The Singapore Exchange (SGX) has urged investors and potential investors to exercise caution when dealing in the shares of engineering services provider Koyo International.

Its stock price stayed steady or rose in the period from Oct 26 last year to Jan 14 despite the decline in the broad market, the SGX said yesterday after markets closed.

Koyo shares steadily rose from 38 cents to 39.5 cents at market close on Thursday. Koyo shares lost 13.9 per cent yesterday, mostly in the last 30 minutes of trading, to close down 5.5 cents at 34 cents.

The SGX's review of the trades in Koyo showed that a small group of individuals was responsible for 60 per cent of the trading volume during the Oct 26 to Jan 14 period, and at least half of these trades were due to this group of individuals buying and selling among themselves.

The SGX queried Koyo on Wednesday on the unusually high volume of trades in its shares that day.

The company responded on Thursday, saying that it was "not aware" of any information not previously announced that might explain the high trading volumes.

Koyo also said that while it has been engaged in discussions relating to potential new projects in recent weeks, it has not been informed of any decision.

It said it cannot conclude that the unusual trading activity is related to this and that it is not aware of any other possible explanation.

The bourse's announcement on Koyo shares yesterday was its first "Trade with Caution" alert following its move to make such warnings more detailed and targeted.