KARACHI: The compliance department of the Pakistan Stock Exchange (PSX) has sought clarifications from as many as seven companies for a “substantial increase” in their share prices in a short period of time.
Six of the seven companies saw their share price increase rapidly between Oct 2 and October 31. The seventh company’s share price registered a substantial increase between September 18 and October 23.
These companies are Power Cement Ltd, Jubilee Spinning and Weaving Mills Ltd, HBL Growth Fund, Tri-Star Power Ltd, Dewan Cement Ltd, Crescent Fibres Ltd and Sitara Energy Ltd.
Referring to an unusual movement in their share prices during the mentioned period, PSX Head of Listed Companies Compliance Hafiz Maqsood Munshi asked their respective company secretaries on Nov 3 to respond “promptly” by either disclosing the details of any price-sensitive matter or declaring the company is unaware of any possible reason for the sudden rate hike.
In subsequent correspondence, company secretaries usually feign ignorance about any reason that might have caused the share price to jump suddenly.
Under the prevailing Securities Act, a listed company is required to quickly disclose to the general public if it observes any unusual movement in the price or volume of its traded securities. The company must share with the general public the details of any matter or development that is — or may possibly be — relevant to the unusual movement in price or volumes.
Otherwise, the company should issue a statement of the fact that it’s not aware of any such matter or development.
Capital market regulators around the world keep an eye on any sudden share price movements to protect small investors from fraud. The regulatory requirement is aimed at preventing insider trading, which involves buying and selling of shares by someone with non-public but material information about the stock undergoing a sharp change in its price or trading volume.
Published in Dawn, November 5th, 2023
