Perpetual Limited (ASX: PPT) is an Australia based financial services company providing various services like funds management advises, financial consultation and many other investment products.
On 14th March 2019, the company received a query for ASX regarding Price & Volume concerns in the company’s stock. ASX clearly stated that an unusual change in the stock price of the company was witnessed on the exchange. The price of PPT’s share rose from a low of $38.43 on Monday, 11 March 2019 to a high of $44.99 today, Thursday, 14 March 2019. This is more than a 17% increase in 4 days. The price was not the only concern; the volume of shares that were being traded in this period also rose to significant levels. To put it in perspective, the average volume of the last 20 days was around 230,000 shares per day (Prior to the price rise). On 11th March 2019, when the price started shooting up, the day closed with a massive volume of more than 1.2 million shares.
All of this price and volume activity has raised some concerns, and the ASX took action by giving notice to the company to give a valid explanation for this. ASX asked several specific questions to the company to which the company has replied on 15th March 2019.
The company was asked that is it aware of any of its information that has not been announced to the market but is known by some people in the market which could explain the recent trading, to this the company clearly denied.
ASX kept on digging further by asking any other explanation that the company might be having that could explain the recent trading. The company explained that all the information and announcements it had released in the recent past might have an impact on the market sentiments. The company referred to the announcement of 1HFY19 financial results declaration on 21 February 2019. The result statements included articulation of the CEO’s direction for the company’s and development of strategic priorities and a focus on its next stage of growth. The CEO also discussed about its broadening approach to the company’s growth agenda and accordingly PPT would over time be focusing beyond value investing.
The exchange also asked about the written confirmation whether the company is complying with the Listing Rules and, in particular, Listing Rule 3.1., to which the company confirmed. Under Listing Rule 3.1, the company is required to immediately disseminate any information to the exchange that could have a material effect on the price of the listed security. Listing Rule 3.1A states the exceptions to the requirement stated in Listing Rule 3.1.
On 21st February 2019, PPT zoomed more than 3% after posting the 1HFY19 result.
On the technical front, the stock price fell by more than 5.7% on ASX and closed at A$41.59 as of 15th March 2019, compared to the previous closing of A$44.13. Surprisingly even after all of these concerns, today’s trading volume for the stock surpassed all previous levels. Today’s volume stood at an astonishing 3.49 million shares, that is the highest ever one-day volume in the last ten years.
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