Singapore Exchange Ltd. (SGX), Southeast Asia’s biggest bourse operator, suspended the trading of Blumont (BLUM) Group Ltd., LionGold Corp. and Asiasons Capital Ltd. (ACAP) after shares of the commodity investors plunged.
Blumont, which invests in minerals and energy, tumbled 56 percent to 88 Singapore cents before trading was halted. It was the second-biggest decliner on the FTSE ST All-Share Index. (FSTAS) The company said the share losses prompted the termination of a deal to buy Australian coal producer Cokal Ltd.
The plunge in the share price “materially and adversely affected the commercial terms discussed with Cokal,” Blumont said in a statement to the Singapore bourse.
Asiasons, which last month bought a stake in U.S.-based oil and gas producer Black Elk Energy Offshore Operations LLC, plunged 61 percent to S$1.04 to lead declines on the gauge. There are “malicious market rumors” that the Monetary Authority of Singapore sent a team to investigate the company, Asiasons said in response to an SGX query.
LionGold (LIGO), which said last month it was in talks to buy as many as three gold mining assets, slumped 42 percent to 87.5 Singapore cents. The company is in advanced stage of negotiations to buy a stake in one of the targets, which is listed in three foreign stock exchanges, LionGold said in a statement today.
Trading was suspended by the bourse to “safeguard the interests of the markets as there could be circumstances that would result in the market not being fully informed,” according to a statement from the bourse.
While existing regulations in Singapore are sufficient for company disclosures, regulators may need to introduce circuit breakers to automatically suspend trading of shares that have moved sharply higher or lower, said David Gerald, president of Securities Investors Association of Singapore.
“A circuit breaker mechanism will certainly help to give early warning to investors,” Gerald said in an e-mailed reply to Bloomberg.
Regulators around the world have stepped up oversight of capital markets after the global financial crisis in 2008. The MAS established a 13-member council in 2010 with a goal to boost corporate governance standards and investor confidence.
“The concern is that short sellers are taking advantage of the weak market sentiment,” Kelly Teoh, a strategist at IG Markets in Singapore, said by telephone. “It is a good thing that SGX shows it’s on top of everything. It is in the market interest to have some sort of a policing environment.”
Blumont had soared more than 1,112 percent this year through the end of September to lead gains in Singapore, prompting the SGX to investigate the surge. In reply the company said this week it has held talks with 20 potential takeover targets or joint-venture partners since December.
The company sees an “unprecedented opportunity resulting from the recent severe impairment of asset prices in the mineral resources sector,” Blumont said in an Oct. 2 statement.
Raw-material producers and energy companies are the worst-performing stocks on the MSCI Asia Pacific Index this year. Gold miner Newcrest Mining Ltd. (NCM), which took a A$6 billion ($5.7 billion) on its assets in June, tumbled 50 percent so far this year, the most among miners. Whitehaven Coal Ltd. sank 46 percent, leading losses among energy producers, as the fuel headed for a third year of decline.
LionGold jumped 46 percent in August, touching a record intraday high of S$1.755 on Aug. 27. Asiasons rose to S$2.83 on Oct. 1 for its highest-ever close.
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