bdnews24.com :
Private airline United Airways stocks have taken a blow, a day after they shut down their operations calling a fund crisis.
On Thursday, the share fell from Tk 11.80 to Tk 10.90. The company bled Tk 510 million capital in a single day to be at Tk 6.19 billion.
As panic hit the shareholders, the share price at one point hit the circuit breaker, which activates when a share price drops more than 10 percent.
Trading in United shares stopped for about an hour after that and resumed later in the afternoon when the price rose slightly.
In violation of the regulations, United management did not notify Bangladesh Securities and Exchange Commission and the bourses about the suspension of their operations.
At a press conference on Thursday, the new acting MD, Shahinur Alam, tried to pacify investors by saying they had no intention to shut the company down and asked them to be patient.
Launched in 2007, the private airline flew several domestic and a few international routes. In recent times passengers had been complaining about the poor services.
On Tuesday when the news of founding chairman Tasbirul Ahmed Choudhury’s resignation was announced on the Dhaka Stock Exchange website, United share price dropped Tk 0.30 immediately.
On Wednesday evening the company staff announced that they were stopping all flights because there was no money to run them. They also said they had failed to contact the new management.
Dhaka and Chittagong stock exchanges said United Air did not inform them about this decision.
According to the DSE website, general investors own about 74 percent of the airline. Institutional investors hold 17 percent share and the directors have about 8 percent, although laws require them to hold at least 30 percent share.
As trading began on Thursday there was a mad rush on the floor to sell off United shares. Beginning at Tk 11.80 it dropped to Tk 10.70 before the circuit breaker kicked in.
Phoenix Securities MD A Kadir Chowdhury said, “For a long time today there was no purchase order for United Air shares. Those who are holding the shares feel like they’re in trouble.”
Investor Jane Alam said, “At this time when the market is about to turn around, this sort of news can create a crisis of trust. We investors are planning to undertake a programme.”
Another investor, Nurul Amin Akhand, said, “These sorts of incidents make investors lose faith. The SEC should take measures about this issue.”
