SEC to monitor stocks related social media activity

Sri Lanka’s capital market regulator is serious about watching/punishing false and misleading social media messages to front-run stocks.

So much so that a separate unit looking at what is being said on social media such as Twitter was set up at the Securities and Exchange Commission (SEC) recently.

The recent wild rides at the Colombo Stock Exchange ( CSE) have this unit on high alert, officials told the Business Times on Thursday.

The SEC also has complaints of a CEO in a leading brokerage acting in concert with another leading broker of a different stockbroking firm to front-run on Galadari Hotels shares to a proxy account. This information also has been submitted on social media to the regulator.

Hopes of the country being open for tourists have seen hotel sector stocks catching the attention of most punters over the past month, especially after the lockdown.

All 10 top gainers on the CSE on October 5 were hotels – Palm Gard e n H o t e l , Tangerine, Royal Palms, Tal Lanka, Hotels Corporation, Dolphin Hotels, Lighthouse Hotels, Serendib Hotels, Renuka City Hotels, and Mahaweli Reach. Two days later eight of the top 10 losers on CSE were also hotel sector shares. “The gains on these stocks are purely sentiment- driven. It took a long time to gather momentum and what is driving these share prices is sheer momentum,” a stock market analyst told the Business Times.