‘10% cap’ at stock exchange to be removed from Monday?

[September 15 2010]

Local share market controller, the Securities and Exchange Commission (SEC), is likely to remove the controversial ‘10% cap’ from next Monday (20). The 10% price band was enforced on August 5 to stop share price manipulation in the Colombo Stock Exchange (CSE) early last month. The SEC last month slapped two ad hoc directives -capping trade price increase at 10% and stopping the all the vital forward trading beyond one trading day. The stick market went into a panic and saw a steep fall in its index on August 6.

The SEC rules came in the wake of suspension of selected shares at CSE trading. Subsequently, the SEC halted trading of shares of ERI (GREG.W’s, except GREG.N), Dankotuwa Porcelain (DPL), Blue Diamonds (BLUE), and Touchwood Investments (TWOD) due to unusual increase in their prices from July 29 to August 3.