M&R spikes on Coronation exit

The sale by fund manager Coronation of all its shares in Murray & Roberts (M&R) is the likely cause of the construction and engineering company’s share rocketing 34% on the JSE on Thursday and Friday, M&R has suggested.

M&R had earlier stated that it was “not aware of what might have led to unusually high trading volumes” in its shares.

Market data show about 96- million M&R shares traded on Thursday, equal to about 22% of the company’s total issued ordinary share capital.

The share price jumped from about R11 in morning trade, reaching a high of about R16 on Friday morning.

“You can make your own deductions, but Coronation was a major shareholder in Murray & Roberts. They are no longer a shareholder,” Ed Jardim, M&R group investor and media executive, said on Friday.

Jardim had earlier on Friday said the identities and intentions of any acquirers were not known to the company and would not be known unless such acquirers either approached the group directly or notified M&R in terms of section 122 of the Companies Act.

The construction and engineering group said the volume weighted average price of its shares traded on Thursday was R14.91, with a high of R15. Trades

were executed at prices that were well above the 30-day and 60-day rolling average prices to mid-February.

The share price stabilised to close at R15.40 on Friday.

Media reports had earlier speculated that news of a proposed R79bn expansion of the Gautrain network might have driven up the price. M&R is part of the Bombela consortium that owns the railway.

Peter Redman, senior technical adviser of market regulation at the JSE on Friday confirmed JSE disclosure rules. He also said that the exchange proactively reviewed market activity on a real-time basis.

“Our initial review of [Thursday’s] activity in Murray & Roberts gives the JSE no reason to believe that any market abuse has taken place.

“However, the parties involved in any trade involving more than 5% of the shares in issue are required in terms of the Companies Act to report their trades to the company within three business days,” Redman said.

M&R would then be required in terms of JSE listings requirements to announce this over the Stock Exchange News Service within 48 hours of being notified.

“After that the situation will become clear,” Redman said.