From August 3, 2009, the trading halt of stocks to disseminate material announcements by listed companies will be shortened to one hour from one trading session currently.The move will apparently benefit listed companies as there will only be a minimal disruption of their securities from being traded.
Also, investors will benefit too from more trading opportunities as the suspension hours are significantly reduced.
A trading halt refers to a temporary halt in the trading of listed securities upon the release of information that has material effect on the price of the securities.
“A trading halt imposed when making material disclosure is important to enable investors adequate time to evaluate the company's announcements and make informed investment decisions,” said Bursa Malaysia Bhd’s chief executive officer Datuk Yusli Mohamed Yusoff.
He said shortening of the halt period would enhance market efficiency as trading interruption was kept to the minimum, and both the issuer and investor would benefit from being able to trade with minimal interruptions.
Currently, Bursa Malaysia requires listed companies to make material disclosures to the exchange and these announcements are posted on the exchange’s website, ensuring investors have continuous access to corporate information.
For example, the materials announcements made before the trading period starts (9am) as well as between 9am and 11am, a trading halt will be imposed for one hour from the time the material announcement is made.
Order entry and modification will be allowed during this time and the theoretical opening price (TOP) will be calculated, but no matching of trades will take place.
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