By Hiran H.SenewiratneA top official of the Securities and Exchange Commission (SEC) said the 10 percent price band on day-traded stocks would not be lifted in the foreseable future.
"The stock exchange is performing well with daily turnover improving and there is less volatility in the market, so we do not think it would be necessary to lift the price band notwithstanding the speculation that it would be removed in the foreseable future. At the moment, we see no reason why it should be lifted," SEC Deputy Director General Malik Cader told The Island Financial Review.
Cader said possible market manipulation by stockbrokers and other investors were still being looked into and added that efforts are being made to further arrest volatility in market manipulations in future.
Last month, the SEC imposed a 10 percent price band on all stocks after withdrawing the trading suspension imposed on Dankotuwa Porcelain PLC (DPL), Touchwood Investment PLC (TWOD), Blue Diamonds Jewellery Worldwide PLC (BLUE) and the share warrants of Environmental Resources Investment PLC (GREG) owing to unusually excessive price movements and extra ordinary trading volumes.
Days after the price band was introduced the All Share Price Index reached 4,862.86 points, losing 202.21 points or 3.99 percent while MiLanka Price Index fell by 210.30 points, or 3.65 percent, to 5,549.15 points and brokers said the market was falling, but predicted that fundamentally sound stocks would revive the market, which it did.
Yesterday, the All Share Price Index reached 5,858.54 points, while the MiLanka Price Index of more liquid stocks reached 6,036.02 points.
source - www.island.lk
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