Mirach Energy to remain on SGX watchlist

MIRACH Energy will not be able to exit the Singapore Exchange's (SGX) watchlist under the minimum trading price (MTP) criteria, on the back of two Trade with Caution (TWC) alerts as well as unusual activities in the shares of the company that resulted in what appears to be artificial valuations.

To meet the MTP exit criteria, the company must record a volume-weighted average price (VWAP) of at least S$0.20 and an average daily market capitalisation of S$40 million or more over the last six months. The company has been on the watchlist since June 5, 2017.

As at Dec 2, Mirach Energy did meet the criteria theoretically. Its average market capitalisation was S$46.3 million and its average VWAP was S$0.212.

However, SGX RegCo issued two TWC alerts to the company on Sept 24 and Nov 5 this year.

While the company's share price climbed, SGX RegCo's review of the trades between Feb 8, 2019 and Sept 3, 2019 found that a small group of individuals was responsible for over 69 per cent of the buy volume. These individuals appear to be connected to each other.

SGX RegCo also noted that a single omnibus trading account accounted for 88.7 per cent of the buy volume between Oct 7, 2019 and Nov 5, 2019, with four individual trading accounts behind the omnibus trading account.

As such, SGX RegCo did not consider the company as having met the requirements for removal from the MTP watchlist. It will ignore any artificial distortions to share prices which are not representative of true market demand, added SGX RegCo.