A MERE 21 Amalgamated Telecom Holdings (ATH) shares that traded nine cents lower on the South Pacific Stock Exchange (SPX) on Tuesday this week wiped of some $43million from the SPX market capitalisation and again highlighted the power that small volumes have over the share price of listed companies. The ATH price battering continued the next day, with 1000 shares trading at 10 cents lower to settle at $1.80 per share, wiping off an additional $47.85m.
With ATH making up over 24per cent of market capitalisation, giving it a heavyweight status, any small movement in share price is enough to add or wipe off millions from the aggregate value of shares listed on SPX.
With the ATH share trades alone, SPX lost $90m in two days through just 1021 shares changing hands.
And therein lies the concern over the power of small volume trades, something that the SPX has been aware of, and moves are underway to mitigate this, according to SPX chief executive officer Sheraj Obeyesekere.
Unlike in the bigger markets, where this would imply investors fleeing the stock, SPX, according to Mr Obeyesekere, cannot be analysed in the same way.
In most markets, he said, pricing is either averaged or volume-based and this is where the SPX is likely to be moving to next.
“As part of our trading system upgrade, we will most likely introduce and an averaged pricing mechanism to ensure more stable and representative valuations,” Mr Obeyesekere said.
By Thursday, ATH had recovered in share price, with 1000 shares traded at five cents higher to settle at $1.85 per share, restoring some $23.92 million to SPX market capitalisation. ATH is listed on the SPX and last traded at $1.85 per share.
Note: This article was first published on the print version of the Fiji Times dated May 3, 2025
