* Blumont, Asiasons, LionGold shares extend slide on Monday
* Sentiment for small-cap stocks hit by the trading halts
* Market puzzled by temporary nature of SGX share suspension
(Adds comment by Australian shareholders body, details on share
By Rachel Armstrong and Eveline Danubrata
SINGAPORE, Oct 7 Three Singapore-listed
companies resumed their steep decline on Monday as trading halts
were lifted - suspensions which have raised more questions than
answers about the stocks as well as how the country's exchange
regulates sudden price moves.
Blumont Group Ltd, Asiasons Capital Ltd
and LionGold Corp Ltd have shed up to S$8.7 billion
($7 billion) in combined market value since Thursday's close,
transforming the companies back into the penny stocks that they
once were before the strong run-up in their shares this year.
Trade in the firms - which have interests in resources as
well as links to each other - were suspended by the Singapore
Exchange Ltd (SGX) on Friday in a rare move for the
bourse and market regulator. Investors may not be fully informed
of the companies' affairs, SGX said then.
Some market players said the bourse appears to be cracking
down on speculative trading and welcomed the move. Others
questioned its handling of the matter.
"The trading suspension was quite drastic and it created
panic last week. It was a sentiment killer. It not only affected
the three stocks, but also a slew of small and mid caps," said
Roger Tan, chief executive of Voyage Research in Singapore.
"The suspension should have stayed for a longer time so the
companies can make clarifications on a more fundamental level.
Since you already suspended it, why not wait a while more?"
Both Blumont and Asiasons said the decline in their shares
and the trading suspensions on Friday seem to have been
precipitated by misunderstandings.
In an exchange filing on Friday, Asiasons said it had been
informed that there were "malicious market rumours that a team
from the Monetary Authority of Singapore has been sent to the
company's office to carry out investigations. The company
confirms that such market rumours are false."
The head of Blumont's copper unit said in an email to
Reuters that the plunge in the company's shares appeared to have
been caused by short-selling, and that the slump had nothing to
do with the fundamental value of the Blumont Group portfolio.
Blumont, a diversified holding company, has lost S$6.2
billion in market value since hitting a record high a week ago.
LionGold, in response to SGX queries about trading in its
share price, said on Monday that it was in talks with Minera IRL
on a possible offer for the Latin American gold miner.
It did not explain how the discussions might have caused the
drop in its shares.
SGX performs a dual role as the operator of the city-state's
stock market and its regulator, which has in the past raised
questions about whether it has a conflict of interest since it
involves regulating listed companies that are also its clients.
Traders say SGX's reputation took a hit after several
Chinese companies listed on its market, known as S-chips, were
embroiled in accounting scandals in 2008 and 2011.
Since then SGX has taken steps to improve corporate
governance, including toughening its listing rules last year to
attract larger firms on to its exchange.
On Sunday, SGX declared the stocks of Blumont, LionGold and
Asiasons to be "designated securities," meaning investors cannot
short-sell them and purchases must be paid for upfront with
cash. It was the first time in five years that it has declared
any stocks as designated securities.
The exchange said it imposes such conditions when it
believes there may have been market manipulation of the
security, excessive speculation or if it is otherwise in the
market's interest to do so.
Still, the share price plunges and suspensions last week
have raised concerns some shareholders may be unfairly burned.
"It doesn't seem as though retail shareholders are getting
the consideration that we think they deserve," said Ian Curry,
chairman of the Australian Shareholders' Association.
LionGold and Blumont have Australian assets, and there are
Australian shareholders who are exposed to LionGold, according
to Australian media.
SGX had proposed in June to introduce circuit breakers for
the securities market by the end of this year.
Shares in Blumont tumbled as much as 87 percent in Singapore
on Monday, while investment firm Asiasons dropped 92 percent and
LionGold fell 71 percent.
Blumont's share price plunge and suspension caused it to
call off a proposed S$146 million ($117 million) takeover of
Australian-listed coal explorer Cokal. Blumont's copper
unit said, however, there was no change to its plan to invest
$108 million in Botswana copper miner Discovery Metals.
Other shares that suffered in the wake of the suspensions
included Innopac Holdings Ltd, which lost as much as
42 percent in early Monday trade. ISR Capital dropped
as much as 47 percent. Both were queried by SGX on Friday about
recent trading in their shares.
Innopac is an investment firm that started out as a Kentucky
Fried Chicken franchisee in Singapore before it divested that
interest, while ISR invests in natural resources. Officials for
both firms were not immediately available to comment.
Several of the SGX-listed companies experiencing dramatic
price falls over the past two trading days are linked to each
other. Asiasons is LionGold's biggest shareholder with an 8.7
percent stake as of Aug. 30, according to Thomson Reuters data.
Asiasons is also the biggest shareholder in ISR, while
LionGold has a stake in Innopac. Blumont and LionGold have a
non-executive independent director in common.
($1 = 1.2458 Singapore dollars)
(Additional reporting by Anshuman Daga and Rujun Shen in
SINGAPORE and Sonali Paul in MELBOURNE; Writing by Edwina Gibbs;
Editing by Ryan Woo)