SGX Issues First Short-sale List
by Donavan Lim
The Singapore Exchange (SGX) has issued its first short-sale list Tuesday after it earlier required investors to mark or indicate whether the order placed on the securities market is a short sell order or a normal sell order.
The list for Monday’s transaction showed WE Holdings, YHM Group, Ipco International, Golden Agri-Resources, and Thai Beverage being the most heavily short-sold shares.
Topping the list was Golden Agri, which recorded the highest short sale value of S$28.6 million, followed by Thai Beverage at S$17.1 million and WE holdings at S$7.6 million.
The total value of short sell orders matched and executed for March 11 totalled S$214.4 million.
Short selling refers to the sale of securities that the seller does not own at the time of the sale and may either be “covered” or “uncovered.”
In covered short selling, the seller has borrowed the securities or has otherwise made arrangements to fulfil his obligation to deliver the securities. In uncovered short selling, the seller is not in possession of securities or has not otherwise made arrangements to meet his delivery obligation.
Under the new initiative, SGX will publish daily reports on the aggregate volume and value of short sell orders matched and executed for the preceding trading day in each counter.
The exchange will also publish a weekly report which aggregates the daily short selling statistics from the previous week. The report will also carry account corrections for erroneously marked orders submitted by brokers on behalf of their clients.
The initiative is in response to the guidelines issued by the Monetary Authority of Singapore (MAS) on short-selling disclosure last January.
“Information on short selling activities is relevant to the trading decisions of market participants. For example, information that those securities are under sustained heavy short selling may indicate strong negative price pressure on those securities. Information on short sale transactions also helps to deter market abuse by alerting authorities to activities that may potentially disrupt the orderly functioning of markets, and aids in investigation and enforcement,” MAS said in its January statement.
The central bank noted that as information on short selling may be taken into account by other market participants when making trading decisions, all market participants are expected to accurately disclose the nature of their sell orders in compliance with SGX’s rules on short selling disclosure.
MAS said under the Securities and Futures Act, it is an offence to make false or misleading statement to a securities exchange, futures exchange or designated clearing house.
If convicted, the offender could be fined up to S$50,000 or jailed for up to two years or both.