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NUS study removes claim that real estate execs engage in insider trading

RESEARCHERS from the National University of Singapore (NUS) Business School have removed a claim from a research paper stating it had found evidence of insider trading in the land market.

The paper still states that sale prices of new residential units are lower when senior executives of real estate development firms golf together, but the "insider trading" claim has been removed.

The study results imply that informal interactions during such golf sessions between real estate executives enable developers to realise higher profits while the Singapore government loses land sale revenue.

The researchers wrote that the study also "shows evidence" of corporate top executives using social interactions to acquire new information in response to market events, such as government land sales programme announcements.

In a statement on Thursday, NUS Business School professor and lead researcher Sumit Agarwal said "research is dynamic in nature" and that scientists go through many iterations of the paper in the research process.

"With this study, we thought we could establish insider trading. This turned out not to be the case, and hence the content on insider trading was removed in subsequent versions," Prof Agarwal said. 

The online version of the study has also been updated as at Jan 19.

The "insider trading" claim from the initial version of the study drew the ire of the Real Estate Developers' Association of Singapore (Redas), which rejected the findings in a response dated Jan 17, two days after findings from the NUS study were announced.

Redas said it "categorically rejects" any suggestion that the industry engages in any form of pricing fixing, insider trading or collusion.

Redas did not comment on the changes made to the study at the time of writing.