Singapore Exchange Ltd., Southeast Asia’s biggest bourse, will end restrictions imposed on Blumont Group Ltd., Asiasons Capital Ltd. and LionGold Corp. after trading in the stocks stabilized.
The exchange said Oct. 6 that shares of the three companies had been declared designated securities, prohibiting investors from selling them unless they hold the same quantity of stock. Those restrictions will be lifted from 8:30 a.m. Singapore time on Oct. 21, SGX said in a statement yesterday.
“We’re lifting the designation status as trading has become more stable,” Kelvin Koh, head of market surveillance at SGX, said at a media briefing yesterday.
Regulators around the world have stepped up oversight of capital markets after the global financial crisis in 2008 and evaluated safeguards since the May 2010 plunge known as the flash crash briefly erased about $862 billion from the value of U.S. equities. SGX plans to add circuit breakers by early next year after the fall in shares of the three commodity companies erased $6.9 billion in market value over three days.
“These three stocks have garnered a lot of attention,” Kelly Teoh, Singapore-based strategist at IG Asia Pte, said yesterday. “The stocks, coming from a low base, should rally after this restriction is lifted.”
Asiasons tumbled 96 percent over the three trading days through Oct. 8, while LionGold plunged 87 percent over the three-day period. Blumont, which invests in minerals and energy, slumped 94 percent over two trading days on Oct. 4 and Oct. 7.
Blumont’s designated chairman Alexander Molyneux said in an e-mailed comment yesterday that the company can now focus on growing its minerals and energy unit with the end of the trading restrictions.
“The designation of the stocks and its ending are done in the interest of the investing public and the market,” the exchange said yesterday. “SGX will continue to monitor closely the trading activities in the marketplace.”