Financial Times

Call for probe into unusual share price movements
Alliance Finance Company Ltd. has called on stock market regulators to probe the unusual fluctuations in the price of its share on the Colombo bourse which it said could be owing to price manipulation.

The company told the Colombo Stock Exchange that it was not aware of the reasons for the unusual price increase and that there is no material information that could affect the price of the share.

This was in response to a CSE query from Alliance Finance about recent unusual price movements. “We would appreciate it if steps are taken to inquire into the transactions as there may be a strong likelihood of price manipulation,” the firm said in a letter to the CSE.

The firm’s share price rose eight rupees or almost five percent to Rs 168.25 on September 14 and touched high of Rs 175 and a low of Rs 160. Touchwood Investments Ltd., which does farming and marketing of mahogany plantations, was another firm whose shares were subject to strange movements.

Its price shot up by Rs 71.75 to close at a price of Rs 243 on Monday, ahead of its announcing a generous three for one bonus and following a change in the firm’s accounting policies for the last financial year in which it declared a big increase in profit.

But the share price fell later and by week’s end closed at Rs 199.75. On Monday, September 12, Touchwood shares soared to a record high of Rs. 249.75 just a day before the company announced the bonus, to close at Rs 243.75 – up a massive Rs 72.50 or 42 percent over the previous close.
The firm is chaired by Roscoe A. Maloney and four directors of the nine member board of Touchwood belong to the Maloney family.

Several low cap illiquid stocks have been behaving strangely in recent months and the firms have told the CSE they were unaware of reasons for the unusual movements in their share prices. Regnis (Lanka) said it was unaware of any information that would have cause the share price to increase.

Another firm, Ceylon & Foreign Trades Ltd., said the company is not aware of any reason for the price increase in its shares and that there is no material or price sensitive information to divulge which might be reasonably expected to affect the price of the company’s shares.Gestetner of Ceylon Ltd. has also informed the CSE that it was not aware of any unusual activity that may have led to the increase in the share price of Gestetner of Ceylon Ltd on September 14, 2005. There is no material information that might significantly affect the trading volumes and the price of the shares.

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