The meteoric rise of "Ductil" and the procedures of the BSE

The information that "Ductil" Buzău (symbol: DUCL) summons its shareholders to decide on the distribution of additional dividends was received at the Bucharest Stock Exchange on Monday morning, but only reached investors at 16:46, after the closing of the trading session.

Meanwhile, the share of DUCL has gained 11.68%, and the average daily turnover was 18,794,4 lei, on Monday, 17.5 times greater than the daily average (1075.53 lei/day) this year, up until February 11th.

Of course, it can't be said that somebody would have used the inside information on Monday, before the convocation of the General Shareholder Meeting was disseminated, but it is not out of the question either.

On Tuesday, February 12th, shares of DUCL were suspended from trading, and on Wednesday, the price rose steeply, 63.54%, with a volume of 563,922.5 lei.

The Code of the Exchange says that the BSE can suspend trading in financial instruments on the regulated market of the BSE, "in order to maintain an orderly market and to ensure equal access to the information needed to invest (investor protection)".

On the Rasdaq however, where "Ductil" Buzău is listed, the Code of the Exchange does not apply.

Anca Dumitru, general deputy director of the BSE, said: "For the Ras-daq, the regulations issued by the CNVM apply, and the BSE does not have its own regulations for this segment". If the BSE has proposals applicable for the Rasdaq, these are remitted to the CNVM, if they are accepted, are subsequently reflected in the amendments of the regulations issued by the CNVM, according to Mrs. Dumitru.

He explained: "As a rule, the reports of the issuers listed on the Ras-daq are disseminated outside the trading program. The reports in question need to be read and processed, and the volume of work is very big, considering the large number of companies on the Rasdaq.

Thus, the reports become visible at the end of the trading session or in the beginning of the session of the next day. There are also exceptional situations when the reports need to be disseminated immediately, such as in the entering into insolvency".

• On the Rasdaq, suspending trading lasts at least one day

As a rule, the summoning of the General Shareholder Meeting on the Rasdaq is followed by a one day suspension of trading in the stock, for information, according to Mrs. Dumitru. The Deputy Director of the BSE explained that the general assemblies which have on their agenda various aspects such as machinery purchases, headquarters expansion, the change of the auditor/censor, creation closing of branches, which are deemed as not requiring suspension from trading.

"The BSE is looking to reduce the delays during which stocks are suspended from trading", Anca Dumitru also said.

This is the explanation for the fact that the shares of DUCL have been absent from the market on Tuesday, February 12th.

On the Rasdaq market, the duration of the suspension from trading in the case of issuers, for equal access to information, is at least one day, as the possibility to suspend trading for just 15 minutes during a trading session, like on the regulated market, does not exist.

"Under exceptional situations, the specialized department of the BSE can decide the suspension an issuer from trading during the trading session as well", Anca Dumitru said.

In 2012, the BSE received, processed and published 7,521 reports pertaining to the Rasdaq market, of which 2109 have been current reports. 2,227 suspensions from trading have been processed and 2,078 resumptions of trading, 96 delistings following decisions of the CNVM (of which 6 through a public takeover offer, 25 through the decision of the Extraordinary General Shareholder Meeting, 16 through dissolution and liquidation, 33 through bankruptcy, 2 which became limited liability companies, 4 through mergers through absorption etc.) and 2 transfers to the regulated market of the BSE.

"I think that these numbers confirm the fact that the BSE respects and protects the rights of the investors and the shareholders on the Rasdaq", Anca Dumitru further said.

On March 18th, the shareholders of Ductil Buzău are summoned to decide on the payout of dividends of 48 million lei out of the profits which the company made in prior years. The proposal comes from the Broadhurst Investments Limited, which owns 11.7% of Ductil.

The company is controlled by "FRO - Airliquide Welding Italia SPA", which holds 72.3% of the shares of Ductil.

Yesterday's meeting ended with a drop of 19.89% of the shares of DUCL, amid a turnover of 12,682 lei.