bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

helpersCheckIsPostiesArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

moreOnThisArticles

urlAlias

commentCount

authorLocations

authors

paywallTypes

corrections

sponsorType

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

socialHeadline

headline

flag

firstTopic

glossary

flattenTypeIds

publishedDate

additionalInfoBoxes

images

image

relatedLinks

relatedNewsletters

__typename

createdDate

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

SCMP Reporter

FIRST Pacific Group has asked the stock exchange and the Securities and Futures Commission to investigate suspicious trading in its shares on Thursday.

  The group believes market manipulation may have been behind a sudden fall in its share price at the end of the afternoon trading session.

  Dealers speculated yesterday that the unusual trading might be linked to activities intended to reduce its chances of being picked as a replacement for one of the Jardine companies on the Hang Seng Index when Jardine's delists next year.

  After failing to strike a deal with regulators in Hong Kong, Jardine Matheson and Jardine Strategic plan to delist from the Hong Kong stock exchange on December 31.

  It is understood index operators Hang Seng Index Services are monitoring possible replacement stocks.

   Share prices of other likely candidates have been showing gains.

  First Pacific vice-president Derek Murphy said yesterday: ''I am very disturbed by what has happened in our share price.

  ''It [the unusual trading] is odd; it is extraordinary, and it is out of line.''     On Thursday afternoon First Pacific's share price traded steadily at $4.47.

    But minutes before the close of trading, successive sell orders pushed the share price down 19 cents to a low of $4.28, before closing at $4.33.

  ''That makes a huge difference,'' said Mr Murphy.

  The intriguing tale was supplemented when two special orders totalling almost two million shares were traded just minutes after the close.

    Because they were traded outside market trading hours they were not taken as the closing price for the day.

    The first trade was for one million shares at $1.43 per share, while the second was for 988,000 shares at $4.44 each, more than 10 cents above the official closing price on the day.

  Mr Murphy said it was surprising that the share price should rebound so much after the close, prompting speculation that the share price had been depressed to reduce the market capitalisation of First Pacific.

   ''That effectively wiped $400 million off our market capitalisation,'' said Mr Murphy.

    Market capitalisation is a prime determining factor for inclusion in the Hang Seng Index.

    Hang Seng Index Services is rumoured to be meeting next week to discuss replacements to Jardine on the index, and First Pacific Group is widely considered to be a front-runner.

  The sudden price movement of shares has prompted suspicions that a party might be trying to prevent the company from being included in the index.

  Stock exchange director Paul Phenix confirmed that an enquiry was taking place.

    ''Our surveillance system indicated an unusual pattern of trading and some unusual price movements,'' he said.

  Mr Phenix said that as part of the enquiry, the exchange would ask the brokers involved to produce the transaction documents between the transacting parties in the two special trades conducted after the market closed.

  He confirmed the stock exchange had decided to launch its own enquiry into the matter even before First Pacific asked it to do so.

    ''We have a system that throws up anomalies and it actually shows who is buying and selling,'' said Mr Phenix.

    He said the stock exchange gets a few anomalies each day and 99 per cent of them are legitimate.

  Brokers said the trading on Thursday could have a valid explanation.

  ''There is so much media hype about compliance that people would have to be very careful with what they do,'' said one trader.

    But with so much riding on the decision over which companies get to replace Jardine Fleming and Jardine Strategic on the Hang Seng Index, tensions are running high.



First Pacific asks for share investigation