The London Stock Exchange twice froze trading in Countrywide’s shares yesterday after volatile movements - and a new record low price.
The freezing mechanism is known as a Price Monitoring Extension and happens when algorithms monitoring price movements are triggered during volatile trading periods. PMEs were introduced a decade ago and imposed percentages of share price movement above which activities would be temporarily suspended, usually for five minutes, to allow trading to be checked.
They typically occur towards the end of a trading day, which is when the two incidents occurred for Countrywide.
The first PME was at 4.35pm and a statement from the London Stock Exchange at the time said: "An auction call period has been extended in this security by 5 minutes. Auction call extensions give London Stock Exchange electronic order book users a further opportunity to review the prices and sizes of orders entered in an individual security's auction call before the execution occurs. A price monitoring extension is activated when the matching process would have otherwise resulted in an execution price that is a pre-determined percentage above or below the price of the most recent automated execution today."
The second PME was almost immediately afterwards at 4.41pm and a statement said: "A second and final Price Monitoring Extension has been activated in this security. The auction call period is extended in this security for a further 5 minutes. Following the first price monitoring extension this security would still have executed more than a pre-determined percentage above or below the price of the most recent automated execution today. London Stock Exchange electronic order book users have a final opportunity to review the prices and sizes of orders entered in this security prior to the auction execution."
The troubled agency group’s share price hit a new record low of 7.05p yesterday at 4.29pm; at 4.45pm it moved up to 7.45p.
Countrywide’s market capitalisation is now just £121.38m making it an attractive purchase in some analysts’ eyes - but it has consistently said it is not for sale.
Paul Creffield, group managing director at Countrywide, told Estate Agent Today some weeks ago - when the company's annual figures for 2018 were released - that speculation surrounding the future of the company was unfounded and that its Back To Basics turnaround programme was producing positive results.
Rumours had previously suggested that Hamptons International (Countrywide's upmarket residential brand) and Lambert Smith Hampton (the commercial property wing of the group) could be sold off.
Berenberg Bank recently described Countrywide as "investible" again after an extensive difficult period as its turnaround programme was introduced.
* Meanwhile Rightmove shares yesterday hit a new high of 549.27p, suggesting that there was no widespread investor disenchantments with property stocks.
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In all modesty, I could turn round their fortunes in six months. How? simply by introducing my Primary Tenancy business model
A month ago I foretold that the 120m cash injection that was pumped into countrywide, post platt’s departure was now all but eaten up. Now the day of reckoning is very close, the share price will probably collapse in very short order.
If only the company had looked to the future 5 years ago, when it was cash rich and moved forward, instead of relying on too many board members who had zero property knowledge.
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