SINGAPORE (BLOOMBERG) - Singapore Exchange Ltd. said it would cancel 91 trades in New Silkroutes Group Ltd. after a reverse stock split led to investor errors that briefly wiped out almost all of the company's value.
The company, which has interests from oil and gas trading to developing communications technology, opened at 1.5 Singapore cents on Wednesday after a 500:1 consolidation. Based on Tuesday's closing price, each of the new shares should have been worth 50 cents. More than 52 million of them changed hands in erroneous transactions, according to the bourse operator.
Silkroutes was the second most-actively traded stock by volume in Singapore, according to data compiled by Bloomberg.
"SGX was satisfied these transactions were the result of genuine error on the investors' part, attributable to the recent consolidation of New Silkroutes shares," the exchange said in an e-mailed statement.
"Allowing the erroneous trades to stand would cause disproportionate harm including the settlement risk of failed trades of significant size."
More than 100 Singapore-listed companies have carried out reverse stock splits since March to comply with a new directive that all mainboard-listed shares have a minimum price of 20 Singapore cents. The rule is part of the regulator's efforts to boost confidence in Southeast Asia's biggest bourse after an unexplained penny-stock rout in 2013 wiped out US$6.9 billion (S$9.71 billion) in market value.
Silkroutes traded at 50.5 cents as of 2:45 p.m. in Singapore.