A little something I noticed elsewhere about PTT Exploration stock:
PTT Exploration and Production (OTCPK: PEXNY) (SET: PTTEP) stock has jumped 400% on the OTC. PEXNY stock also seems to have absolutely no reason for doing so. We can see no news or announcements out there. Sure, that could be an issue with our skill at looking for them. But we think not at least. Quite the most confusing aspect here is that the underlying stock in Thailand seems not to have changed. Certainly, not to anything like the same extent.
If the price of one instrument has changed, but not of the other, then there’s an arbitrage there, right? The price difference is large, liquidity low.
There is certainly a potential for arbitrage on the face of it but after you allow for transaction costs and a possibly cumbersome Taka/Baht foreign exchange operation it may not be worth the candle. Are these stock exchanges big enough and the listed number of your target shares sufficiently large that a worthwhile volume wouldn’t move the market against you?
The Tk applies to where the piece is published, but not to the stocks. It’s NASDAQ where the listing is. The Bangkok quote seems to see 2 million shares traded a day. The NASDAQ quote, maybe 70k. Early this morning the price difference was 300%. That’s worth having a go at, yes.
In that case time zones are a factor. I’ve no idea but you may know if the two exchanges are both open at a given time of day.
Indeed. Singapore, NASDAQ etc.
The specific example, the company sponsored ADR went up 300% on 71k shares traded. The Bangkok main quote (2 million a day) moved not at all. A broker sponsored NASDAQ quote moved not at all (not hugely surprising, last trade 20 June -ish) and the Singapore ADR moved not (no trades, but quotes at 10k stock either way).
I agree entirely there are problems with this. How fungible is stuff? Same account? Do you have to carry the short on the NASDAQ sale? Would – say and just an example – Schwab net off?
Dunno.
But as a piece to write for a newspaper stock market section it is interesting, no?
I’ve not even checked the S ADR is the same number of underlying as the NASDAQ quote. But if it is – buying at S$5 (-ish) and selling at $30 US is well interesting. Even in the 100/200 a time the US seems to trade at.