While most shareholders of Givot Olam Oil Exploration are waiting on tenterhooks for the firm to publish an announcement that will satisfy the Israel Securities Authority and allow trading in its stock to resume, there are a few investors who have found a way to circumvent Givot's suspension from trading on the Tel Aviv Stock Exchange.
On Sunday, the ISA halted trading in Givot, which is a partnership with participation units instead of shares, claiming its report to the TASE on the final engineering results from the production tests of its exploratory Meged-5 well near Rosh Ha'ayin was unclear and full of holes.
But despite the ISA's decision to halt trading until investors received explanations, there is a way to buy and sell Givot units: off-floor, meaning privately, not through the exchange. The ISA canceled trading but did not cancel the clearing of sales of Givot units, in other words transactions are still allowed. And it seems that a large number of Givot shares have been changing hands over the past two days.
Off-floor trades are an agreement between a buyer and a seller to make a deal, without going through the stock market. They agree on a price and all they need is a stock exchange member to settle the transaction.
For example, the 100net website lists buy and sell offers and the site allows the two sides to meet and do a deal. The company says it has had dozens of calls from people looking to trade Givot shares. While the site does not list prices for the deals, yesterday buy offers were in the range of 50% below Givot's market value when trading was halted, and sell offers were from market value to a 20% discount.
MK Carmel Shama (Likud ) asked to convene the Knesset Finance Committee to discuss the "Givot Olam affair." Shama wants to summon Zohar Goshen, the chairman of the ISA, and his senior officials, as well as officials from the Infrastructure Ministry and representatives of institutional investors.
"The Givot Olam affair raises suspicions that regulation in the area of oil and gas exploration companies is not perfect and it is possible to manipulate [the stock] using gaps in information or manipulative use of data to force the general public to make incorrect decisions," said Shama.
"The exceptional volatility of dozens or hundreds of percentage points in opposite directions on a daily basis shows a failure in the flow of information to the investing public. These companies have transformed from marginal in terms of market value, the public's holdings and turnover to being dominant," he said.
The Tel Aviv Stock Exchange has become a casino, Shama said, and the Finance Committee needs to intervene immediately and establish rules for publishing information in the energy sector.
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