SGX alleges dominance of connected individuals in recent buying of Zhongmin Baihui shares

THE Singapore Exchange (SGX) is reviewing trading in Zhongmin Baihui Retail Group after finding that a small group of individuals accounted for almost all the buy volume in the stock since October 2015, the market operator said on Friday after the market closed.

SGX "urges investors and potential investors to exercise caution" when dealing in the stock.

Zhongmin Baihui's shares have stayed relatively stable since Oct 26, 2015 despite declines in the broader market, SGX said. Since the start of 2016 in particular, Zhongmin Baihui's shares have rarely closed lower than S$1.76, or 1.12 per cent off their last traded price on Dec 31, and only on Feb 4 did the stock close at S$1.74, down 2.25 per cent on the year. By contrast, the Straits Times Index has lost 11.25 per cent year-to-date.

SGX said that a "small group of individuals" were responsible for more than 90 per cent of the on-market buy volume of Zhongmin Baihui's shares in the year-to-Feb 4 period, and that this group of individuals appear to be connected to each other.

The exchange said it is reviewing the trades in the shares and will take the necessary actions.