The hoo-hah yesterday in Malaysia and Singapore markets was the sell down in Genting Singapore, Genting Berhad and Resorts World. The whole thing rested on the news that the Lim family disposed their private stake in Genting International. Seriously, the majority of investors in Malaysia were trading blind for most of the morning session because they did not get any news or hints. Same can be said for Singapore save for a substantial drop early in the session in Genting Singapore prompted swift action by SGX to the company querying the drop. The message was posted at 9.38am yesterday. The company answered at 1.21pm after the close of the first session yesterday that they received notification of the sale from the sellers at 12.32pm yesterday.
There are a few uncomfortable issues in that rumours of the deal and the details were floating way before the markets opened yesterday. FinanceAsia had a scoop and the article was available early yesterday. Yes, the article was based on sources close to the deal, which is hard to patrol by the exchanges or the company. The interesting thing was that FinanceAsia was able to say that the deal was launched from 8.30pm the previous day (26 May). Safe to say that the buyers were enticed by the big discount. It is also safe to assume that those who bought will also know that they are likely to get their bids fulfilled, and would sell first thing the next day to lock in the spread (profit). The sad thing is that most of the buyers are not privy to the information and may think they are getting in cheap.
The deal should have been closed before the markets opened. The market should have equal access to information for a fair trading market with integrity. When one side of the buyer-seller have an unfair advantage, that's not right.
You cannot stop the media from trying to get the scoop, that will always happen. What the exchanges and companies must do is to eliminate these situations from resulting in an unfair situation. At fault here are the investment advisors, they should advise the sellers on the timeline and progressive steps to do the deal so as to eliminate the "gaps" between striking the deal, placing the deal, and announcing the deal to the company. J.P. Morgan and UBS acted as joint bookrunners and underwriters for the deal.
SGX should reprimand the advisors severely, even a fine is in order considering the amount of "losses" suffered by the innocent buyers.
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FinanceAsia: The 853.88 million shares were offered in a range between S$0.72 and S$0.76 and late last night the indication was that the price would be fixed at the bottom for a total deal size of S$614.8 million ($425 million). However, the deal wasn't launched until 8.30pm Hong Kong time yesterday and, at the request of a number of Asian investors, sources said the bookrunners had agreed to open the books for a short while before the start of trading this morning to give those who were unable to make an investment decision last night a second chance.
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27-May-2009 09:38:45
Mr. Terence Tay Wei Heng
General Counsel
Head, Corporate Affairs
Resorts World at Sentosa
39 Artillery Avenue, Sentosa
Singapore 09998
Dear Sir,
QUERY REGARDING TRADING ACTIVITY
We have noted, and draw to your attention, a substantial decrease in the price of your shares today. To ensure a fair and orderly market, please answer each of the following:
Question 1: Are you aware of any information not previously announced concerning you (the issuer), your subsidiaries or associated companies which, if known, might explain the trading?
- If yes, the information must be announced immediately.
Question 2: Are you aware of any other possible explanation for the trading?
Question 3: Can you confirm your compliance with the listing rules and, in particular, listing rule 703?
Please respond immediately via SGXNET. Where appropriate, you may want to request a trading halt or a suspension of trading. Please contact Market Control (or, if you need to discuss the matter, your Account Manager in Issuer Regulation) immediately. Thank you for your cooperation.
We have released this letter via SGXNET.
Yours faithfully
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27-May-2009 13:21:33
Glenn Seah
Vice President
Head, Market Surveillance
Risk Management & Regulation
Notes:
1. Subject to limited exceptions in rule 703, an issuer must announce any information known to the issuer concerning it or any of its subsidiaries or associated companies which is necessary to avoid the establishment of a false market in the issuer’s securities, or would be likely to materially affect the price or value of its securities must be publicly disclosed (rule 703).
2. An issuer must undertake a review to determine the causes of any unusual trading activity (paragraph 20 of Appendix 7.1).
3. An announcement should, among other things, state whether the issuer or any of its directors are aware of the reasons for the unusual trading activity and whether there is any material information which has not been publicly disclosed (paragraph 31 of Appendix 7.1).
4. Your responsibility under listing rules is not confined to, or necessarily satisfied by, answering the questions in this letter.
We refer to the queries from the Singapore Exchange Securities Trading Limited (the “SGX-ST”) regarding the substantial trading activity of the shares of Genting Singapore PLC (the “Company”) today.
SGX Question 1:
Are you aware of any information not previously announced concerning you (the issuer), your subsidiaries or associated companies which, if known, might explain the trading?
Reply:
The Company is not aware of any information not previously announced concerning the Company, its subsidiaries or associated companies, which if known, may explain the trading.
However, we wish to inform that the Company has just received confirmation from the following substantial shareholders at 12.32 p.m. today that:-
(i) Kien Huat Realty Sdn Berhad has disposed of 265,809,000 shares in the Company by Lakewood Sdn Bhd via a placing agreement;
(ii) Parkview Management Sdn Berhad as trustee of a discretionary trust, has disposed of 265,809,000 shares in the Company by Lakewood Sdn Bhd via a placing agreement; and
(iii) G Z Trust Corporation as trustee of a discretionary trust, has disposed of 649,073,320 shares in the Company by Golden Hope Unit Trust via a placing agreement.
The respective substantial shareholders will in due course be releasing the relevant Notice of Substantial Shareholder’s Change in Interests/Cessation of Interests (as the case may be).
SGX Question 2:
Are you aware of any other possible explanation for the trading?
Reply:
Saved as disclosed above, the Company is not aware of any other possible explanation for the trading.
SGX Question 3:
Can you confirm your compliance with the listing rules and, in particular, listing rule 703?
Reply:
The Company confirms that it is in compliance with the listing rules and, in particular, listing rule 703 of the Listing Manual of the SGX-ST.
For and on behalf of the Board
Genting Singapore PLC
Justin Tan Wah Joo
Managing Director
27 May 2009
p/s photo: Ayame Misaki
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