[SINGAPORE] Share prices of Asiasons Capital, Blumont Group and LionGold Corp almost doubled in yesterday's no-holds-barred trading as the market sought to put a value on the stocks after trading curbs were ended.
Traders The Business Times spoke to said the share prices of the three counters can now be "freely" determined by market forces after the Singapore Exchange (SGX) lifted trading restrictions on the stocks.
Asiasons shares surged 91 per cent, Blumont stock rose 80 per cent and LionGold soared 93 per cent by the close of trading yesterday. They were among the top 10 actively traded stocks in early trade, with higher volumes than their 30-day full-day average. Asiasons, Blumont and LionGold shares finished at 24.5 cents, 24 cents and 29.5 cents respectively.
"The lifting of the trading curbs levels the playing field for these three counters. Investors put off by the trading restrictions previously can now buy into these counters just as they can buy into other counters," said Liu Jinshu, an analyst at Voyage Research.
SGX yesterday allowed the counters to be traded freely without the trading shackles that had banned investors from contra trading and short-selling them since Oct 6.
Traders said the "pent-up" demand for Asiasons, Blumont and LionGold shares will continue to move their prices to an equilibrium level determined by a free market.
"I feel (the increase) can be further sustained because the stocks have taken such a huge bashing. Now the market is trying to do a price discovery on them," said a broker who requested anonymity.
Asiasons, Blumont and LionGold experienced strong run-ups in their stock prices this year, trading at around $2 before they were struck by a downward spiral on Oct 4, prompting SGX to suspend trading in the three counters.
The suspension was lifted the next trading day on Monday but SGX labelled them as designated stocks, in a move aimed at reining in excessive speculation and possible disorderly trading. The stocks traded between 10 and 15 cents.
"The $2 they were trading before the designation was unrealistic; the 10 to 15 cent range was also unrealistic because it was due to unusual measures," the broker said.
He believes Asiasons' "true" value could settle in the region of 30 to 40 cents, while LionGold's could lie between 40 and 50 cents as it has a higher book value.