TWO former senior employees of UOB Kay Hian Private Limited (UOBKH) were charged on Wednesday for allegedly lying to the Monetary Authority of Singapore (MAS) in relation to reports on a then Catalist aspirant. Lan Kang Ming, 38, and Wee Toon Lee, 34, each face three charges of providing MAS with false information in October 2018 in relation to due diligence reports on an unidentified company applying to list on the Catalist board of the Singapore Exchange. MAS said in a media statement on Wednesday that it was performing an onsite inspection of UOBKH between June and August 2018, to assess the latter's controls, policies and procedures in relation to its role as an issue manager for Initial Public Offering (IPOs). During the examination, Lan and Wee were said to have provided different versions of a due diligence report relating to background checks on a company applying to be listed on the Catalist board of the Singapore Exchange. UOBKH had acted as the issue manager
Comments
R Sivanithy
05 September 2014
When looking at ways to enhance disclosures in the Singapore stock market, it is often instructive to study practices in other stock exchanges to see if any can be adopted for the local bourse. One useful suggestion came from a BT reader a fortnight ago.
In a letter to the paper, the reader proposed that the Singapore Exchange (SGX) follow the Indian authorities and disclose for each stock the proportion of trading that involves shares for actual delivery. If adopted, this would offer investors a more accurate picture of the true demand for a counter as the volume for actual delivery would exclude all speculative activity, particularly contra trading.
With such information, investors can gauge the level of speculative activity at any one time in any one stock before they make their investment decisions. An enhancement to this might be to show the amount of volume generated by proprietary traders since these parties typically enjoy lower brokerage fees and therefore hold an important cost advantage over average retail players.
Another area which could do with added and improved disclosure is the short-selling volume. Currently, SGX requires short sales to be marked as such and, irrespective of whether the positions are closed immediately afterwards, these trades are included in a Daily Short Sell report that is published online the following day, then compiled in a Weekly Short Sell report at the end of the week. Well-intentioned though this practice may be, it is of very limited use.
First, the information is not timely as the daily report is released only the following day. Second, calling it a daily or weekly “short sell” report is misleading since an unknown proportion of the trades could well have been closed out before the end of each session and are therefore no longer short. If the original intention was to give investors an idea of the amount of shorting in the market and therefore a gauge of the level of bearishness, it has to be said that both reports fall short.
There may be lessons in the approaches taken by the Malaysian and Hong Kong bourses, both of which publish regular short-selling reports based on their regulated scrip-lending businesses.
Bursa Malaysia publishes a daily “Regulated Short Selling report” which should be of relevance to those who track this information but it is the Hong Kong model which is especially noteworthy as the exchange releases two reports every day. The first is at noon and is called “short-selling turnover up to morning close today” and the second comes after the close and is called “short-selling turnover up to day close today”.
Investors benefit from this because they get timely data, and short-selling is illegal in Hong Kong other than via the exchange’s regulated business - so the information is also very accurate.
Yet another interesting practice is to break down turnover by category of investors such as foreign versus local institutions, and foreign versus local retail investors. This is the case in Malaysia, where a monthly Trading Participation by Category of Investors report is released by Bursa. In August, for example, the largest contributors to dollar volume were local institutions at 38.5 per cent, while the largest contributors to unit volume were local retail players at just under 50 per cent. Again, this is useful knowledge to investors.