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Issuer of daily leveraged certs used what some say is an aggressive formula to calculate the price of SIA shares ex-rights TRADERS in the 5x Short Singapore Airlines (SIA) daily leverage certificates (DLCs) saw their positions go to zero on Wednesday when SIA shares rose more than 20 per cent upon trading ex-rights. The short squeeze was exacerbated after Societe Generale (SocGen), the issuer of the certificates, used what some traders said is an aggressive formula to calculate the price of SIA shares ex-rights. SocGen also gave them very little time to hedge their bets in reaction, the traders said. The full damage is not known but in the week ended May 1, over 1.8 million short DLCs worth S$1.4 million were in the hands of investors. DLCs are instruments that move either up or down based on the price of an underlying asset. A 5x Short DLC will move inversely to the underlying asset price by a factor of five, so a 20 per cent increase in SIA's share price would p...

CIMB Singapore has raised the ire of customers with its move to raise the floor of certain mortgages pegged to the one-month Singapore interbank offered rate (Sibor) - with that floor rate now higher than the prevailing market rate. From May 18, customers on CIMB's floating-rate mortgages linked to the Sibor or Swap Offer Rate (Sor) must stomach being charged a minimum of 0.9 per cent, compared to the previous floor rate of 0.1 per cent, a notification letter seen by The Business Times showed. Disgruntled customers told BT that they consider the move "highly unethical" and intend to challenge the bank on the decision. CIMB is believed to be the first bank to increase its floor rate for such floating-rate mortgages amid the Covid-19 pandemic, with most banks keeping the floor rate of about zero. Floor rates are understood to protect lenders from losses, and introduced as a clause in loan contracts in the case of a collapse in rates. For example, in 2011, the Sor ...

PRESSED for time as it grapples with a debt pile of US$4 billion, Singapore's giant oil trader Hin Leong Trading (HLT) has pulled out its application to the court for a debt moratorium and decided instead to go down the judicial management path, according to sources. The Business Times understands that PricewaterhouseCoopers (PwC) LLP, the accounting firm that was hired by the trader to help fix its dire financials and "protect and preserve its assets and cash", will be appointed as interim judicial manager. The move has surprised some market watchers. "It puzzles me. There are very good reasons to stick to section 211B (of the Companies Act that involves a moratorium order)," said Robson Lee, a Singapore-based partner at Gibson, Dunn & Crutcher. "JM (judicial management) is a blunt instrument that works in limited situations. The hard truth is that JM is value destructive since management - with its know-how, connections and technical exp...

SINGAPORE (BLOOMBERG) - The letters started to arrive in early April. One after the other, the titans of global finance, from JPMorgan Chase & Co to HSBC Holdings, demanded the immediate and urgent repayment of hundreds of millions of dollars in loans. On the receiving end was Hin Leong, one of the most powerful and secretive names in oil trading. Founded in 1963 by a Chinese immigrant known to everyone in the industry as O.K. Lim, it was a giant in the world of shipping fuel from its base in Singapore. Over the decades it had become one of the most fabled trading houses, the source of a billion-dollar fortune, and the subject of stories about legendary deals that made rivals sweat. But earlier this month, as oil prices collapsed in the fallout from the coronavirus, its foundations crumbled. Banks had already been pulling credit lines, spooked by defaults at other trading houses. Smelling something wrong at Hin Leong, they started to ask for their money. When it faile...

Four men are facing charges of illegal trading that involved cheating two banks into disbursing more than $2.2 million to buy shares. Goh Hanshi Justin, who allegedly masterminded the scheme that manipulated the price of Sky One Holdings shares, was charged on Thursday (March 26) alongside three others. Goh was a retail investor, while the three men - who were not named - were trading representatives at Lim & Tan Securities and RHB Securities Singapore, formerly known as DMG & Partners Securities. Goh, 34, allegedly controlled the trades in Skyone shares through 27 different trading accounts that belonged to third parties from Sept 18 to Oct 28, 2013. The three trading representatives obtained 15 of the accounts for him. Police said that in order to secure a higher trade limit in Skyone shares, Goh nominated three other people to receive Skyone shares and used the stock as collateral with The Bank of East Asia and Maybank under their share-financing facili...

ON Jan 9, Magnus Energy, a company whose shares have been suspended from trading since Aug 23, 2019, got an opportunity for a reboot after minority shareholders voted in a new board. For many Magnus shareholders, this could not have been a better outcome. There have been cases where companies became insolvent and shareholders were trapped in limbo. Had it not been for Charles Madhavan, who had a brief but critical two-month stint as the company's managing director before he was terminated, no one would have been privy to the extent of the shenanigans that contributed to many people losing their investments. In its heyday, Magnus was trading close to S$4 a share in early 2013. That was before the massive fund-raising activities the company undertook from FY2015 to FY2018. In total, Magnus raised gross proceeds of S$31.3 million, and had used close to S$20 million. As a result of a notes issue exercise and share placement, the company issued a significant number of new ...

It's looking into possible breaches of the Catalist rules after Magnus' sale of interest in firm THE Singapore Exchange's regulatory arm (SGX RegCo) on Friday notified Catalist-listed Magnus Energy Group to put on hold all corporate transactions until its board is fully reconstituted, and said it would investigate a disposal by the firm for possible breaches of the Catalist rules. Magnus Energy is set to convene an extraordinary general meeting (EGM) on Jan 9 as two teams seek shareholders' support for boardroom control of the troubled oil and gas firm. In a Dec 31 update, the firm said that "all planned actions are expected to be taken only after the EGM". But it was brought to the attention of SGX RegCo that the company had sold its 50 per cent indirect interest in Mid-continent Environmental Protection to the latter's existing director, Chong Yen Yee, for RM1 (33 Singapore cents). As the disposal involved negative relative figures unde...