“..Sharemarket operator NZX has been caught out operating a two-speed information regime that favours institutional investors over mums and dads as it botched a decision over whether Allied Farmers should be promoted to the NZX-50.
In a series of events that had market watchers reeling, NZX on Monday advised institutional investors who subscribe to its pay-per-view NZX Index Memo service that Allied Farmers would be promoted to the NZX-50 and related indices effective from February 22.
Allied’s promotion had been widely anticipated given its equity-for-debt transaction with Hanover Finance had the effect of boosting its market capitalisation.
Although clearly price-sensitive, the news about Allied Farmers’ promotion was not released to the wider market.
This week Allied Farmers shares rose sharply, with market watchers party to the information putting this down to index-tracking funds buying Allied shares in order to bring their portfolios into line with the rejigged index.
However NZX yesterday sent another Index Memo informing subscribers that there would, in fact, be no change to the index ..
.. effectively reversing its decision to promote Allied.
Allied Farmers shares quickly fell in response prompting the company to issue its own statement to the market.
Allied confirmed it had received an email from NZX on Monday notifying it of its imminent promotion and that it understood a number of institutions had bought its shares and boosted its price based on the Index Memo.
It also confirmed it had received a further NZX email early yesterday informing it of the reversal of the decision.
“This has seen Allied Farmers shares fall by over 10 per cent,” Allied said..”
(oo-err..!..)
go to source/story>>Market stunned by NZX flip-flop – Personal Finance – NZ Herald News
