Keya stock falls on disappointing results

Keya Cosmetics turned out to be the biggest loser in the Dhaka Stock Exchange (DSE) on Sunday, with its stock price tumbling 10.3 per cent following disappointing financial declarations of its last two years.

After a two-year hiatus, the toiletries manufacturer’s board of directors on Sunday held its annual general meeting in which it recommended no dividend for the year ended on June 30, 2019 and a 2 per cent stock dividend for the following year.

The company has become irregular in publishing annual reports and holding AGMs after 2015, leaving its retail investors guessing about its financial health. 

Since its 2016-17 financial year, there is no quarterly report of Keya Cosmetics to be found.

In July 2018, the Bangladesh Securities and Exchange Commission fined the directors of Keya Cosmetics Tk 1 lakh each but to no avail.

The fine was for failing to submit its financial statement for the first quarter of this financial year (July – September 2017) on time.

Then earlier this year, out of the blue, it announced a 10 per cent stock dividend for the 2017-18 financial year.

On Sunday, the company, which has been listed since 2001, reported a staggering loss of Tk 1,426.4 crore for the 2018-19 financial year. The losses were big enough to erode its entire net asset value during the year. Its paid-up capital is Tk 1,102 crore.

It swung back to profit in the following year: it logged in a profit Tk 26.5 crore for the 2019-20 financial year. The earnings helped the company at announcing the bonus dividends for the shareholders. 

The disclosure sent the company’s stock price down by 10.3 per cent to Tk 6.10. 

“Since the company failed to retain the trust of the investors, its share prices tumbled,” said a top stock brokerage.

It dawned on the investors that Keya Cosmetics was now completely a junk stock.