Singapore Exchange issues first trading cautions on penny stocks
SINGAPORE, March 12
SINGAPORE, March 12 (Reuters) - Singapore Exchange Ltd issued on Wednesday its first ever "trade with caution" warnings, flagging two listed firms which have seen their share prices surge over the past two days after a penny stock scandal hit turnover last year.
The bourse told investors that they should be careful when dealing in the shares of Ziwo Holdings Ltd and Giken Sakata Ltd.
Shares in Ziwo, which makes materials used in furniture upholstery, rose more than 130 percent over the course of Tuesday and Wednesday, from S$0.04 to as high as S$0.104. When queried by the exchange, the company said it had no explanation for the increase.
Giken Sakata, which makes components for the computers and electronic industry, saw its shares rise 61.7 percent between Monday and Tuesday. The company said a big shareholder, Miyoshi Precision Ltd, had sold its entire stake in the company on Tuesday when asked by the exchange to explain the stock movement.
SGX had said in February that it would start issuing "trade with caution" announcements as part of a slew of changes it was bringing in after the penny stock scandal hit trading volumes on Southeast Asia's largest bourse.
"The exchange will investigate all possible transgressions and will work with the relevant regulatory agencies to pursue actions to maintain a fair, orderly and transparent market," SGX said in the warnings.
Concerns about trading patterns of penny stocks on Singapore's stock market surfaced in October when shares in three companies - Blumont Group Ltd, LionGold Corp and Asiasons Ltd - crashed and wiped out about S$8 billion ($6.32 billion) in value in just two days after huge run-ups in their share prices. ($1 = 1.2667 Singapore Dollars) (Reporting by Rachel Armstrong; Editing by Miral Fahmy)
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