Temasek-Olam deal: Many factors behind whether firm is publicly queried, SGX says

When assessing whether or not to issue a public query to a firm about unusual activity in the trading of its shares, the Singapore Exchange takes into account several factors, including the firm's financials, the outlook of the industry it is in and analyst reports.

The SGX will issue the query if the unusual trading activity cannot be explained by these factors.

The bourse operator made this statement on Sunday, after several commentators had asked why it had not queried Olam when its share price and trading turnover had surged in the past few weeks - before Friday's announcement that Temasek Holdings was planning a $2.5 billion takeover of the firm.

Corporate adviser and stock activist Mano Sabnani had also asked why Temasek or Olam had not requested a trading halt much earlier.

The SGX acknowledged that the 34.8 per cent rise in Olam's share price over six weeks from Feb 3 was higher than those of its peers, such as Wilmar International and Noble Group. However, it added, all three firms were trading within the price ranges set out in analysts' research reports.

"Such comparisons should be conducted with care as the financials and outlook of individual companies may differ even if they are within the same industry."

Nonetheless, the bourse operator noted that potential offerors and listed companies should monitor trading activities in their stocks closely and make immediate announcements if there appears to be a leak of information on the possible offer.

It added that since March 3, listed companies must tell the SGX "on a confidential basis" if they are in discussions that are likely to lead to a takeover.

"We do not discuss our dealings with regards to individual companies including notifications as required under the listing rules. If there are possible breaches of rules or requirements, we will investigate and take appropriate action."

"We take a serious view of all market misconduct in breach of the Securities and Futures Act, including potential insider trading and manipulation activities. We will spare no effort in conducting investigations on possible transgressions and will cooperate with regulatory agencies to enforce the law against offenders."

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