SGX's querying system - still a work-in-progress

WHEN it comes to querying companies over unusual share movements, the Singapore Exchange (SGX) is in a no-win position. If it approaches a company for reasons why its shares are in play and receives a reply in the negative, observers then question - and sometimes mock - the effectiveness of the querying process. But if it doesn't query companies after an odd share price and/or volume jump, observers always ask why not.

Few would therefore deny that regulatory work is thankless and that the SGX should be granted a fair amount of latitude when discharging its duties as it must by necessity be selective when deciding what needs to be checked. The problem, however, is that it is sometimes its own worst enemy with its seemingly inconsistent approach towards what should be the subject of a public query and what should not. Two recent incidents illustrate this.

Before highlighting the first one, recall that in 2014 when Olam International's shares rose 34.8 per cent in six weeks prior to a Temasek takeover offer, SGX responded to questions from the public as to why Olam had not been queried by saying there had been positive analyst reports to account for the rise. It said on March 16, 2014: "In determining whether price or volume movements are unusual, SGX will take into account a multitude of factors. These include macroeconomic factors, market sentiment, specific industry outlook and trends, company financials and company developments and analyst reports."