Unusual trading of Shangri-La Dev. Bank before book closure date for 25% right & 20.85% bonus share was announced

Shangri-La Development Bank Ltd. (SADBL) saw some unusual trading activity last week. SADBL began trading last week, on Jan 24, with an opening price of Rs.388 per share. By the time the week ended, the stock had gained an astounding 42.27% and closed at Rs.552 per share.

In the first 10 days the stock was traded this month (from Jan 3 to Jan 14), the stock saw above average volume in 8 (Jan 5 to Jan 14) of those days. The average volume traded in the 8 day period was 4,962 units which is 2.5 times more than the average trading volume of the stock since August last year (1919 units). The interesting part is that the price increased by just 2.11% during the 5 day period.

In 3 days of trading from Jan 24 to Jan 26 the stock gained 20.08% by a total traded volume of just 1297 units. This unusual trading activity leads observers to suspect foul play.

Furthermore, SADBL has announced book closure date for 25% right share which was endorsed by the bank’s AGM in last fiscal year. The book closure date for right share and 20.85% bonus share is on Magh 21, 2072. Only those shareholders owning shares till Magh 20 will be entitled to the 20.85 % bonus and 25% right share of the company. The register of their shareholders will remain close from Magh 21, 2072 till Falgun 14, 2072 for the purpose of its upcoming (AGM). The aforementioned unusual trading had occurred before the book closure dates were publicly announced by the company.