第8频道《早安你好》骆伟嵩 8月4日 现场采访：新加坡股市还有希望上吗？

1) 本地股市上周五闭市3344点，下滑29点或0.88%。请回顾/总结上周本地股市整体表现。

这周的表现因为星期四美国大掉而受了影响。虽然整个星期没什么涨，但是整个7月，海指已经涨了接近100点。

这是一个相当强的表现。

几个月前，大家还记得我提过第三季我们预测海指就会突破3300点，在3300到3450点徘徊。

这个月真的看到了。

虽然这几天下滑，我们还是保持这个观点。STI还是很抗跌的。虽然星期五大掉30点，但是大家不要担心。这一次跌我们觉得可能不深。

最多到3300点就是很大的支持了。

原因是资金还在新兴市场，在新加坡。

很多朋友可能这个月判断大调整，但是可能要失望了

大家要趁着几天的下滑进场，投资一下业绩报告不错的股票。

2)大华银行和星展集团已于上周公布业绩报告。华侨银行将于明天发布业绩。您怎么看本地银行业接下来的表现？房价下跌，贷款业务自然受影响，这会冲击到银行业的走势？

我们曾经说过银行股跟STI的走势是一样的。

sti上银行股上。sti掉，银行股掉。

为什么银行股不跌？因为sti一直涨。

我觉得短期还是可能还会上涨，因为sti还有机会涨一些。

但长期投资就不要，3450就要掉了。

几时买最好？当sti急跌的时候买最好！

两支股票都表现都比预期的期望好一点。但是星期五不同的遭遇。相比这两支股票，如果利率上升，DBS的风险管理会比UOB还要好。

3) 新交所第四季净利下跌12%至7740万元。新交所预期其证券业务在接下来一年将从过去艰难的一个年中复苏，因为股市料将从低波动性恢复至一般的波动性水平。您预料SGX下来会收复失地吗？

-证券业务的营收下跌15%

SGX的业务来自多少人买卖股票，越多人买卖股票，利润越大。

去年下半年STI的表现都很不理想因为股市都不怎么好。

特别是10月小股大掉也造成很多朋友避开股票。这也反映在整年的业绩里。

但是我们觉得SGX现在往上走的可能相当大。

今年自从2月STI一直往上冲。我觉得这驶到投资家对股票更有兴趣了。相信今年SGX业绩会比去年好。

4)新加坡股市将在今后两年内推行多项改革。这估计将影响超过200家股价目前低于$0.20的主板挂牌公司。新规定实行后，这些公司怎么办？股市改革如何影响股民？

-Mar 2015:主板挂牌公司的股价不得低于$0.20（以改善主板股票的素质）

-Jan 2015:所有股票的每张交易单位从1000股减为100股

我觉得这个决策对股民是好的。大家可以看到这样的决策纯粹是希望股民少投资在那些非常小的股票。自从去年十月发生恐慌，SGX就希望防止这件事情再发生。

从两个方面：一是不完太小的股票，而是减低大家的门槛。1LOT=100股，这样能让大家投资少一点，开始留意比较高的价格股。

5) 美国股市上周五继周四大跌后继续下滑，道指闭市16493点，滑落70点。

在近期，华尔街股市创出了过去两年来最为糟糕的单周表现，这足以使得市场投资者开始担心股市是否会出现过度调整？您认为呢？

-标普500指数累计下滑2.7%，创自2012年6月以来的最大单周跌幅

-道指连续第四个交易日走低，上周累计下挫2.8%

不用担心。我觉得美国股市和经济都相当的健康。

道指的支持在16300点。现在道指在16500点左右。跌多200点，大家就可以开始留意了。

6) 海指的阻力点和支持水平在？

就在3300-3450。我觉的海指要跌破3300点的支持不容易。怎么跌，可能怎么反弹回来。

7) 请预计今早本地股市开盘后的走势。

我觉得因为美国星期五下跌的关系，可能会开低，但是我觉得很有可能会回来，开低走高的现象。整体的新加坡股市还是相当的健康的。这种信心会驶到股市还往上升。

Tough times for brokers as trades slow, commissions fall

http://business.asiaone.com/news/tough-times-brokers-trades-slow-commissions-fall

Jonathan Kwok

The Straits Times

Wednesday, Jun 25, 2014

SINGAPORE- Singapore remisier Jimmy Ho remembers the good old days of stock trading when the action came thick and fast and the cash was free-flowing.

"It was very good. You'd answer the phone with your left ear until it became heated and you would have to change to your right ear," said Mr Ho, as he reminisced about the early days of his 20-year career.

"For some remisiers, they could do $100,000 a month in commissions during a bull run."

These days, remisiers like Mr Ho, who is also the president of the Society of Remisiers (Singapore), have a quieter existence, tapping away at the keyboard while monitoring the stock market on multiple screens.

A few times a day, a client calls for help with trades but most deals are done with a click of a button by the clients themselves.

The cash has also dried up, said Mr Ho. "I don't have the exact figures, but my estimation is that more than half of the remisiers earn less than $1,000 (a month, in commissions) nowadays."

The sharp slowdown in business these days is partly due to the World Cup and June school holidays, which bring down volumes on the market.

"Trading activity was low before, but now with the World Cup, it's lower than low," he mused.

Another reason for the slowdown has been the fallout from the penny stock crash.

Penny stocks, which are cheap to buy, used to be a good source of revenue as many small-time punters would do quick trades, resulting in higher volumes and commissions for remisiers.

But after Blumont Group, LionGold Corp and Asiasons Capital rose to record highs before crashing spectacularly last October, retail investors have shied away from such counters.

In turn, commissions earned by brokers have dropped by between 15 per cent and 40 per cent, brokers told The Straits Times.

The industry has been on a long and steady decline, battered by regulatory changes, technological advances and rising competition.

Five years ago, the daily average turnover in May 2009 was $2.27 billion.

Today, the local market's daily average securities turnover is just half of that, standing at $1.17 billion last month.

Changes in regulation have also hit remisiers hard. In December 1999, the Singapore Exchange (SGX) was formed by the merger of the Stock Exchange of Singapore, Singapore International Monetary Exchange, and Securities Clearing and Computer Services.

That came alongside a raft of changes which increased competition in the stockbroking industry and saw commissions slashed.

The changes were good for investors but very bad for remisiers.

Commissions for a remisier are now as low as $10 for an online trade, after deducting the cut to the brokerage firm.

This means brokers will need their clients to make 100 online trades a month to hit the $1,000 mark. But activity has dropped off so much that many struggle to hit that target, said remisiers.

New forms of trading products and services from non-conventional brokers are also making the landscape more competitive.

The growth of contracts for difference has also taken business away from remisiers.

These investment tools provide traders with a quick and easy way to take bets on the direction of the stock without needing to put a large amount of capital down.

Some remisiers still try to set themselves apart, with the trading advice and ideas they provide to their clients.

But some investors - particularly younger ones - prefer to trade and invest by themselves, without the input of their brokers, said remisiers.

It is no wonder Mr Ho feels the future is bleak, with fewer young remisiers joining the industry.

"When they see the situation is like this, the fresh graduates stay away," he said.

Brokers such as Mr Desmond Leong, with about 10 years in the trade, are now turning to trading their own money as means to support themselves and to rely less on commissions.

"The clients aren't providing a lot of brokerage (fees), I've got to bump up my own trading. That's the reality for a lot of the remisiers," said the 35-year-old.

Proposed changes from regulators, who want to stop a practice which allows investors to trade shares without putting up actual capital, could lead to further repercussions.

The end could be near for unsecured "contra trading", which will reduce the credit risk for remisiers - but also further dampen trading activity.

Some brokers are not sticking around to find out.

"A number of remisiers have quit the industry," said 26-year- old Alvin Yong, who has been in the business for three years and is one of the few young faces in the trading room.

Also, a major bugbear among remisiers is the dropping of a midday break by SGX, which was initiated in 2011.

Said Mr Yong: "Who wants to go into a job with no lunch break?"

Barclays to Credit Suisse Shrink Singapore Space: Southeast Asia

Barclays Plc (BARC) and Credit Suisse Group AG (CSGN) are among banks that have given up Singapore office space as lenders pare ambitions for growth in the Asian financial hub.

Global banks vacated about 500,000 square feet of leased space in the city since 2011, enough to seat 3,800 employees, according to estimates by Jones Lang LaSalle Property Consultants Pte. About 80 percent of that is in the central business district, data tracked by the real estate broker show.

Banks reduced staff and hired fewer people than initially planned after they scaled back operations following stricter global regulations on everything from capital to liquidity. Singapore’s four-year campaign to restrict the hiring of foreigners increased competition for local workers and made it more expensive to recruit them -- dissuading banks from adding back-office staff, said Jones Lang LaSalle’s Chris Archibold.

“The banking industry is undergoing a huge amount of change, especially around its capital-intensive businesses, which means there’s less jobs,” Archibold, the company’s Singapore head of markets, said by phone. “Globally and locally, there have been various bits and pieces put in place by various governments that have drastically affected the banks.”

The vacated space won’t have a “material effect” on rents because it’s a fraction of the 64 million square feet of office area available for leasing in Singapore, Archibold added.

Revenue and profitability have come under pressure amid the tighter banking rules that were implemented since the global financial crisis, forcing firms to cut costs and reduce payrolls. Banks worldwide have announced more than 500,000 job cuts in the past four years, data compiled by Bloomberg show.

Financial Hub

Singapore is Asia’s biggest wealth management hub and last year overtook Japan as the region’s largest foreign-exchange center. Banks such as Citigroup Inc. (C) and Standard Chartered Plc have their largest trading floors in Asia in the city-state.

Prime Minister Lee Hsien Loong’s government has been tightening the hiring of foreigners since at least 2010 amid voter discontent over infrastructure strains and increased competition for jobs, property and education. Last September, it said it will require companies to advertise jobs for professionals locally before seeking people from abroad.

“It’s now more of a struggle to find people at the required price points, given current government regulations around import of labor,” said Archibold, referring to the support-function jobs that banks had anticipated to fill when they leased space in 2010 and 2011.

Barclays Trimming

Barclays, the U.K.’s second-largest lender, recently exited 29,000 square feet of suburban office space in Singapore’s Changi Business Park and will leave 15,500 square feet in another eastern suburb by July. It also gave up two stories of prime office space in the financial district that has since been leased by LinkedIn Corp. (LNKD), the world’s biggest online professional-networking service, people familiar with the matter said this month.

Credit Suisse is planning a phased exit from its One Raffles Quay office space in the downtown area this year, according to a person with knowledge of the matter who asked not to be named, citing confidentiality. It’s also seeking replacement tenants at some of its leased office space in Changi, near the airport, the person said.
“Credit Suisse continually reviews its real estate strategy in line with the needs of its businesses,” Juliette Leong, a Singapore-based spokeswoman, said by e-mail on May 14. “Singapore is the largest regional hub for its business and back-office support and remains very committed to its presence in this market.”

Legal Costs

Lenders are also facing rising costs stemming from legal action. Credit Suisse this week agreed to pay a $2.6 billion fine after pleading guilty to U.S. charges that it helped Americans cheat on their taxes.

Banks now occupy 9.5 million square feet of leased office space in Singapore, down from 10 million square feet in 2011, figures from Jones Lang LaSalle Property Consultants show. The real estate firm is a unit of Chicago-based Jones Lang LaSalle Inc. (JLL) Its analysis was based on data for firms that have at least 30,000 square feet leased on the island.

HSBC Holdings Plc (HSBA), Europe’s largest bank, left two buildings in the city in 2011 and 2012, grouping its operations at one in the central business district and another about 7 kilometers (4 miles) from that, said Gareth Hewett, a Hong Kong-based spokesman.

‘Positive Move’

“The consolidation was a positive move for HSBC and its staff, improving efficiencies in a workplace with modern facilities and infrastructure,” he said by e-mail on May 14. As of May last year, London-based HSBC had eliminated more than $4 billion of annual expenses and 46,000 jobs since 2011.

At Barclays, the move from its suburban offices to the 290,000 square feet the bank occupies at Marina Bay Financial Centre will affect about 500 employees, people familiar with the matter said in April. The location is part of the 360-hectare (890-acre) Marina Bay development that Singapore started building in 2005 on reclaimed land as its new financial district. The bank has another 96,000 square feet at One Raffles Quay, also in Marina Bay, according to data provided by the bank in September 2012.

Barclays had 3,500 full-time employees in Singapore in October 2013, according to a press release marking 40 years in the country. That was down from 4,700 about a year earlier, bank data from September 2012 show.

John McGuinness, a Singapore-based spokesman at Barclays, declined to comment for this story.

Job Cuts

Chief Executive Officer Antony Jenkins said on May 8 that Barclays will eliminate 7,000 jobs from its investment bank. That will add to the 12,000 reductions across the group announced in February, bringing the number of positions to go by 2016 to 19,000.

“While some financial institutions have relocated some lower-end roles in their middle and back offices out of Singapore due to cost reasons, they are also retaining and growing higher value-added activities here,” the Ministry of Manpower and Monetary Authority of Singapore said in a joint statement in response to queries.

The Monetary Authority, or central bank, has been working with the financial community to raise the competencies of the local workforce because having a “critical pool” of qualified professionals is a key attraction for global banks to keep their operations in the city-state, according to the statement.

Most Affordable

Singapore remains the most affordable city for office rents among the top five major financial centers, including London, Hong Kong, Tokyo and New York, according to a Cushman & Wakefield Inc. report in February. The annual occupancy cost in Singapore’s central business district is 803 euros ($1,100) a square meter, compared with 1,432 euros in Hong Kong’s Central district and 2,122 euros in London’s West End, the report shows.

Not all banks are trimming space, with U.S. lenders among those expanding their footprint on the island.

While JPMorgan Chase & Co. (JPM) gave up about 50,000 square feet of the 200,000 square feet it occupied in downtown Singapore last year, it added 130,000 square feet in the eastern suburbs, according to a person with knowledge of the matter who asked not to be named as the information is confidential. Darrell Wright, a Singapore-based spokesman for JPMorgan, declined to comment.

Citigroup Inc., whose 10,000 employees on the island make it the largest employer among foreign banks, occupies more than 1 million square feet, up from 981,000 square feet at the end of 2006, Adam Abdur Rahman, a Singapore-based spokesman, said by e-mail on May 16.

For Goldman Sachs Group Inc., the largest prime broker in Asia, its Singapore real estate occupancy is the highest ever, Edward Naylor, a Hong Kong-based spokesman, said in an e-mailed response to questions. The bank is considering plans to occupy more space, he said, without elaborating.

“The regulatory environment for banks in Europe appears to be harsher than it is in the U.S.,” said Jim Antos, a Hong Kong-based analyst at Mizuho Securities Asia Ltd, citing pressure ranging from capital requirements to political debate on profits. “The U.S. banks are frankly just lucky.”

Malaysian play in Singapore gone awry

by risen jayaseelan AND tee lin say

WHAT a mess. The fallout stemming from the massive sell-off of Blumont Group Ltd, Asiasons Capital Ltd and LionGold Corp Ltd is rocking the foundation of these companies and raising questions. 

With such battered share prices and with the billions having been wiped out from their market capitalisation, the model of using their highly liquid SGX-quoted shares, as currency for takeovers, is in jeopardy. Then there?s the stigma to deal with: will bankers, business partners and vendors of assets be as open to deal with them as before? 

The saga has also got punters (at least those who aren?t sitting on huge losses from holdings in these companies) wondering if there?s a play at these current share prices. After all, Blumont is now trading at 17.1 Singapore cents, a far cry from the near S$2.50 level it was at just weeks ago. 

A Singapore-based broker says: ?Investors are enquiring. They are examining what are in these companies. Some think it could be a cheap entry, considering the many acquisitions that have been made by these companies.? 

Others are staying away. ?These companies have to build themselves from scratch. We can?t assess the fallout yet,? said a Malaysian-based investor. Then there are sceptics who reckon that these companies are part of a house of cards that has begun to unravel. From the Malaysian context, they are putting these companies in the same breath of the dramatic falls seen in the share prices of Iris Corp Bhd and Harvest Court Industries Bhd. 

Naturally, the concern is whether there was manipulation during the sudden steep acceleration of the share prices of the SGX trio. It is left to be seen if any investigation or charges are brought about on any parties related to this saga. 

The last time SGX applied the designated-security framework was in April 2008, when the bourse imposed trading curbs on Jade Technologies, now known as Cedar Strategic Holdings, following a failed bid by its president to buy out the engineering and commodities-services firm. Those curbs were lifted after two days, while the curbs on these three companies have continued for five straight days with little indication of when it is going to end. 

The owners and management of Asiasons say that their share price gyrations over the last week or so has got little to do with the business they are in. 

Datuk Jared Lim, a former investment banker with Avenue Securities Sdn Bhd who had in 2007 teamed up with former Bursa chairman DatukMohammed Azlan Hashim to establish the listed private equity company, Asiasons, offers his explanation of what transpired and his prognosis for his company. 

?We appear to be the victims of a very coordinated short-selling effort. There were untrue malicious rumours circulating at the time the short selling started,? he says, adding that operationally, its business as usual. 

?It will take time for our stock price to find its equilibrium, post the designation. And once that happens, we will continue life from there,? he says. 

The same applies for Blumont and LionGold it seems. Big name mining personality Alex Molyneux, a Hong-Kong based former Asia pacific head of metals and mining at Citigroup, swooped in with a plan to buy a 5.2% block of Blumont at the depressed indicative price of S$0.40 per share. 

Saying that?s there tremendous value in Blumont because of its depressed share price, Molyneux also was the main spokesperson for Blumont at its press conference last Tuesday. While he articulated the position of Blumont exceptionally well, it did give the impression that there was a lack of a strong leadership of the company prior to Molyneux?s appearance. CEO James Hong addressed questions more related to historical earnings and the SGX designation, affirming though that there is no investigation being done on Blumont by any of the Singapore market regulators. 

A tenuous link? 

While reports have highlighted that the companies involved in the selldown were linked through a complex web of shareholdings, it is difficult to prove those companies are controlled by one group or party. 

As for the links between the companies, Asiason?s Lim, who incidentally is the son-in-law of Tan Sri Lee Kim Yew of Country Heights fame, is flustered with this ?mosaic theory?. ?The links are tenuous at best. We invested an 8.72% in LionGold when it was in its early growth stage?. As for his wife Dian Lee?s stake in Blumont, he says that was to do with her company Clearwater Development Sdn Bhd selling some units of their project to Blumont, at a time when the latter was active in property. Again that deal was paid for in shares. 

Delving deeper, Asiasons has a 26% stake in another SGX-listed company ISR Capital. Datuk Md Wira Dani Daim (son of former finance minister Tun Daim Zainuddin) also owns close to 18% in ISR. Wira Dani also owns 6.35% in LionGold. The explanation: Lim and Azlan had initially invested in ISR, which had a financial advisory license. They later formed Asiasons and decided to whittle down their stake in ISR and the buyer of that stake was Wira Daim, who incidentally also invested in LionGold. ?It is more an instance of common shareholders and what?s wrong with that?? quips Lim, adding ?We have no involvement in either Blumont or LionGold except for the investments we hold?. 

The acquisitive strategy of significant mining assets aboard by LionGold and Blumont have attracted the attention of big name investors. For example, New York-based asset manager Van Eck Associates owns about 6% of LionGold while Australia-based Macquarie Group has another 4.78% of the company. Blackrock and Invesco hold 0.57% and 0.56% respectively of Asiasons while Vanguard Group and Van Eck hold 0.27% and 0.15% of Blumont, Bloomberg reported. All these funds are sitting on significant paper losses, the Bloomberg report stated. In August, LionGold had been included in the MSCI Small Cap Index while Asiasons is on the FTSE ST Small Cap Index. 

Aside from Molyneux, Blumont has a joint venture with Ines Scotland, said to be one of Australia?s most successful mining executives in the copper sector. The JV called Blumont Copper, seeks to identify investment opportunities in that sector. 

LionGold had in fact emerged as some sort of poster boy for the SGX. In a presentation about listing on the SGX dated May this year, LionGold was highlighted as a notable company in SGX?s ?minerals cluster?, enjoying a high turnover velocity, a successful trail of acquisitions and rise in market values. 

The spectacular collapse after a steep rise in the share prices of the those companies have now caused tongues to wag. 

Names of shadowy figures behind the scene are whispered in circles in Malaysia, who are quite used to the idea of ?operators? pushing up share prices of stocks on Bursa Malaysia in the past. 

The rumour mill is in overdrive with the view that one Malaysian-tycoon is the invisible hand behind all the three companies as well as handful of others on the SGX, that are linked to this group. 

If indeed that is true, it is an impressive feat. 

Stratospheric rises and lofty valuations 

Blumont was trading at a mere 6 cents a share last August. But it hit a high of S$2.45 barely a year later and there were recent sharp rises in recent times. The same applied for LionGold and Asiasons. 

In Asiason?s case, the spike came after they announced a plan to acquire an oil and gas firm, Black Elk, primarily via share issuances at a price of S$2.19 a share. Prior to that the share price was said to see a steady rise as investors began to take notice of the deals the company was executing. 

The deal for Black Elk was at a due diligence stage prior to the panic selling of those three stocks and now would have to be reassessed considering Asiason?s depressed share price. The deal could likely be scuttled although insiders say that discussions are still ongoing. 

The fact remains that the spike up in prices of all these stocks had no earnings to support them. 

Blumont?s Molyneux had this to say at the recent press conference on the valuation of mineral companies: ?Resources in the ground is like having gold bullions in your safe, discounted of course to its extraction cost. Mineral companies have value before they have revenue,? he said, adding that major mining companies were valued this way abroad. 

The stocks, nonetheless, were trading at mind-boggling trailing price earnings multiples and book values, caused mainly by a steep and sudden surge in the share prices of those companies. 

The lofty and unsubstantiated valuations led these stocks to become targets of short sellers, an activity which is allowed in the SGX market, unlike Malaysia?s regulated version. 

Sentiment surrounding these stocks were not helped by the trading restrictions imposed on them by one major Singapore broker, which had placed more than 10 stocks on its restriction list. 

That drew attention of the short sellers who went in for blood after the steep rise. The subsequent price collapse then led to the SGX taking notice and designating these stocks. 

Reports in the Singapore press have alluded to the fact that the SGX?s move could have exacerbated the situation. There was also a comment that SGX should have acted earlier when the SGX-trio shares prices were reaching stratospheric heights. 

The plunge of the three companies has compelled the Singapore Stock Exchange to add circuit breakers into the system by early next year. 

Separately, the SGX said that it is investigating the short-selling in shares of Blumont and Asiasons, even with trading curbs imposed on the two stocks. 

SGX?s head of market surveillance Kelvin Koh said: ?There was short-selling in the two designated counters, Asiasons Capital and Blumont Group, on Monday, contrary to the trading directions given to the designated securities. 

?We will be investigating these cases and take the appropriate disciplinary actions as necessary.? 

SGX said it will assess the trading conditions of the three stocks and lift the designation, when appropriate. 

Earnings impact 

For Asiasons further damage is yet to come. The company will likely suffer an impairment loss from having to mark-to-market the decreased value of its 8.72% in LionGold, which some reckon could be in the range of S$50mil or S$60mil. This hit would in turn negatively impact its shareholders funds and book value. 

But Lim points out that it would only be a one-off impairment. ?LionGold continues to hold one of the largest gold reserves in the region and its price too will find its equilibrium once this force selling and panic is over,? Lim says, adding ?In the meantime Asiasons continues to go about its business of investing.? 

Another impact though is that vendors of assets who had taken the shares of Blumont and LionGold as payment would now be in a bad spot. However, insiders say that such investors had a lot of opportunity to liquidate their positions, considering that the share prices of Blumont and LionGold had appreciated post most of the deals and that those stocks had enjoyed highly liquid trading activity. However it is unknown how many of such holders were fortunate enough to have exited then. 

Sentiment had been strong 

Sceptics reckon that the recent sell down of these Malaysian-controlled stocks leave a bad taste among investors in Singapore. And they speculate that this incident will impact other Malaysian stocks listed there. 

Interestingly, some investors point out that all three stocks were in fact part of a recent Malaysian-themed run up. The proposed takeover of Albedo Ltd, the company that is aiming to be an Iskandar Development Region property player through a reverse takeover deal by Malaysian tycoon Tan Sri Danny Tan, was also in the limelight in August. 

Investors were touting it as ?another Rowsley Ltd in the making?. Rowsley is controlled by Singaporean billionaire Peter Lim. 

Loss-making steel trader Albedo was actively traded in August, with volumes surpassing the billion mark. 

Albedo said it would be able to continue, citing its fund raising exercises and continued support from its principal bankers 

In June, the company said it had entered into a MOU to buy Coeur Gold Armenia Ltd, a gold miner in Armenia. It aborted the purchase on Aug 16 and four days later announced its intention to buy land in Iskandar, Johor. 

Albedo?s shares quadrupled from 2 cents to about 7.6 cents in August. 

About the same time that the Blumont, Asiasons and LionGold started tumbling, Albedo also fell sharply, and is now hovering at the 4.6 cents level. But says one Singapore broker, ?I wouldn?t say that this saga has cast a shadow on Malaysia companies per se. Investors are honing in on whether these companies had real, legitimate businesses?. 

Brokers also said that prior to the designation of the stocks on Oct 4, sentiment had been strong. 

?People were crazy for these stocks. These were known companies. On and off, there would be news articles on the mergers and acquisitions done by these companies,? said one Singaporean broker. Now that all stocks have plummeted, he said that questions were kicking in, and investors were starting to pay more attention to the businesses of these companies. 

?Of course people are panicking. These stocks took a year to go up, and lost 90% of that value in 3 days.?

Enforce rules on directors' trades

Tardy disclosures: SGX, MAS shouldn't accept explanations at face value

Money | Updated today at 01:20 AM
By Goh Eng Yeow, Senior Correspondent

SOMETIMES the actions of insiders speak with more clarity and insight than all the analysts' reports, or efforts of a company to doll itself up, put together.

That is why many investors place great store in closely tracking corporate insiders' trading patterns. Company bosses and big shareholders may, after all, have access to information not known to the public - and they therefore know just when to buy and to sell.

What better show of faith by a boss than to invest his own cash in the business he is running? And if he is selling off huge chunks of his own shares - whether of his own volition or at the behest of banks - what does this say about his commitment to the firm?

As a result, traders pay considerable attention to insiders' trades, especially when big tranches of shares change hands.

Keeping an eye on what insiders are doing might also spare investors the anguish of seeing their investments go up in smoke, especially if they spot unusual trading patterns such as big sell-offs.

Given all this, any tardiness by listed firms in announcing share trades - especially big ones - should be viewed seriously. These lapses can hurt investor confidence badly and dent a company's share price performance. There is, after all, a legal requirement for listed firms to inform investors of any changes in the holdings of directors and substantial shareholders not later than the end of the next business day.

Over the years, another telling sign of a trouble-plagued listed firm is when it starts putting out unpalatable announcements late at night when most folks are getting ready for bed, or are sound asleep already. One may ask how investors can make sensible investment decisions at such late hours, even if they manage to stay up to catch the announcements.

So what are we to make of the recent disclosures made by beleaguered Blumont Group on sales of its shares by the company's chairman Neo Kim Hock and substantial shareholder Ooi Cheu Kok?

On Oct 4, Blumont crashed 56 per cent within an hour of the opening bell. This forced the Singapore Exchange (SGX) to suspend its trading "as there could be circumstances that would result in the market not being fully informed".

Later, it was reported that Mr Neo had sold the firm's stock just days before the counter's plunge on Oct 4. He sold four million Blumont rights - instruments allowing investors to buy Blumont shares - on Oct 2 and another three million Blumont rights on Oct 3. But disclosures were made close to midnight on Oct 7 in a 12-page announcement.

The SGX allowed Blumont to resume trading on Oct 7, after banning contra trades and short-selling to rein in excessive speculation and possible disorderly trading. But that failed to stop the stock from collapsing a further 85 per cent that day.

On Oct 7, when trading resumed, Mr Neo sold 1.41 million shares, as its price crashed. He then unloaded another 34.26 million shares from Oct 8 to Oct 14.

Disclosures on these sales were made one hour before midnight on Oct 14. That meant a seven- day lag on disclosing the first of his latest spate of sales. But Blumont said: "Mr Neo only had knowledge of the bank loan/forced sale of the securities held on Oct 14."

Another insider, substantial shareholder Ooi Cheu Kok sold 32.16 million shares on Oct 7. His sales alone accounted for 28 per cent of the 115.5 million Blumont shares traded on Oct 7.

Like Mr Neo, disclosure of his sales was made only on Oct 14, and again, close to midnight. Even the reason for the sale was similar. "Mr Ooi only had knowledge of the bank loan recall/ forced sale of the securities held on Oct 13," Blumont said.

Between Oct 8 and Oct 14, a further 228.7 million Blumont shares changed hands as it swung between 13 cents and 20 cents. In that period, forced selling of Mr Neo and Mr Ooi's shares totalled 40 million shares, or 17.5 per cent of all the Blumont shares traded.

It begs the question: Would investors (or rather punters) have changed their course of action, if the information on the forced selling of Mr Neo and Mr Ooi's shares was available to them earlier?

As SGX's deputy chief regulator Richard Teng once noted: "Incomplete or inaccurate information may lead to wrong conclusions and a greater risk of loss."

The SGX and its regulator, the Monetary Authority of Singapore, should ensure that listed firms adhere strictly to the guidelines laid down on disclosing of shareholdings by directors and substantial shareholders. They should not accept at face value any explanation for tardy disclosures.

As for Blumont's recent habit of putting out unsavoury announcements close to midnight, this column leaves readers to draw their own conclusions. Enough has been aired on the subject.