DSE sees relegation of eight cos to Z-category in 2017 - Share market analysis of dhaka stock exchange, Bangladesh
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07 January, 2018 10:50 AM Source: The Financial Express Bangladesh
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Eight listed companies were downgraded to 'Z' category, a trading platform for worst-performing companies, from the best and medium performing status in 2017 as two of them were not in operation and others did not recommend dividend.

The companies also incurred losses for the year ended on June 30, 2017 against positive earnings for the same period of the previous year.

Of eight companies, six were degraded to 'Z' category from 'A' category, while the remaining two were degraded to 'Z' category from 'B' category, according to information of Dhaka Stock Exchange (DSE).

The companies which were downgraded to 'Z' category in 2017 are: Aramit Cement, United Airways (BD), Hakkani Pulp & Paper Mills, Standard Ceramic Industries, C & A Textiles, Golden Son, Mithun Knitting and Tung Hai Knitting & Dyeing.

According to DSE settlement and transactions regulation, a listed company has to declare at least 10 per cent dividend for its shareholders to be traded under the A-category.

If the company declares less than 10 per cent dividend it will be downgraded to B category.

A company will be downgraded to 'Z' category if it does not declare any dividend or do not hold annual general meeting regularly or is not in continuous operation for more than six months.

Of the companies which were downgraded to Z category in 2017, United Airways (BD) was shifted to 'Z' category from 'A' category as the company was not in continuous operation for more than six months.

C & A Textiles was also downgraded to 'Z' category from 'A' category as the company was not in continuous operation for more than six months.

Tung Hai Knitting & Dyeing was shifted to 'Z' category from 'A' category as the company 'failed' to hold annual general meeting in 2017.

Aramit Cement and Standard Ceramic Industries were downgraded to 'Z' category from 'A' category as they did not declare any dividend for the year ended on June 30, 2017.

Hakkani Pulp & Paper Mills and Golden Son were downgraded to 'Z' category from existing 'B' category as they also did not recommend any dividend for the year ended on June 30, 2017.

According to financial statement for the year ended on June 30, 2017, Aramit Cement incurred a loss of Tk 2.97 per share, while United Airways (BD) reported a loss of Tk. 1.66 per share, Standard Ceramic Industries Tk. 0.39 per share, Golden Son Tk 1.27 and Mithun Knitting & Dyeing Tk 1.84.

These companies earned profits for same period of the previous year 2016.

Categorisation of listed company is important, especially for trade settlement. The settlement of A and B category stocks are completed within three days after transaction. On the other hand, the settlement of Z category shares takes nine working days.

Presently, a total of 49 companies are listed with the premier bourse under 'Z' category.

Among other companies, CVP Petrochemical Refinery was degraded to 'B' category from 'A' category as the company declared less than 10 per cent dividend.

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