MAS issues first ‘trade with caution’ on SGX stock
Singapore Exchange at Shenton Way. TODAY file photo
SINGAPORE — The Monetary Authority of Singapore (MAS) today (July 2) warned investors to “trade with caution” on shares of the Singapore Exchange (SGX), which had its biggest jump on Wednesday since July 2009.
This is the first time the SGX has been the subject of such a warning. The bourse itself has dished out the warning on more than 50 companies since the introduction of tougher rules in March last year.
Shares of South-east Asia’s biggest exchange operator jumped 4.5 per cent to S$8.18 apiece on Wednesday. The SGX said it did not have a reason for the rally.
“In view of the trading activities observed and the issuer’s response that it is not aware of any reasons for such activities, shareholders and potential investors should exercise caution when dealing in its securities,” the MAS said in a statement today. “The MAS will investigate all possible transgressions and pursue all actions necessary to maintain a fair, orderly and transparent market.”
Shares of SGX closed down 1.2 per cent at S$8.08 today.
The MAS has regulatory oversight over the SGX, while also working with it to monitor the rest of the country’s listed companies. Two trading disruptions last year earnt the SGX a reprimand and a bar on raising fees until fixes are made.
The stock has underperformed, and so may have jumped on Wednesday because of buying from just one or two fund managers, said Mr Nicholas Teo, a market analyst at CMC Markets.
“This extra policing by the regulator may have the unintended consequence of hampering trades and preventing the creation of a more vibrant market,” Mr Teo said. “I think it’s a bit too much.” BLOOMBERG
