Prominence Energy Ltd (ASX:PRM) has announced a trading halt.

There are a few reasons why a stock would go into a trading halt. It is generally ahead of a news announcement.

Prominence Energy Ltd has requested the trading halt for the purposes of planning and executing a capital raising, and an asset acquisition.

Trading halts are typically enacted in anticipation of a news announcement, to correct an order imbalance, as a result of a technical glitch or due to regulatory concerns.

Halts may also be triggered by severe down moves, in what are called circuit breakers or curbs.

The trading halt will remain in place until normal trading commences on December 7, 2021 or when the company announcement is made.