Date: October 29, 2013
SIAS, represented by its President and Vice-President, yesterday met officials from SGX, represented by Ms Yeo Lian Sim, Mr Richard Teng, Mr Mohamed Nasser Ismail and Mr Kelvin Koh, to seek clarification on the actions taken by SGX over the 3 previously designated stocks, Blumont, LionGold and Asiasons, as many had suggested to SIAS that SGX was too slow in taking action.
SIAS was advised by SGX that as a regulator it had taken measured steps and used all 3 main regulatory tools available to it, namely, to query the respective companies on unusual trading patterns as and when it happened, suspend the stock and designate the 3 stocks at the appropriate times. This is used in the best interest of the market and all players. SGX conducts real time surveillance and actively monitors the trading in each stock. Its main concern is to maintain a fair, orderly and transparent market. Where any potential market misconduct is detected, these are referred to the MAS and CAD for further investigations.
SIAS understands that unlike most markets, SGX publishes its ‘queries’ of listed companies as an additional regulatory tool to raise a ‘red flag’ to investors that trading activity in a particular security is unusual. SGX made it clear that making a query is not an expression of opinion on the stock queried nor is it the function of SGX to comment on the value of the stock concerned. This places the onus on investors and traders to make informed judgments as to the materiality of the information being disclosed by the companies and how the information could impact the price and valuation of a company. SGX provided to SIAS the charts showing the price movements, corporate announcements and when the SGX queries were made.
SIAS, like many investors, are also concerned on the conjoined fall in price of the three stocks in the same period and call on the authorities to swiftly investigate and take appropriate action if there has been manipulation of the stocks. SIAS accepts the explanation given by SGX on the steps taken by it. SIAS would advise market players that they are operating in a “buyer-be-aware”market and the onus is on them to exercise knowledge and caution in their trading and investments. Investors must be vigilant to look out for red flags when they appear and make an informed decision on their investments. Investors must manage their risk and diversify their portfolio. Traders and investors can look forward to additional red flags when SGX implements the circuit breaker mechanism.
SIAS will also be holding a forum to discuss the rights of the shareholders in the affected 3 stocks on 14th November 2013 at 7pm at MND Auditorium. Admission is by registration only. To register, investors can do so online at www.sias.org.sg
President / CEO