Singapore Exchange, south-east Asia’s biggest, plans to add circuit-breakers by early next year after a plunge in shares of three commodity companies erased $US6.9 billion ($7.3 billion) in market value over three days

October 14, 2013 Leave a comment

Hard-hit Singapore Exchange to implement ‘safeguards’

October 14, 2013

Singapore Exchange, south-east Asia’s biggest, plans to add circuit-breakers by early next year after a plunge in shares of three commodity companies erased $US6.9 billion ($7.3 billion) in market value over three days. Under the proposal, trading of a stock will be halted for five minutes if it moves 10 per cent in either direction, the exchange said. It had sought public feedback on the plan in June.”We aim to introduce the dynamic circuit-breakers by early next year, subject to regulatory approvals,” spokeswoman Joan Lew said.

The exchange imposed restrictions last week on the shares of Blumont Group, Asiasons Capital and LionGold after they plunged.

Trading caps to prevent wild swings in the stocks will give investors time to assess their holdings, according to trading network Liquidnet Holdings and the Securities Investors Association of Singapore, the largest investor lobbying group in Asia.

Circuit-breakers are ”safeguards other markets have to allow time for investors to mull over the situation at hand to see if the information out there is sufficient to make an informed decision,” SIAS president David Gerald said. ”Investors will have an opportunity to quickly review their investment decision.”

Regulators worldwide have evaluated safeguards since a May 2010 plunge briefly erased about $US862 billion from the value of US equities. They have stepped up oversight of capital markets overall following the global financial crisis in 2008.

Bloomberg

Filed under Macro Trends

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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