(Adds detail on lifting of trading curbs, quotes from Blumont)
By Rachel Armstrong and Eveline Danubrata
SINGAPORE Oct 18 Singapore Exchange Ltd (SGX)
is to lift trading curbs on three inter-linked
companies whose S$8.7 billion ($7 billion)slump in combined
market value in just two days earlier this month had sparked
criticism of the SGX's market controls.
SGX said on Friday it was lifting curbs on Blumont Group Ltd
, Asiasons Capital Ltd and LionGold Corp Ltd
, restoring their full access to the equity market.
Trading in the three had been suspended on Oct 4. after
their shares suffered dramatic reversals from massive increases
built up earlier this year. SGX subsequently declared them
"designated securities", meaning traders could not short-sell
them and had to pay for any purchases with cash upfront.
These trading curbs, the first to be imposed on any
Singapore-listed stocks for five years, will be lifted on
Monday, though SGX said on Friday it would continue to monitor
trading of all three.
The slump in the three stocks had turned them back into the
penny stocks they were before their dramatic gains earlier this
year. Analysts had said the gains were not been backed by
obvious business fundamentals and there was criticism in local
media that the SGX had stepped in too late to tame the
SGX said it was lifting the curbs having monitored trading
patterns, volumes and intra-day price moves over the past two
weeks. "Trading in these stocks has since become more stable,"
said head of market surveillance Kelvin Koh.
But the exchange did not say if there was any formal
investigation into what had led to the wild price swings in the
three, which share some common links - Asiasons is the largest
shareholder in LionGold, while LionGold and Blumont have an
independent director in common.
Blumont, which had seen the largest rise of the three stocks
before losing around S$6 billion in market value, said late on
Thursday it was to receive $200 million in funding from U.S.
investment firm Platinum Partners, though the money was
contingent on the trading curbs being lifted.
The company also said on Wednesday it had raised around
S$43.05 million from a rights issue of new stock.
"We can now focus all our energies on accelerating the
growth of our mineral and energy resources business with the
funding that has been provided by Platinum," said incoming
chairman Alexander Molyneux after SGX's announcement. Molyneux
bought a 5.2 percent stake in Blumont on Oct. 7.
"The core of our strategy right now is copper, coking coal
and uranium. They are among our preferred commodities and they
are also commodities where we already have something going on,"
Molyneux told Reuters in an interview earlier on Friday.
Platinum Partners will subscribe to convertible bonds issued
by the company and Blumont will in turn use part of the proceeds
to buy $100 million of convertible bonds in Australia-listed
Discovery Metals Ltd.
Shares in Discovery jumped as much as 15 percent on Friday,
but pared some of the gains to close 5.3 percent higher.
However Asiasons and LionGold have both had to delay
Platinum Partners' PPLO fund had been due to subscribe to
part of a S$202 million share placement in LionGold, but that
deal was called off late last week.
Platinum Partners' Value Arbitrage fund was also due to
receive stock in Asiasons as part of a share placement used to
fund Asiasons' purchase of a stake in oil explorer Black Elk
Energy Offshore Operations LLC. That deal is in limbo after SGX
queried whether Asiasons had a strong enough mandate to make
that share issue.
In Singapore, Blumont shares rose 17 percent on Friday,
Asiasons gained 18.5 percent and LionGold advanced 6 percent.
But their stock prices were still down from the record levels
reached earlier this year.
($1 = 1.0382 Australian dollars)
($1 = 1.2405 Singapore dollars)
(Additional reporting by Anshuman Daga; Editing by Ryan Woo and