Ask Colin

What does is the implication of a suspension of trading at the request of the company?

The first thing to do is to go to the ASX web site, or some other internet source of company announcements, and see what the company said when it released the announcement. However, usually, it will be rather non-committal.

You could also telephone your broker or the company and ask what information is available on the suspension and when more information is expected to be available.

The usual reason that a company requests suspension is because it has significant information that it is not yet prepared to release to the market. Therefore, if trading continued, the market would be uninformed.

The implication might be positive - a new acquisition, a takeover offer by another company etc. It could also be negative - its bankers or creditors may be threatening to call in receivers, loss of a large tender, refusal of a regulatory approval etc.

It could also be just administrative - a new share issue may be in progress and it is necessary for every shareholder to get their entitlements so that a fair and informed market exists.

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