KARACHI: The compliance department of the Pakistan Stock Exchange (PSX) has sought clarifications from six listed companies for a “substantial” increase in their share prices between July 3 and July 31.

One of the six companies is Meezan Bank Ltd, which is among the largest listed firms in terms of the value of total shares or market capitalisation.

It has a free float of almost 25 per cent, which means the company’s sponsors control about three-quarters of shareholding while the rest is available to the public for trading.

“The PSX has observed that the price in the shares of (Meezan Bank) has increased substantially during the period from July 3 16 to July 31,” said a letter to the company sent by PSX Head of Listed Companies Compliance Hafiz Maqsood Munshi on Tuesday.

The share price of Meezan Bank was Rs92.85 at the close of the July 3 session. It hit Rs131.87 apiece by the end of the July 31 session, showing an increase of 42pc in about a month.

The PSX directed Meezan Bank to furnish “at the earliest” the reason or any material information, which may have resulted in the substantial increase in its price over the period under consideration.

Capital market regulators around the world keep an eye on any sudden share price movements to protect small investors from fraud. They require every listed company to immediately share with the public any new development that may have a material impact on its stock price.

The regulatory requirement is aimed at preventing insider trading, which involves buying and selling of shares by someone with non-public but material information about the stock undergoing a sharp change in its price or trading volume.

The PSX also asked National Refinery Ltd, a producer of petroleum products with a free float of 32.8pc, to explain a substantial increase in its share price between July 3 and July 31.

Its stock rate moved up 41.3pc during the period under review.

The third company to receive a letter from the PSX compliance department was Honda Atlas Cars Pakistan Ltd, an assembler of vehicles. Its share price rose 43.6pc during the period under consideration.

The PSX asked Agritech Ltd, a urea maker with 55pc of free-float, to explain why its share price rose from Rs4.65 on July 3 to Rs6.83 on July 31, reflecting an increase of 46.8pc in about a month.

The stock exchange also sought an explanation for a substantial share price increase from electricity producer Lalpir Power Ltd and Escorts Investment Bank Ltd. Their stock prices rose 50.2pc and 41.2pc, respectively, during the period under review.

Published in Dawn, August 9th, 2023