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Suzanne Harrison

Hong Kong's stock exchange made 900 telephone calls to companies last month, asking for information about sudden upswings in their share prices.

 Lawrence Fok Kwong-man, the executive director of regulatory affairs, said the companies were requested to release statements explaining the reasons behind the share movements or denying knowledge of how they occurred.

 He said the increase in requests was most likely a result of the craze for Internet stocks in the past two months.

 'As far as price alerts, I can only say it was on the high side,' Mr Fok said.

 In April, the Pacific Century Group was rumoured to be looking for a listed company with technological expertise for a back-door listing.

 This rumour helped to spark a strong run on telecommunications and technology stocks.

 In addition, 'in early May, there had been a couple of announcements about funding being injected into smaller listed companies, so there was what we call a treasure hunt', he said.

 'There was one day we contacted about 80 listed companies. It was crazy,' Mr Fok said.

 Pacific Century settled on Tricom Holdings, whose shares jumped 67.9 per cent to 13.6 cents before they were suspended.

 When they resumed trading on May 4 following the announcement of a potential agreement, they rose sharply to close that day at $1.83.

 The shares of many small-capitalisation and second-tier companies involved in or related to technology also strengthened in this period.

 Shares in Cybersonic Technology jumped 50 per cent on May 3 to $1.23 after making strong gains in the previous week.

 Cybersonic's subsidiaries, ironically, design, manufacture and distribute consumer-electronic products and retail and distribute footwear.

 The company told the stock exchange it could not explain the increase in its share price.

 Another company, Computer and Technologies Holdings, saw its share price rise from a low of 37 cents on April 8 to $1.19 on May 18.

 The information-technology company has not made any announcements about the reason for the gain.

 ABC Communications (Holdings), which provides paging services and sells mobile telephones, was briefly rumoured to be a takeover target.

 Its shares surged from $1.71 on April 1 to a high of $2.62 on May 11.

 On May 12, ABC, at the request of the exchange, said it was in preliminary talks to sell its paging business to CM Telecom International.

 Later that month, the transaction was confirmed.

 Another company that had something to say was SmarTone Telecommunications Holdings, which announced an arrangement with United States Internet search engine Yahoo!.

 On April 12, shares in the mobile telephone company rose 7.06 per cent to close at a three-month high of $24.25.

 Mr Fok said about 35 per cent of the companies contacted last month issued a standard announcement which said there was no information about the company to be disclosed and the company did not know of any reason why its shares had moved.

 He said of the remaining 65 per cent, about 15 per cent stated reasons for the share movements that were subsequently reported through the stock exchange and in the press.

 The other companies of this group were not required to issue statements.

 'In those cases, there were not many shares traded, or [the price changes were] related to movements in the market,' Mr Fok said.

 He said this month was quiet in comparison. 'It's only early June, but it appears to be quieter,' Mr Fok said.

There was one day we contacted about 80 listed companies. It was crazy 



Net craze sends exchange's watchdog scrambling for answers to price swings