The Bangladesh Securities and Exchange Commission on Wednesday instructed the Dhaka Stock Exchange to investigate the recent surge in Islami Bank鈥檚 share prices.
The stock market regulator issued a directive in this regard on the day.
鈥業t is observed that the price and volume of shares of Islami Bank fluctuated significantly in recent times which seem unusual and suspicious,鈥� the directive read.
鈥楾he DSE is being instructed to investigate into the trading of Islami Bank Bangladesh PLC shares from August 6 to September 25 to identify the reasons, including market manipulation, insider trading and other market abuses, if any, behind such unusual movement of price and volume of units of the scrip,鈥� it added.
The DSE has been given 30 working days to complete its investigation and submit a report to the BSEC鈥檚 surveillance department.
From August 6 to September 25, Islami Bank鈥檚 share price surged by over 115 percent, rising from Tk 32.60 to Tk 70.40.
Market operators said that shareholders and employees of Islami Bank demanded the removal of S Alam Group from the bank following recent political changes in the country.
The 15-year rule of the Awami League government, led by Sheikh Hasina, ended on August 5 through a mass uprising led by students.
Following the political shift, Ahsan H Mansur, new governor of the Bangladesh Bank, took steps to remove S Alam Group鈥檚 nominated board members from Islami Bank on August 25. The central bank replaced the S Alam鈥檚 board members with five new independent directors.
This move by the central bank reportedly boosted investor confidence in Islami Bank.
Market operators also said that the current shareholders of Islami Bank were purchasing additional shares to strengthen their positions in an attempt to prevent other groups from joining the bank鈥檚 board, similar to how S Alam Group previously did.
This may have contributed to the price surge, they added.