Koyo nosedives after SGX's trading caution
Singapore
SHARES of Catalist-listed engineering services provider Koyo International on Monday crashed S$0.284 or 84 per cent to S$0.056 in heavy trading volume of 27.5 million shares after the Singapore Exchange (SGX) on Friday warned the investing public to be careful when trading in Koyo's shares.
"The share price of Koyo remained steady to higher from 26 Oct 2015 to 14 Jan 2016 despite the decline in the broad market during this period," said SGX.
"SGX's review of the trades in Koyo showed that a small group of individuals was responsible for 60 per cent of the trading volume of Koyo shares during this period, of which at least half of these trades were due to this group of individuals buying and selling among themselves."
The exchange also drew attention to its query to Koyo last Wednesday when it asked the company if it could explain the unusual volume traded. On that day, 39 million Koyo shares changed hands compared to 3.2 million on Tuesday and 1.8 million on Monday.
Koyo replied that it had in recent weeks been engaged in discussions on potential projects but since no decisions had been reached, it could not conclusively attribute the volume to these talks. It also added that it was unaware of any other reasons for the high volume and that its reply to SGX was prepared with the approval of its board.
In its Friday announcement, SGX said that it was the first Trade with Caution (TWC) since the exchange enhanced its TWC warnings to make them more detailed and targeted.
SGX issued similar announcements last year to CEFC International and International Healthway Corporations (IHC). For CEFC, SGX noted that while the stock rose from S$0.034 from July 10, 2015 to S$0.365 on Aug 6, 2015, a small number of offshore accounts were responsible for 40 per cent of the buying volume.
For IHC, the exchange noted that the stock price had not budged from S$0.29-0.32 between April and September despite volatility in the general market, and that a handful of individuals who seemed to be connected to each other were responsible for over 60 per cent of the turnover.
