Suspended securities begin trading

Adopted from DailyNews

SEC introduces price band:

Stock trading should be based on fundamentals and the 10 percent price band was introduced to safeguard the integrity of share trading, the SEC said yesterday.

The Securities and Exchange Commission of Sri Lanka (SEC) on Wednesday directed to impose a 10 percent upward and downward price band on all listed securities within any trading day based on the previous day's closing price with immediate effect. "We think that unrealistic price increases or decreases will not reflect the fundamentals of the country's stock market. When considering the price fluctuations, the price band of 10 percent is a high fluctuation", SEC Deputy Director General Malik Cader told Daily News Business. 

"Not only Sri Lanka, but also other countries in the past has taken similar measures to protect investor interest. We need to create an information based decision environment for investors. The information is necessary to take prudent investment decisions, Cader said.

The SEC also lifted the trading halt which was imposed on securities of Dankotuwa Porcelain, Blue Diamond Jewellery Worldwide (Voting and Non Voting Shares), Environmental Resources Investment PLC and Touchwood Investment yesterday.

These companies have made disclosures relating to the price appreciation of its securities as mandated by the SEC directive on Tuesday.

Foreign investors were not affected by the directive issued by the SEC. The country has a mature market place and stakeholders welcome this move, Cader said.