Sharemarket operator NZX says it is continuing to review trading activity in SkyCity shares and may refer the matter to the Financial Markets Authority "if appropriate".
New Zealand First leader Winston Peters told Radio NZ today that the FMA must investigate "a huge volume" of the casino operator's shares that were traded last Friday, the same day the Government and the company reached an agreement about a revised design for SkyCity's Auckland convention centre.
It wasn't until Sunday that SkyCity issued a press release saying no state-funding would be contributed to the convention centre and it had agreed to review the design.
SkyCity agreed to build the centre for $402 million in return for extra pokie machines and an extension of its gambling license.
However, in December SkyCity managing director Nigel Morrison said cost overruns and "design improvements" had increased the bill to between $470 million and $530 million.
Friday's trading behaviour was "simply unacceptable", Peters told Morning Report.
It is illegal to trade shares on inside information that hasn't been released to the market.
NZX said it regularly reviewed trading activity and worked closely with the FMA on such matters.
"An initial review of [SkyCity] trading activity from Friday shows volume traded was not unusual following a first-half announcement [released on Wednesday] in a highly liquid, top 10, dual listed stock," NZX said. "Trading activity on Friday was fragmented across a range of different brokers and clients, indicating a response to public information. Per our usual process we are continuing to analyse trades during that period, and may refer the matter to the FMA if appropriate."
SkyCity reported its half-year financial results on Wednesday, but did not make any market announcements on Friday.
Trading activity on Friday was fragmented across a range of different brokers and clients, indicating a response to public information. Per our usual process we are continuing to analyse trades during that period, and may refer the matter to the FMA if appropriate.
According to NZX data, 3.4 million shares, valued at $13.3 million, changed hands on Friday, ahead of the 1.4 million shares traded on Thursday and 2.3 million on Wednesday, when the company reported its half-year financial result.
Despite the higher trading volumes on Friday, SkyCity shares closed unchanged at $3.91.
And more than 3 million SkyCity shares were traded yesterday.
Grant Williamson, of sharebrokers Hamilton Hindin Greene, said Friday's trading activity might seem unusual to people who were unaccustomed with the stock market.
"There really wasn't anything out of the ordinary," Williamson said. "To my mind [Peters' comments] are a lot of hot air."
He said "in house crossing" trades accounted for about 2.3 million of the SkyCity shares traded on Friday, while there was also some international trading activity.
In-house crossing is when a broker has its own buyer and seller - both sides of the transaction - for pre-arranged trades, according to Williamson.
"You take [the crossing trades] out and it was a pretty average volume day."
FMA director of compliance Elaine Campbell said the regulator would discuss the SkyCity issue with NZX after the exchange operator had completed its review.
That may raise the prospect of a further review, Campbell said.
"As a general rule, to ensure the integrity of markets, we do not comment on such matters, however given the nature of the allegations being made we will update the market in due course."