Over a fifth of SGX Mainboard stocks in MTP danger zone
Nearly a month after Singapore Exchange's (SGX) minimum
trading price (MTP) rule kicked in, more than a fifth of Mainboard-listed firms
on the local bourse still appear to be in the danger zone.
Comments
Melissa Tan
28 March 2016
Nearly a month after Singapore Exchange's (SGX) minimum trading price (MTP) rule kicked in, more than a fifth of Mainboard-listed firms on the local bourse still appear to be in the danger zone.
There were 172 companies that had a six-month volume-weighted average price (VWAP) below the S$0.20 MTP as at March 23, data from a proprietary Counters for Mainboard Inclusion (CMI) Tracker developed by The Business Times show.
Among these firms, 122 also had a last traded price that was below the MTP - which worked out to around 21.9 per cent of the 556 Mainboard-listed companies for which VWAP data was available.
At least 22 of these stocks have already proposed or gone through a round of share consolidation to meet the MTP requirement, going by data from bourse filings.
But sounding a relatively gloomy note, a solid 98 out of the 122 "CMI" stocks had last traded prices that were lower than their six-month VWAPs, which indicates a recent downward trajectory.
The CMI Tracker figures are updated daily, based on data compiled from SGX's website.
Scraping the bottom of the "CMI" barrel, the Mainboard stock with the lowest VWAP across the bourse was investment holding company Innopac Holdings. Formerly known as Inno-Pacific Holdings, it said in December last year that it planned to transfer to the Catalist board.
Its VWAP was S$0.002587 as at March 23, BT's CMI Tracker shows. SGX has given Innopac an extension until Sept 1 to comply with the MTP rule. Innopac, which was also part of the penny-stock crash in 2013, finished at S$0.001 on Thursday.
Another, perhaps more familiar, name from the penny-stock saga came in second from the bottom in VWAP terms. That was Blumont Group, with a VWAP of S$0.002597 as at March 23. Blumont had proposed a share consolidation to meet MTP but later said in May last year that it wanted to move to the Catalist board.
Blumont was part of an infamous trio of penny stocks at the heart of the 2013 crash, the effects of which still linger on. Of the other two - LionGold Corp and Asiasons Capital, now renamed Attilan Group - LionGold has moved to the Catalist board, while Attilan languishes among the 122 "CMI" stocks with a VWAP of S$0.006392 as at March 23.
These figures come after SGX said in early March it had added 41 companies to its watch-list due to their failure to comply with the MTP rule, which requires Mainboard firms to keep their six-month VWAP at S$0.20 or higher.
But SGX has also granted 69 firms a six-month extension until Sept 1 to comply with the MTP rule. Some of these firms' VWAPs have fallen below the MTP amid recent market volatility, while others have recently completed a round of share consolidation.
SGX said in February it would change its formula for calculating the minimum price to now adjust historical data for share consolidations, to align the formula with industry norms. For example, historical prices of a 10 cent stock that undergoes a consolidation of four shares into one will be adjusted to appear such that the share had always been a 40 cent stock.