MAS, CAD raids leave market guessing

Singapore

TRADING floors came alive with speculation on Friday about which stocks were involved in an investigation that led to police raids of broking firms on Wednesday, but the absence of any firm information kept traders from pulling any triggers.

"There's a lot of speculation, people trying to guess which stock it is," said one trader. "But nothing confirmed."

The Monetary Authority of Singapore (MAS) and the Commercial Affairs Department (CAD) of the Singapore police raided several broking firms on Wednesday as part of investigations into potential breaches of the Securities and Futures Act, the law that governs the capital markets. A number of remisiers were taken for questioning, and documents and items were seized as well.

Market sources said that investigators went to DBS Vickers, Maybank Kim Eng, OCBC Securities and Phillip Securities at roughly the same time on Wednesday.

The Business Times understands that among those taken for questioning were one remisier each from OCBC Securities and DBS Vickers. Representatives from DBS Vickers, Maybank Kim Eng and OCBC Securities said the firms themselves were not under investigation.

Investigators have kept mum about the specific circumstances that led to the probe, leading to speculation about which counter or counters may have been involved.

A number of stocks were mentioned by traders over the day, but the stock prices of those counters did not move meaningfully on Friday. To avoid undue speculation, BT will not be publishing the names of those stocks.

The investigations are likely to involve market manipulation or insider trading allegations. In the six months ended March, the Singapore Exchange (SGX) referred nine cases of market manipulation and three cases of insider trading to MAS.

SGX has also issued two trade-with-caution warnings this year, for Koyo International in January and for Zhongmin Baihui Retail Group in February; in each case, the exchange noted small groups of individuals accounting for the bulk of trades in those counters.

In February, Koyo announced that MAS and CAD were investigating managing director Foo Chek Heng.