Bank Pikko trade does not violate trading rule: JSX<\/p>\n
JAKARTA (JP): The Jakarta Stock Exchange (JSX) said yesterday
\nthat trade in Bank Pikko shares on April 8 did not violate any
\ntrading rules despite the stock's astronomical 207 percent rise
\nfrom Rp 1,300 to Rp 4,000.<\/p>\n
Bank Pikko was suspended from trade at 2:23 p.m. on April 8.
\nThe bank relisted on April 10 immediately after the April 9
\nholiday.<\/p>\n
"The trading of Bank Pikko's shares did not breach trading
\nregulations and was in line with capital market mechanisms," the
\nJSX's president, Cyrill Noerhadi, said yesterday after the
\nexchange's annual members meeting.<\/p>\n
Capital market analysts said Bank Pikko shares were cornered.
\nThis happens when one investor has enough shares to enable him
\nmanipulate the price.<\/p>\n
The shares skyrocketed because several speculative investors,
\nunaware that most of the shares were controlled by one investor,
\nsold short.<\/p>\n
Selling short is when an investor sells a stock he does not
\nown, believing he will be able to buy it back later at a lower
\nprice, thus profiting from the difference.<\/p>\n
But last week Bank Pikko shares did not go down as short
\nsellers expected but kept rising until being suspended.<\/p>\n
"Several investors lost a lot of money because they had to buy
\nthe shares at a very high price," one analyst said.<\/p>\n
Cyrill said if the short sellers failed to deliver the shares
\nthey would be penalized by the Capital Market Supervisory Agency.<\/p>\n
He said the exchange had asked broking houses that traded Bank
\nPikko shares to explain what happened.<\/p>\n
The agency said the four big broking houses that traded Bank
\nPikko shares were Danamon Securities, Bhakti Investama, Mashil
\nJaya Securities and Sassoon Securities.<\/p>\n
Danamon Securities traded 1,480,000 shares worth Rp 2.427
\nbillion in 101 transactions. Bhakti Investama traded 1,315,000
\nshares worth Rp 2.175 billion in 108 transactions. Mashil Jaya
\nSecurities traded 1,333,000 shares worth Rp 2.283 billion and
\nSassoon Securities Indonesia 862,000 shares worth Rp 1.591
\nbillion in 105 transactions.<\/p>\n
Broking houses which made big purchases were Putra Saridaya
\nPersada which traded 6,729,500 shares worth Rp 11.038 billion in
\n424 transactions, Danasakti which traded 4,318,000 shares worth
\nRp 8.566 billion in 394 transaction, Multiprakarsa Investama
\nwhich traded 1,045,000 shares worth Rp 2.244 billion in 99
\ntransactions and Bhakti Investama which traded 559,000 shares
\nworth Rp 918,800 million in 70 transactions.<\/p>\n
But Cyrill did not want clear parameters for suspending
\nstocks.<\/p>\n
He said the characteristics of share prices for each industry
\nand issuer varied.<\/p>\n
"There are no fixed parameters that can be used to trigger a
\nsuspension," he said.<\/p>\n
Under some circumstances a 30 percent rise might be all right
\nand that suspensions had to be approved by the agency.<\/p>\n
But the head of the agency's corporate assessment bureau,
\nHerwidayatmo, said the Bank Pikko rise was engineered and took
\nadvantage of the exchange's poor surveillance.<\/p>\n
"The JSX has the authority to suspend the trading of a share
\nwhen they find such an unrealistic increase", he said.<\/p>\n
The JSX is self-regulatory organization, he said.<\/p>\n
The meeting also discussed PT Multibreeder Adirama Indonesia
\nwhich was suspended at 11:20 a.m. on April 11 after its share
\nprice rose 30 percent from Rp 800 to Rp 1,050.<\/p>\n
The company's shares relisted later that day. (09)<\/p>\n
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