Support our sponsors:

NZX 50 Index	3326.74	2.10
S&P/ASX 200	4282.90	7.80
Dow Jones Industrials	12884.00	5.80

Twitter

Facebook

RSS

Allied Farmers not happy with NZX50 explanation

Monday 22nd February 2010

Text too small?

Allied Farmers remains dissatisfied with two explanations from NZX about its actions last week which informed a non-public group on Monday that ALF shares were to become part of the NZX50 Index from today, and then rescinded that position on Friday.

Allied Farmers shares rose 23% over the week, before falling more than 11% on Friday after the reversal of the earlier indication was sent to market participants. NZX reiterated in a statement this morning that Alied Farmers' short trading history since taking on non-toxic assets of the failed Hanover finance company last year was behind its exclusion from the index of the top 50 New Zealand stocks.

NZX had resolved that "a longer trading period, via a quarterly rather than a monthly index review, would be appropriate before it is reconsidered for inclusion in the index".

"This will ensure that all investors have sufficient time to consider the performance of the stock under its new corporate structure before an index inclusion."

NZX said: "As advised on 19 February, the Index Group at NZX distributes a monthly index memo to a wide group including data vendors, fund managers and market participants. The distribution of index-related information via these channels is common global practice.

"Index information does not originate from the Issuer. As such it falls into the category of broader market-related information that is factored into investment decisions and/or recommendations. There are many factors which are external to an issuer that may be of interest to investors in stocks, such as research reports, credit ratings and the like."

Allied Farmers chief executive Rob Aalloway said the explanation did nothing to allay his concerns about NZX, both from a listed company perspective, and as an investor.

"Here we have the New Zealand market operator disseminating information which will have material influence on a stock to a select few people," he told BusinessWire. "That's the biggest issue I've got."

Allied Farmers would be seeking initial legal advice on the issue this afternoon, Alloway said.

Businesswire.co.nz

Comments from our readers

No comments yet

Add your comment:

Your name:
Your email:	Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.