Bourse operator Korea Exchange is investigating a seemingly unexplainable rally of Codes Combine shares, suspecting a stock price manipulation.

“The Market Oversight Commission is looking into transactions on related accounts,” the KRX said. Buy orders for the stock were found to have been concentrated on seven accounts of foreign brokerage firms, including UBS, Goldman Sachs, Morgan Stanley and Nomura.

Shares in Codes Combine jumped 30 percent to 151,100 won ($127) on Tuesday, rising by the daily limit for four straight days. The shares gained 559 percent in value from March 2, when they were quoted at 22,900 won apiece.

Accordingly, the company’s market cap swelled to 5.7 trillion won from 860 billion won. Only two companies are larger than Codes Combine on KOSDAQ now -- Celltrion and Kakao.

As the share price shot up, the bourse operator halted trading on March 10, requesting the firm to disclose the reason for the rally.

In its response, Codes Combine could not offer any explanation.

Experts said the stock’s small free float appears to be a reason behind its high volatility. Only 0.6 percent of the company’s total outstanding shares, or around 250,000 shares, are publicly trading, with the rest being locked up at the hands of the firm’s largest shareholder Cotton Club and creditors.

About 84 percent of the free floats were held by foreign investors as of Tuesday.

By Lee Sun-young (milaya@heraldcorp.com)