The share price of Ranhill went up 30% to RM2.35 at the close of the morning session today. In the afternoon, the share price retreated sharply to RM2.18 before trading was suspended. What could have caused the initial sharp price run-up & its subsequent retreat?
In short, 2 articles (here & here) have contributed to investors' frantic buying in the morning session. The Star newspaper has reported that Ranhill's oil exploration project in the Citarum block, off West Java might be 5 times larger and also being accessible at a shallower depth than initially projected. The NST newspaper has reported that Ranhill maybe part of the Paradigm Consortium that is in talk to develop a RM9.0 billion integrated oil & gas facility in Doha, Qatar.
While Ranhill has subsequently clarify the serious mistakes in both articles (here & here), I wonder whether the company could have acted more firmly, such as requesting for an immediate suspension to better clarify the errors in both reports. To remain quiet & to allow one's shares to be traded under a false impression to the detriment of the ignorant investors, does not reflect well on the company as well as its directors & management. A duty is owed to the investing public to correct any serious error in any significant report of a company's actual business operation. Would the directors & management have acted differently if the reports have been erroneously negative, instead of positive?
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