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Share prices on the Dhaka Stock Exchange’s (DSE) SME platform surged despite weak earnings, falling profits, and prolonged operational halts at several firms – raising sharp concerns over speculative trading disconnected from business fundamentals.
The SME platform’s index jumped over 43% in the first six months of 2026.
Between late 2025 and September 2026, 17 of the 20 listed companies posted share gains ranging from 0.5% to 153%, driving total market capitalisation up by more than 38% to Tk2,416 crore.
However, financial performance across the board remains sluggish, severely impacted by weak demand, high operating and borrowing costs, and broader economic uncertainty.
Market data show that shares of companies like Al-Madina Pharmaceuticals, Web Coats, Apex Weaving and Finishing Mills, and Master Feed Agrotec more than doubled at various points during this period, despite displaying no meaningful operational improvements.
Al-Madina shares surge 153% despite falling profits
Al-Madina Pharmaceuticals recorded one of the sharpest share price increases on the SME platform, with its stock surging 153% between the end of 2025 and September 2026 to Tk71.30.
The rally came despite a 33% year-on-year decline in profit to Tk1.18 crore in the fiscal 2024-25.
The company’s sales fell 25% during the fiscal year, while short-term borrowings increased 18% and financing costs rose 8%.
Despite weaker earnings, Al-Madina declared a 12% cash dividend for ordinary shareholders for FY25, maintaining the previous year’s rate.
The unusual price movement prompted the Bangladesh Securities and Exchange Commission (BSEC) to direct the DSE to investigate trading in the company’s shares, including possible coordinated manipulation, unusual transactions and the use of undisclosed price-sensitive information.
In September 2026, the regulator ordered further scrutiny of the company’s financial statements, including more than Tk41 crore in trade receivables, sales proceeds, inventory verification and the auditor’s responsibilities concerning its 2024 and 2025 financial statements.
Web Coats shares jump 151% as profits decline
Web Coats, a manufacturer of premium paper and board products, also witnessed a sharp rally, with its share price rising 151% to Tk28.90 during the same period.
However, the company’s profit fell 29% year-on-year to Tk3.84 crore in FY25.
The sharp rise in its share price, despite declining profitability, has raised questions about whether investor demand reflects the company’s financial position and future earnings prospects.
Its sales performance, production levels, operating cash flow and earnings outlook remain important indicators in assessing whether the rally is justified.
Apex Weaving shares double despite production shutdown
A similar disconnect between share prices and business operations emerged at Apex Weaving and Finishing Mills, whose shares more than doubled between 30 December 2025, and 22 June 2026.
The rally occurred despite a prolonged suspension of production following the disconnection of gas and electricity supplies over unpaid utility bills.
During the period, the company’s share price climbed from around Tk7 to nearly Tk15, although it subsequently declined to Tk9 in recent trading.
Serajul Islam, company secretary of Apex Weaving and Finishing Mills, said the company’s overall situation remained unchanged.
“We have no information about why the share price is rising,” he said.
He added that the company could not say when it would be able to resume full-scale production or overcome its existing difficulties.
The rally in a company with suspended operations has raised concerns about speculative trading and the risks investors face when share prices move independently of business performance.
Master Feed shares more than double
Shares of Master Feed Agrotec, a fish and poultry feed manufacturer, also more than doubled between the end of 2025 and 22 June 2026.
The rally came as the animal feed industry continued to face pressure from rising raw material prices, higher production costs and uncertain demand.
Another company in the sector, Oriza Agro Industries, reported a 31% year-on-year decline in profit in FY25, which its officials attributed to falling sales and rising costs.
However, Oriza Agro’s financial performance does not necessarily reflect Master Feed’s position, as the two companies have different operations and financial circumstances.
An assessment of Master Feed’s share price movement would require examining its own audited financial statements, latest earnings disclosures and other price-sensitive information.
BSEC tightens SME investment eligibility rules
Amid concerns over trading on the SME platform, the BSEC issued a directive on 19 May, clarifying eligibility requirements for Qualified Investor Offers (QIOs) and secondary-market trading.
Under the directive, individual investors must hold listed securities worth at least Tk10 lakh, calculated on the basis of either market value or acquisition cost, to apply for QIOs.
However, both individual and institutional investors must maintain a minimum portfolio of Tk30 lakh to trade shares on the SME platform’s secondary market.
Md Sajedul Islam, a DSE director, said the limited number of free-floating shares and low liquidity on the SME platform increased the risk of speculative trading.
Such conditions can drive up share prices even without significant improvements in the companies’ financial performance, he said.
Market analysts cautioned investors against making decisions solely on the basis of rising share prices.
They advised investors to examine earnings per share, price-to-earnings ratios, net profit, operating cash flow, debt levels, dividend records and price-sensitive disclosures before investing.
Analysts also stressed the need for timely corporate disclosures, stronger surveillance of suspicious transactions and publication of investigation findings to improve transparency and investor confidence.
The DSE’s SME platform was inaugurated on 30 April, with trading beginning on 30 September, to help small and medium-sized enterprises raise capital through the stock market.
Currently, 20 companies are listed on the platform.