More than 13 million rights to buy new shares in rural and financial services company Pyne Gould Corporation have been traded in just two days.
The Christchurch company's share price appears to have stabilised at about 40c, closing trading on Friday at 43c after tumbling from $1.18 to a low of 36c in less than two weeks.
Craigs Investment Partners broker Peter McIntyre said a floor may have been established in the share price at about 40c, the underwritten price of Pyne Gould Corporation's (PGC) $237 million six-shares-for-one rights issue.
Mr McIntyre said the large number of shares traded indicated existing shareholders were quitting some of their shares to free up cash so they could buy part of their entitlement.
Prior to PGC announcing its capital raising on September 23, on average 85,000 shares were traded a day.
Since then, the average number of shares traded each day has increased to 920,000.
"That indicates investors have reduced their head share components so they don't have to stump up with so much cash."
The market for the rights was "very liquid", Mr McIntyre said, with prices at about 2.2c each.
He said PGC's shareholding was characterised by elderly investors who predominantly lived in Canterbury and owned large numbers of shares.
It would cost someone owning 100,000 shares $240,000 to take up their full entitlement, so by selling down their holdings they could reduce the financial burden.
