PC House gets bold, takes SEC price band head on and issues statement

In an unprecedented move since its introduction a public listed company as well as 2011’s first victim PC House (PCH) yesterday issued a statement on the price band imposed by regulator Securities and Exchange Commission (SEC).

Though the current form of price band has been in existence since mid September and nearly 10 companies having been subjected to the band, none of the companies issued a statement irrespective of the fact whether the move was uncomforting or not.

PCH became the first company to be slapped the 10% high or low maximum price band for 2011 after its share price rose by over 50% to Rs. 16.10 with 34 million shares traded during the five day period ended on 4 January. On Wednesday the share price plunged by the maximum allowed 10% whilst yesterday it recovered to close at Rs. 15.20, up by 70 cents or 4.8% whilst intra-day it peaked to Rs. 15.80 with 3.95 million shares traded.

PC House in a statement said yesterday that following the imposition of the price band by the Securities and Exchange Commission (SEC) the Company had met senior officers of the SEC to inquire as to the reasons for such imposition.

The communique was titled “PCH Issues Statement on SEC’s Price Band, Reiterates Brilliant Company Performance.”

The statement said that PCH was informed that such bands come into effect automatically on any counter which exceeds a pre-determined level of price movement and volume traded based on each listed company’s free float over a period of 5 days on a daily roll-over basis.  “PCH pointed out that listed companies have no control whatsoever over price movements that occur in the stock market. The share market is purely a secondary market for the purpose of trading listed shares which is totally controlled by buyers and sellers who operate through approved stock-brokers, and the entire market is regulated by the SEC,” the company’s statement added.





In the statement PCH also acknowledged “good performance so far this year and expect to comfortably surpass its financial targets for the year that will end in March 2011.”

It said PCH is also set to launch its new Knowledge Process Outsourcing (KPO) operation through its fully owned subsidiary, Procifinity Limited, by February 2011. “Simply put, PCH will implement all its plans as laid down in the Prospectus issued in connection with its Initial Public Offering in August 2010,” the statement added.

“The Company is extremely bullish about its prospects, given its position as the number one ICT service provider in the country coupled with the fact that the ICT Industry is one of the fastest growing sectors in the economy. The natural consequence of this should be that all present and prospective shareholders of PCH could look forward to extremely attractive returns from the continuous appreciation in the value of the Company’s shares and future dividends,” the statement added.

“The Company said that it was very concerned at any possible negative consequence that the SEC’s price band had against its good reputation, and reiterated that what happens in the stock exchange is totally independent of the operations of PCH.”

There were mixed reactions to the PCH statement. Some viewed it as bold taking the issue head on whereas other firms have been vocal only in private and unofficially. Others described the move by PCH as amateurish conforming to its status of debutant on the Bourse. It was pointed out that the Company was overstepping normal corporate conduct as well as undermining the capital market’s regulator.