SocGen permanently halts trading of BYD Electronic's daily leveraged certificates after airbag trigger

SocGen as the designated market maker for the DLCs, may not provide a quotation if they are valueless.
SocGen as the designated market maker for the DLCs, may not provide a quotation if they are valueless.PHOTO: REUTERS

SINGAPORE (THE BUSINESS TIMES) - SG Issuer, Societe Generale (SocGen) group's issuing entity, on Thursday (May 27) permanently suspended the trading of BYD Electronic (International) Company's 5x short daily leveraged certificates (DLCs) on the Singapore Exchange (SGX). The suspension took effect at 9am.

The move came after BYD's stock rose by 15 per cent and triggered the airbag mechanism for counters DBEW and DKHW at 3.15pm on Wednesday.

As BYD's stock saw a sharp intraday rise of 20 per cent in its price to HK$55, SG Issuer said the DLCs have lost 100 per cent of their value and will not recover in value even if they resume trading at a lower price. Thus, SocGen, as the designated market maker for the DLCs, may not provide a quotation if they are valueless.

BYD Electronic is a manufacturing enterprise whose products cover smartphone and PC, new intelligent product, automotive intelligent system and medical and health. It was spun off from electric vehicle (EV) maker BYD Company and listed on the Hong Kong Stock Exchange on Dec 20, 2007. 

DLCs are a specified investment product under Monetary Authority of Singapore guidelines as they have structures, features and risks that may be more complex to everyday investors. They offer investors fixed leverage of three to seven times the daily performance of the underlying stock or index.

Correction note: A previous version of this story mistook BYD Electronic as the same company as EV maker BYD Co. We are sorry for the error.