Sky One latest to see sharp drop in share price

SINGAPORE — Shares in Catalist-listed Sky One Holdings plunged as much as 91 per cent yesterday, with the company becoming the latest to see a sharp drop in market value despite an apparent lack of negative drivers.

The Hong Kong-based logistics provider saw its share price fall as low as S$0.043 before requesting a trading halt so it could respond to the Singapore Exchange’s (SGX) queries about the massive price drop.

Before yesterday’s decline, Sky One’s shares had been trading in a fairly narrow band. In the last three months, its closing price had stayed between S$0.435 and S$0.48.

In response to those queries, it said “all known information has been duly announced in accordance with the listing rules” and “we are not aware of any possible explanation for the trading”.

The company announced in September last year plans to acquire Indonesian miner Energy Prima for S$400 million in a reverse takeover. Due diligence for the deal is still ongoing, it said in its response to the SGX yesterday.

While Sky One’s shares came off their intraday low after resuming trading, the market was not reassured enough for them to see much more than a token recovery.

The counter ended the session 80.43 per cent lower at S$0.092. The company was the most active counter yesterday by volume, with 389.8 million shares changing hands.

Sky One’s fall mirrors what happened earlier this month to Blumont, Asiasons and LionGold, which collectively saw S$8.6 billion in market value wiped out over three days. Voyage Research Chief Executive Roger Tan believes Sky One has become the latest counter to be targeted by disruptive manipulation.

“We’ve been seeing small- to mid-cap as well as Catalist companies all coming off and it looks to me that shortists are picking off one company after another,” Mr Tan told TODAY. “They are becoming easy prey as confidence in the small- to mid-cap segment has hit a bottom, following the troubles of Blumont, Asiasons and LionGold.

“That a counter can drop by 80 to 90 per cent shows the existing system has room for improvement to prevent such things from happening. One way is to introduce a good and fair circuit breaker — one that allows investors to calm down and assess without over-interfering (in) the market,” he added.

The SGX has said it plans to introduce circuit breakers by early next year. The system will halt the trading of a counter for five minutes if it breaches 10 per cent in either direction. The bourse also said late last week it is conducting an extensive review on the impact of the recent volatilities.

Meanwhile, the market uncertainty surrounding Blumont, Asiasons and LionGold continued yesterday, with all three coming under selling pressure. Blumont fell 21.4 per cent to S$0.128, LionGold dropped 16 per cent to S$0.21 and Asiasons declined 22.2 per cent to S$0.147.