A curious thing happened recently on SGX, the Singapore exchange. In a matter of hours, about S$8bn ($6.4bn) was wiped off the combined market value of three little-known stocks. Shares in Blumont Group, Asiasons Capital and LionGold Corp slumped after mysterious trading activity that has been blamed on everything from aggressive short selling to outright market manipulation or insider trading.
The Monetary Authority of Singapore has pounced and is investigating. The city-state’s shareholder association has called on listed companies to tighten up on public disclosures. The watchdog has said the episode had also “surfaced broader issues regarding the [exchange’s] market structure and practices” that could lead to reforms.
Not long afterwards, SGX revealed that it was taking the first baby steps towards embracing electronic market makers – sometimes referred to as “high-frequency traders” – for its equities market.