The Capital Market Commission is broadening its investigation into transactions on PPC shares in the aftermath of volatility caused by the announcement of its 750 million euro share capital hike. At the same time, the list from the PPC of people who had access to the confidential information is expected with interest at the Capital Market Commission.
Meanwhile, there are more and more questions about the level of corporate governance, the way it has been managed by PPC, how consultants managed confidential information and the quality of information reaching the investing public. The stock market short circuit from PPC shares has caused a headache to the government, which is worried that the capital hike will be hurt by talk of it being mishandled. SYRIZA is already moving a counterattack on the issue.
It is noted that the Hellenic Capital Market Commission always carries out trading audits after each major corporate announcement, however, in the case of PPC, the audits have been expanded for several reasons:
1. The sharp rise in trading in the share of PPC that took place in August, going against the general trading decline of the market. According to the daily data, the average value of PPC share transactions increased by + 73% while in the same period the average daily trading activity for the ATHEX as a whole decreased by -34%. Analysts estimate that the sale of HEDNO attracted investors and to some extent justified the increased trading in PPC shares, however, stock exchange authorities will investigate the possibility that this spike in trading is associated with transactions from people aware of the capital boost.
2. The prolonged slide in share value after the announcement of the impressive offer from Spear WTE Investments (which belongs to Macquarie Infrastructure & Real Assets Group) for the acquisition of 49% of HEDNO. Macquarie's offer was announced late on Friday afternoon 10/9, after the end of the session, news that on Monday 13/9 led the share to 10.5 euros, marking a large increase with gains of + 6.06% while the transactions amounted to 10.78 million euros level which is the share’s third highest trading activity in the last 5 years. The session of 13/9 proved to be a trap for the buyers, as 9 consecutive fall sessions followed, with the share closing last Friday 24/9 at 7.98 euros, recording losses of -24%. The fall of the share after the extremely positive outcome of the sale of HEDNO was difficult to explain until the news of the large capital increase.
3. Last week, before the announcement of second quarter earnings and share capital hike there were press reports with talk of big news ahead, raising suspicions that the news had leaked to a number of people.
The issue is being closely followed by the government amidst concerns of issues relating to corporate governance, stock market reliability, transparency and the functioning of institutions - elements that are considered critical in effort to attract foreign investors and new investment funds.
It is noted that corporate governance and the upgrading of the capital market are a central point in the planning of the Mitsotakis government and in this direction a legislative initiative is underway.
And, lastly, while PPC’s management presented its plan for the capital increase to some investors (market surveillance process), information to domestic retail investors was, and remains, extremely limited. Especially at a time when it is a complex capital increase that includes the waiver of the right of existing shareholders, there have been no indications on the offering price of the new shares.
GIANNIS PAPADOGIANNIS
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