business Standard that the price-sensitive information had no link with the company's share price hike.
However, the company's share price is already in the red zone. According to the audited financial statement of the company, its Price to Earnings Ratio (PE Ratio) was 179.77 points. That means it will take 180 years for the investors of the company to get their investment back.
The PE Ratio is very important for investors of listed companies. It shows how investable a company's shares are.
The Bangladesh Securities and Exchange Commission (BSEC) previously formed inquiry committees at different times to investigate the unusual hike in the share price of the listed companies.
However, the regulator did not form any committee on these companies this time as the market had been continuously downward in the last few months.
When asked about the issue, the BSEC Executive Director Md Saifur Rahman said their surveillance department is keeping close tabs on the companies whose share price rose unusually. "Given the current market trend, it has become difficult to form a committee to investigate these companies."
Azharul Islam told The Business Standard that Sea Pearl did well in the last six months; its revenue increased. But the company's profit fell as its net finance costs and other expenses went up.
According to the financial report of the first half of this year, the company's EPS was just Tk0.27 which was Tk0.32 last year.
The company's net profit at this time was Tk3.23 crore which was Tk3.35 crore last year. Its net asset value per share was Tk10.42 which was Tk10.66 in the previous year.
The BSEC allowed the company in February 2019 to raise Tk15 crore in the fixed price method through initial public offerings. Most of the money is expected to be spent on business expansion.
But a total of 18.75 lakh shares of the institutional investors and 4.61 crore shares of placement holders and alternative funds have not yet been made sellable.
Sea Pearl started as a private company in 2009. On September 17, 2015, the company began its commercial journey.