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Ex-Nomura trader tells jury how bosses taught him to lie to clients

When Caleb Chao started working on Nomura Holdings Inc's mortgage-bond desk after graduating from college, he got an education very different from the one offered at Cornell University.
Testifying at the trial of three former Nomura traders, Mr Chao said on Monday he was soon taught how to mislead customers about prices and other details in order to get larger commissions.
"The purpose was to sort of make a client feel like we were working for them, but in reality we were making more money," Mr Chao told jurors in federal court in Hartford, Connecticut. "I just graduated from college and I had no other prior experience. I was relying on how my bosses told me how the market operated."
Mr Chao, who worked for Nomura from 2010 to 2014, is the second former trader at the Japanese firm to take the stand for prosecutors in the trial of three ex-colleagues accused of lying to their clients.
Ross Shapiro, Michael Gramins and Tyler Peters deny wrongdoing, saying their …

Short-seller invasion of Hong Kong spurs an unusual defence plan

One of Hong Kong's most high-profile targets of activist short sellers has hatched an unorthodox plan to fight back.
It's called the "anti-malicious short selling alliance.'' The idea is for companies to band together when bearish traders pounce, sharing crisis-management advice and in some cases even offering equity investments. Fullshare Holdings Ltd, the property company that unveiled the plan on Monday, has faced allegations from two short sellers in the last month.
The proposal highlights how ubiquitous short sellers have become in Hong Kong. Bearish research firms tracked by Activist Insight have started 18 campaigns in the city during the past 12 months, the most since at least 2012.
Short sellers including Muddy Waters and Glaucus Research dismissed Fullshare's idea, saying it would be bad for shareholders.
"The best idea is to have open and transparent reporting, which the accounts are supposed to reflect," said Andrew Sullivan, a managing …

More Singapore companies consider moving to Hong Kong bourse

More Singapore companies consider moving to Hong Kong bourse
The competition between the Singapore Exchange (SGX) and the stock exchange of Hong Kong for listings looks set to intensify as more companies here mull over moves to head to the Republic's rival to raise capital.
Market watchers said this reveals that a growing number of companies are hoping to deepen their business presence in the Greater China market, but these moves are not a guaranteed success.
As Osim prepares its initial public offering (IPO) in Hong Kong as V3 Group, news emerged earlier this month that Pan-United Corp is spinning off its Chinese port division for a Hong Kong listing, while LHN said it is eyeing a dual primary listing there.
Both SGX-listed, Pan-United is Singapore's largest ready-mixed concrete and cement supplier, and LHN is a real estate management firm.
The number of Singapore companies exploring a Hong Kong IPO has "doubled", according to PwC.
    21 Number of newly listed com…

Noble Group's shares and bonds continue in freefall

Shares in Noble Group continued their free fall on Thursday, as analysts hurriedly slashed their target price for the stock following the firm's shock loss for the first quarter.
Its bonds followed a similar trajectory, tumbling on fears that the commodity trader might have problems meeting its debt obligations.
The company's shares crashed another 24 per cent, or 21 cents, to 66.5 Singapore cents on Friday, reaching a new 15-year low just a day after a record 32 per cent plunge.
Its 6.75 per cent bonds due 2020 fell to trade at about 54 cents on the dollar for a yield of 34 per cent; they had started the week at more than 95 cents.
Noble had announced after the market close on Thursday a loss of US$129.3 million despite a rise in revenue, and attributed this to a dislocation in coal markets and higher oil prices.
Its founder Richard Elman told shareholders to expect a "long, hard slog" to profitability, which the company will most likely regain in the 2018/2019 fin…

Alliance Mineral Assets signs lithium offtake deal

Catalist-listed Alliance Mineral Assets Limited (AMA) has secured an offtake agreement with Burwill Holdings Limited to supply the Chinese steel trading and mining firm with lithium concentrate for an initial five-year period.
This marks a major milestone for AMA as it looks to start lithium production at its Bald Hill project in Western Australia by the end of this year. With this, the project has turned from being merely "a story" to reality, said its CEO Tjandra Pramoko in a phone interview with The Business Times.
Under the agreement signed with BCL, a wholly owned subsidiary of Burwill, AMA will sell all of its production between March 15 next year and Dec 31, 2019 at a fixed price of US$880 a tonne for lithium oxide with a concentration of 6 per cent, according to an announcement by AMA's mining partner Tawana Resources on Wednesday.
Burwill will provide prepayment of A$25 million (S$26 million), to be split equally between both AMA and Tawana. Of this, the first …

Magnus Energy sinks deeper into the red in Q3, Companies & Markets

Magnus Energy Group sank deeper into the red in the fiscal third quarter ended March 31, with a net loss of S$1.01 million compared to a loss of S$544,000 a year ago.
This came mainly on the back of weaker revenue, loss from share of results of joint ventures, and higher other operating expenses.
The group's revenue tanked 38.7 per cent to S$3.3 million in the quarter and gross profit margin fell from 20 per cent a year ago to 14.5 per cent due to lower profit margin recorded from the wastewater segment.
Magnus's oilfield equipment supplies and services segment, Mid-Continent Equipment Group Pte Ltd, and the latter's subsidiaries (Midcon Group) currently form the group's main core business.
The overall performance of the Mid-Con Group remains weak, posing a drag on the group, Magnus said in its financial statement released on Monday.
The group has extended a redeemable convertible loan in its investment in PT Hanjungin, with a view to converting the loan into equity i…

Ex-Nomura trader says he was trained to lie to customers, Banking & Finance

A former Nomura Holdings Inc bond trader said he was trained to lie to customers shortly after coming to the company in order to boost the firm's commissions.
Frank DiNucci Jr said the tactics he learned included lying about where Nomura had bought or sold bonds and misrepresenting the price it had paid.
DiNucci was the first witness Monday at the trial of three former Nomura colleagues, Ross Shapiro, Michael Gramins and Tyler Peters, who are accused of lying to customers about the prices of mortgage-backed securities. DiNucci told jurors in a federal courtroom in Connecticut that he learned most of the deceptive practices from Shapiro and Gramins.
DiNucci said he understood that lying and deception was wrong but didn't "put two and two together" when employing the questionable tactics.
"It was just commonplace on the desk," he said. "I didn't think about the reality of it when I was actually doing it." DiNucci, who worked at Nomura from 2009…

SGX regulatory body will take hard look at rules, Companies & Markets News & Top Stories

The new independent body to oversee stock market regulations may review the requirement for listed companies to file quarterly reports and minimum trading price rules.
Its chairman Tan Cheng Han told a briefing yesterday that the Singapore Exchange Regulation, or RegCo for short, will not be afraid to reassess sacred cows in the rules framework.
Professor Tan, who will lead a five-person board, said he intends to bring "a pair of fresh eyes" to the process.
"Let us ask some questions: Are the rules in place today still necessary, given changing conditions? Are they merely in place because they are intended to meet particular challenges that no longer exist?"
Prof Tan, who was speaking at the Metropolis, where the RegCo and its around 100 staff will operate, noted that a market regulator must avoid "chasing shadows" - implementing tough and disruptive rules to address risks that have a low chance of causing problems.
The RegCo board, he said, will be open…

Chairman Chen Tong says ISR Capital to push ahead with Madagascar acquisition

ISR Capital is going ahead with its planned acquisition of a rare earth concession in Madagascar today, says executive chairman Chen Tong at the company’s annual general meeting held earlier this morning.
In response to questions from shareholders, Chen said that the company has engaged a third valuer to appraise the value of the concession. Two earlier valuation reports were rejected by the Singapore Exchange.
Chen said a third valuer has been appointed after consulting the Singapore Exchange and that the report will be drawn up according to the Australian mining valuation standards, otherwise known as the VALMIN Code. “We are confident that the third report will be accepted,” said Chen, at the meeting, attended by just over ten retail shareholders.
The rejected first and second reports had appraised the concession to be worth more than US$1 billion ($1.4 billion). The first report was rejected because SGX had deemed the valuer not qualified while the second report was rejected for …

Can more research inject life into SGX?

There is little money for quality research but stock exchanges are keen to turn things around and fintech may help
The FTSE ST Catalist Index is up 16 per cent since the start of the year, better than the 9.8 per cent rise from the Straits Times Index. But how many people realise this?
The fact remains that Singapore's small- and mid-cap universe is not easy to love. Certain stocks still go for days without seeing a single trade on the Singapore Exchange (SGX). Not because they are suspended, but because they are forgotten by investors.
The problem could lie with the lack of good quality research on stocks. The argument is that prices are a function of good-quality information. If there is little or poor information, investors stop trading in the stocks and liquidity dries up. This is especially so for small- and mid-cap stocks. Fewer than 70 stocks on the SGX have a market cap of more than $2 billion and institutional interest tapers off quickly if liquidity or market capitalisa…