More firms get reprieve on minimum trading price

The 13 companies include (above) KrisEnergy, KS Energy and Ramba Energy. The MTP rule requires all mainboard-listed shares to have a minimum price of 20 cents.
The 13 companies include (above) KrisEnergy, KS Energy and Ramba Energy. The MTP rule requires all mainboard-listed shares to have a minimum price of 20 cents.
The 13 companies include (from top) KrisEnergy, KS Energy and Ramba Energy. The MTP rule requires all mainboard-listed shares to have a minimum price of 20 cents.
The 13 companies include KrisEnergy,(above) KS Energy and Ramba Energy. The MTP rule requires all mainboard-listed shares to have a minimum price of 20 cents.PHOTOS: KRISENERGY LTD, BLOOMBERG, RAMBA ENERGY
The 13 companies include (from top) KrisEnergy, KS Energy and Ramba Energy. The MTP rule requires all mainboard-listed shares to have a minimum price of 20 cents.
The 13 companies include KrisEnergy, KS Energy and (above) Ramba Energy. The MTP rule requires all mainboard-listed shares to have a minimum price of 20 cents.PHOTOS: KRISENERGY LTD, BLOOMBERG, RAMBA ENERGY

SGX giving 13 mainboard-listed companies new deadline of Sept 1; total so far now 82

More mainboard-listed companies hit by volatile markets are getting a reprieve to meet the minimum trading price (MTP) requirement that came into effect two months ago.

The Singapore Exchange (SGX) is giving 13 firms until Sept 1 before their six-month volume-weighted average prices are reviewed. That brings to 82 the total number of companies given extra time.

The 13 include China Gaoxian Fibre Fabric Holdings and oil-related counters such as KrisEnergy, Mirach Energy and Ramba Energy, rig-owner KS Energy and shipyard Vard Holdings.

The MTP rule, which is aimed at curbing speculation and market manipulation, requires all mainboard-listed shares to have a minimum price of 20 cents.

In March, the SGX allowed 69 companies, whose volume-weighted average prices had fallen below 20 cents, until Sept 1 to comply with the MTP rule.

Those firms had failed to meet the 20-cent rule, in part due either to extreme market volatility in January, or after doing share consolidations, or having announced but not yet completed corporate action.

Eight of the 69 failed to meet the MTP rule even after undertaking share consolidations.

Two of the 13 firms given reprieves yesterday were already on an SGX watch list for failing to meet profitability and market value requirements.

Firms are watch-listed if they rack up three straight years of losses or if their 120-day daily average market value is below $40 million.

Four other companies go on the list today for failing to meet profitability and market value requirements.

The SGX has placed 41 companies on the watch list since March for failing to meet the MTP rule.

These join 33 others that have been listed for not meeting the financial or market cap criteria.

All firms on the watch list have three years to meet the minimum requirements or face delisting.

Veteran investor Mano Sabnani said being on the MTP watch list is not as bad as being listed for failing to meet financial or market cap criteria.

"Since the MTP watch list was introduced in March, the market hasn't really punished companies whose share price is below 20 cents," he said.

"Unlike those that are on the financial (entry criteria) watch list, which means your financials are more risky."

He added: "If you are on the MTP watch list, without being on the financial watch list, it isn't that alarming.

"Those that are on the MTP watch list just have to work hard to improve their results, or do a share consolidation to get above 20 cents."

A version of this article appeared in the print edition of The Straits Times on June 03, 2016, with the headline 'More firms get reprieve on minimum trading price'. Print Edition | Subscribe