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Showing posts from August, 2017

SGX Regco needs backing from better enforcement

The Singapore Exchange's new regulatory unit SGX Regco - known as Singapore Exchange Regulation Pte Ltd in full - commences operations in about a month's time. Its incorporation represents the latest step in an evolutionary process that began some 17 years ago when SGX was first formed and floated on the stock market as a listed regulator, an arrangement that has not sat comfortably with the market and, it would be fair to say, one that the exchange itself has struggled to justify.
So it is that the formation of SGX RegCo was announced in April, the intention being that it will be a separate, independent body to oversee listing and regulatory issues as well as conduct surveillance and enforce market discipline.
Since then, there have been calls to make SGX RegCo, which will be a wholly owned SGX subsidiary, truly independent of the exchange and not influenced in any way by profit-driven objectives. This is a valid goal as it is important not only for SGX RegCo to be operation…

Malaysian businessman Siaw Lu Howe launches mandatory takeover bid for Blumont

Blumont Group has received a mandatory takeover bid from Malaysian businessman Siaw Lu Howe at 0.0182 Singapore cent apiece.
The mandatory unconditional cash offer was triggered following the acquisition of a 69.56 per cent stake in Blumont by Ultimate Horizon - a vehicle owned by Mr Siaw, who has businesses in hospitality, real estate and mining services primarily in Sarawak - on Thursday for S$4 million or 0.018172 Singapore cent per share.
In an announcement on the Singapore Exchange, the offeror said that the offer is final and will not be revised.
Trading in Blumont shares was halted on Thursday pending release of the announcement. The counter was last traded at 0.1 Singapore cent.
The offeror said that it plans to undertake a review of the group's business following the offer's close and to identify areas to enhance Blumont's strategic direction and operations.
As part of the review, the offeror may undertake an assessment of the group's human resource requireme…

Ipco board confirms going concern opinion

The board of Ipco International has affirmed its view that the company can remain a going concern and that all material disclosures have been provided to the market.
Those statements came on Tuesday after the market closed in response to queries by the Singapore Exchange.
The independent auditor of Ipco, a diversified holding company, in its latest audit report raised questions about Ipco's ability to continue as a business, citing the company's net current liability position and a lack of evidence to support expectations of future cash flows.
Ipco's board said in its announcement that its view that the going concern assumption was valid was based on optimism about three subsidiaries.
The first is Capri Investments, a fully owned property development outfit in the Seattle and Tacoma cities in the US state of Washington. That subsidiary expects to market 261 lots this year, and has negotiated to put them up for sale for US$13 million in total. Capri's management expect…

Risk in new mining stocks

Volatility in the share prices of mining companies at the exploration stages is common in Australia, where 40% of the listed stocks are mining companies that are still junior explorers.
According to experienced mining executive Barry Eldridge, this has been the case in many Australian- listed mining companies which was similar to the recent selldown in the share prices of three Singapore-listed companies.
“It is a sort of gamble on the prospects of huge reserves and feasible production.
“Chances are probably less than one in 10, but investors still buy in as the rewards are huge if the selected mining company is successful. The risk is certainly there,” he told StarBiz recently.
However, he said things would typically settle down after the euphoria was over with these mining companies as they moves along their development stage into production, whereby the companies could be valued based on their proven resources and reserves.
Eldridge is the chairman of the Diggers and Dealers, an i…

Criticism of regulators over Noble is misplaced

Frontline stockmarket regulator SGX (Singapore Exchange) and its supervisor MAS (Monetary Authority of Singapore) were criticised by research firm Iceberg Research last month for not acting over the past 30 months during which the shares of commodities firm Noble Group crashed by more than 90 per cent following publication of Iceberg's first attack on Noble's financials in early 2015.
The main point of contention is that Noble's alleged overly aggressive accounting should have been flagged earlier by SGX and MAS, with the implied suggestion that had this been done, the market's interests would have been better served
Could regulators have done more? Critics will say yes, but it certainly isn't clear that this is the case.
First, it has to be noted that SGX adopts an evidence-based regulatory approach, which means that it would intervene or take action only if the evidence warrants it.
As pointed out by Securities Investors Association of Singapore (SIAS) president…

Court rejects accused's bail bid, calls it 'fishing expedition'

The High Court has rejected a bid by the alleged mastermind of the 2013 penny stock crash to get documents and witness statements he claimed could support his bail application.
Justice See Kee Oon ruled that John Soh Chee Wen's request amounted to a "fishing expedition", and pointed to "a real risk that disclosure of witnesses' statements to the extent sought will prejudice a fair trial, as the applicant can find ways to tailor his evidence ahead of trial".
Soh believes that prosecutors unfairly picked out portions of recorded conversations and witness statements that were detrimental to him when they opposed his bail application in February.
He wanted the High Court to allow him access to all recordings of conversations between him and remisier Gabriel Gan, and all witness statements obtained from Mr Gan, trading representative Ken Tai and former LionGold executive Peter Chen that contradict the allegations made by prosecutors.
Soh was refused bailafter h…

Rowsley's third revival act in a decade should prompt caution

Who doesn't love a company that's on the cusp of getting another shot at reinvigorating itself, huh? Such fascination, albeit premature at this point, led traders to lap up Singapore-listed Rowsley's stock last week after the company unveiled a ground-shifting all-share S$1.9 billion deal to revive its fortunes and move into the largely lucrative healthcare space.
But lest one forgets, this follows five years after the firm, controlled by billionaire Peter Lim, took its chance on a S$580 million transformational plan to inject a huge plot of waterfront land in Malaysia's then-booming Iskandar and one of Singapore's oldest architect firms RSP into the company.
Then, the reverse takeover deal aimed at turning the firm into a real estate bigwig had also galvanised the stock but alas till today, it has yet to live up to its lofty expectations.
This wasn't its first makeover bid that had set off a buying frenzy of its shares. Back in 2007, Rowsley, then somewhat du…

A descent into the SGX abyss

You have wandered far from the gleaming towers of Singtel and DBS and the verdant hills of Bukit Sembawang. Nay, these places are not for your kind. The minimum lot size is too big and the share price is too high.
Staring glumly at a NetLink Trust manhole, studiously ignoring the Rowsley touts, you wonder: Is there anything more edgy?
And that's how you found yourself deep down by the dark waters of the Singapore Exchange (SGX) sewers.
The S-chip stench is the first smell that hits you, as you grope your way through a dim cavern oozing with corporate effluence. You gag slightly from the whiffs of corporate governance scandals past, missing cash, failing businesses, uncollectable receivables and disappearing executives in China's Fujian province.
Something almost makes you trip over. Brandishing your National Day Parade Funpack lightstick, you see a lump of coal with the word "Noble" etched on it. It looks like a cheap - albeit dirty - paperweight, maybe a potent wea…

SGX, MAS draw further fire over Noble saga

Market observers agree with Iceberg Research that regulators did not do enough to protect investors
Singapore stock market regulators are coming under pressure, with market observers on Friday joining Iceberg Research in saying that more could have been done to protect investors in the long-drawn Noble Group saga.
Their comments come as the Monetary Authority of Singapore (MAS) responded on Friday morning to Iceberg's criticism, saying that it will follow up with listed companies to investigate any allegations of irregularities.
Corporate governance advocate Mak Yuen Teen, an associate professor at the National University of Singapore, said Iceberg's criticism is not without merit.
He told The Business Times: "While I can understand the regulators being hesitant to do anything, especially when there is no clear wrongdoing - and bearing in mind that Noble has been receiving clean audit opinions - there is a sense among investors that the regulators are too passive and rea…

Soh saw weak case against him but believed he would be charged nonetheless, court told

He wants prosecution to furnish all information, documents he deems relevant to bail application
The man accused of masterminding the 2013 penny stock crash told a remisier before he was arrested in November 2016 that he did not think investigators had a strong case against him, but he believed they would still find a way to charge him and seek a prison sentence, it was revealed in arguments before the High Court on Wednesday.
Lawyers for John Soh Chee Wen want the court to compel prosecutors to provide documents, including all recordings of conversations between Soh and that remisier, that they say are relevant to their client's bail application.
The prosecution, however, argued that the application is tantamount to fishing for evidence.
Justice See Kee Oon said that he wanted time to consider the arguments made on Wednesday before giving his ruling, and has adjourned the case to Aug 8.
Soh is seeking all audio recordings of conversations between him and remisier Gabriel Gan; an…