Cebu Pacific shares hit 50% price ceiling price after trading error

The share price of Cebu Air Inc. (CEB), operator of the budget airline, hit the 50% price ceiling surge on Wednesday after it nosedived by 37% on Tuesday due to a local trader’s error.

CEB shares closed at P87.00 per share Wednesday, up 50% from P58.00 at the close of trading Tuesday.

“There was an error in execution yesterday on the part of Quality Securities during the no-cancel period,” Timson Securities equity trade Jervin de Celis said.

“There was no way to fix it when a trader places an order between that duration ... 95,000 shares were posted at P58, sending the stock lower by 37%,” De Celis noted.

In a regulatory filing submitted by CEB corporate secretary Rosalinda Rivera, the company said “there is no undisclosed information that may have triggered the unusual price movements of the shares of the corporation on July 9 and 10, 2019.”

The filing was prompted by a query from the Capital Markets Integrity Corp. on what was happening to CEB shares price movements in relation to developments involving the company.

“Based on information received by the corporation, the movement of the share prices from P58.00 to P87.00 on the morning of July 10, 2019 was the result of the share price recovering a trading error made by a Philippine broker in the few minutes of trading on July 9, 2019, which resulted in the decline of the share price to P58.00,” Rivera noted in a notarized certification.

When the market opened Wednesday morning, investors placed millions of shares at the ceiling price of P87 and then either some traders or clients of COL Financial, BPITrade, First Metro Securities, Philstocks, and BDO Nomura sold a total of 7,060 shares at P87 which helped CEB shares recover from Tuesday’s plunge.

“It’s not surprising though to see the stock price recover since there is no other issue with the company’s fundamentals nor its plans for the future,” De Celis said. —VDS, GMA News