SINGTEL SHARES (Probe on spurt buying)

Mr Low Thia Khiang asked the Deputy Prime Minister whether the Singapore Exchange (SGX) has completed its probe on the last minute spurt buying of SingTel shares on 13th October 2000 resulting in the sudden upward surge of STI index.

The Deputy Prime Minister (BG Lee Hsien Loong): Mr Speaker, Sir, on 13th October 2000, there was a 30% increase in the share price of Singapore Telecommunications Limited ("SingTel") resulting in a sudden upward surge of the STI index on that day. The increase in share price was due to a last minute order to buy 2 million SingTel shares at $3.50 each, keyed in by Nomura Securities Singapore Pte Ltd. The order was given at 5.04 pm, just 1 minute before the end of the pre-close session on the Singapore Exchange Securities Trading. 662,000 shares, representing all the outstanding sell positions during the pre-close session, were matched at $3.50, causing SingTel shares to close at that price. The Singapore Exchange ("SGX") had confirmed that the trade was not an error trade.

As a regulator of the securities and derivatives market, SGX is concerned with unusual price or volume fluctuations on any share counter. SGX will take action against market participants engaged in trading activities aimed to create a false market in contravention of SGX's rules and bye-laws.

Based on its investigations, SGX has ascertained that there could be a possible violation of the Securities Industry Act. It is an offence under the Securities Industry Act to create a false or misleading appearance in the market for a share counter. Accordingly, based on advice from MAS, SGX has referred the matter to the Commercial Affairs Department for further investigation.

Mr Low Thia Khiang (Hougang): Sir, is the Commercial Affairs Department now investigating the matter and how long would it take to complete its investigation?

BG Lee Hsien Loong: Mr Speaker, Sir, as I have said, the Exchange has referred the matter to CAD and I assume that CAD is now investigating the matter. I have not heard when they will complete the investigation.