The shares of two penny stocks, CMI and MYM Technologies, rose an astounding 2,685 per cent and 1,294.12 per cent, respectively, after the Bombay Stock Exchange allowed trading in counters after several years.
CMI, which last traded at Rs 1.20 on May 30, 2003, opened at Rs 15.10 on BSE and touched a high of Rs 39.95 during the day's trade. It closed at Rs 33.42, up Rs 32.22 from its previous close. The stock saw volume of 1.29 lakh shares, more than 20 times when it was last traded.
Similarly, MYM Technologies, which last closed at 34 paisa on May 18, 2004, opened at Rs seven on BSE and touched a high of Rs 14. It closed at Rs 4.74, up Rs 4.40 from its previous close. The counter saw volume of 2.53 lakh shares, nearly 22 times when it was last traded in May 2004.
At present, there are no circuit filters on the first day of trading for companies whose suspension is revoked. This helps operators jack up stock prices to astronomical levels.
This type of price movement was not justified for these stocks based on whatever financial details were available, brokers said.
"Little is known about these companies. Their latest financials are also not available. Before resuming trading, exchanges should ask these companies to make as much disclosures as possible so that ordinary investors don't get trapped," said a BSE broker.
Financials are available up to the quarter ending March 31 for both CMI and MYM Technologies. BSE had suspended trading in shares of CMI and MYM Technologies on account of non-compliance with listing agreement clauses. On July 29, it revoked the suspension and these stocks resumed trading from Wednesday in the "B" group.
The exchange informed its trading members that the shares held by the promoters or the promoter group in the two companies were under lock-in for three months. This means promoters of these companies can't sell their shares for the next three months.
