Two companies on the Singapore bourse were particularly hard hit yesterday during a trading session that saw the market close below 3,000 points for the first time since February last year.
Fishery group Pacific Andes Resources Development and its China Fishery Group subsidiary were hammered on news that they are under investigation by market regulators here, while Silverlake Axis was targeted in a short-seller's critique.
Pacific Andes Resources fell 1.2 cents or 28.6 per cent to three cents - a level last seen in 2001, while its China Fishery unit nosedived seven cents or 49.3 per cent to a record low of 7.2 cents. Both counters were among the most heavily traded stocks yesterday.
The deep-sea-fishing group announced late on Thursday night that the Monetary Authority of Singapore (MAS) and the Commercial Affairs Department had informed it that they were investigating transactions relating to their shares that may have breached the securities law. The two agencies want information and documents from Oct 1, 2011, relating to the group and its dealings with certain third parties, "one of whom is the group's trading party".
This comes as Pacific Andes Resources Development, one of the world's largest seafood companies, has been trying to resolve its substantial debt problem and get back on track following political troubles in Russia.
It's quite serious when the Commercial Affairs Department gets involved.
They won't announce such investigations unless they have strong evidence of wrongdoing. Investors should take a wait-and-see approach.
IG MARKET STRATEGIST BERNARD AW, on the probe into Pacific Andes Resources Development, which has operations in Peru. Its unit China Fishery Group is also being investigated by market regulators
"It's quite serious when the Commercial Affairs Department gets involved," IG market strategist Bernard Aw told Bloomberg. "They won't announce such investigations unless they have strong evidence of wrongdoing. Investors should take a wait-and-see approach."
The regulators have also asked for information from parent company Pacific Andes International Holdings in Hong Kong.
Its stock tumbled 30.8 per cent in its biggest single-day drop to 17 Hong Kong cents yesterday.
Software solutions provider Silverlake Axis felt the heat as well, after a report by an anonymous short-seller.
The firm called for a trading halt "with immediate effect" at 1.20pm, pending an announcement, after its stock sank as much as 27 per cent in midday trading.
The counter closed 20.5 cents or 24.4 per cent down at 63.5 cents - its lowest since the second half of 2013.
The 42-page short-seller report, authored by a "razor99", has been circulating among investors since Thursday night, according to The Business Times.
"It is unfortunate that such an anonymous report can have an impact on the stock as it lacks credibility," said Mr David Gerald, president and chief executive of the Securities Investors Association Singapore (SIAS), in a statement.
"As to the accuracy of the report, it is incumbent on the company to respond immediately," he said, adding that this is not the first time that the stock has come under attack.
"SIAS calls on all listed companies to be as transparent as possible to their shareholders to prevent such attacks from members of the online community who indulge in such attacks for personal gain," said Mr Gerald. "Companies must be prompt in responding to such attacks to allay the fears on the part of the investors and consequently avoid losses."
Silverlake Axis, which provides digital economy software solutions and services to the financial, retail and logistics industries, was among six Singapore companies to have made it to Forbes Asia's "Best Under a Billion" list this year.
The Malaysia-based firm posted a 22 per cent rise in net profit to RM77 million (S$26.3 million) for the third quarter ended March this year, up from the same period a year ago.