Is SGX Lax with Insider Trading?

YuuZoo’s 40% Rise in under 3 Days Raises Doubts

This week, in less than three days (Nov. 24-26), the price of Singapore-listed YuuZoo rose by more than 40% to 0.625 cents a share. This prompted questions from SGX (Singapore Stock Exchange), and subsequently there was a trading halt yesterday afternoon.

It looks like someone in SGX has this exciting job of monitoring which stock is running too fast and then shooting out a template questionnaire to the company.

The SGX task perhaps ends there, as I am left with no information on whether a thorough investigation was done into the circumstances leading to the spike.

My hunch is that there may have been some heavy insider trading — how else will a stock go up by more than 40% in less than three days? Any spike without some positive news can be dismissed as speculative activity. That was not the case with YuuZoo.

So, what was the purpose in a trading halt after the stock had run its course?

The halt was to make an announcement about a deal with Etisalat that gives it the ability to target the telco’s 20 million subscribers in Nigeria.

YuuZoo, incidentally, is believed to be “the world’s first third-generation social e-commerce company”.

According to a YuuZoo press release, Nigeria’s e-commerce market is currently worth over US$500 million with an annual potential of US$10 billion.

YuuZoo resumed trading this morning, triggering heavy profit-taking!

Looks like SGX will have to review its strategy on halting trades and apply greater controls on insider trading!

G Joslin Vethakumar

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4 Comments

Filed under Finance

4 responses to “Is SGX Lax with Insider Trading?

  1. Sullivan O'Malley

    Where did you get the information that this is likely to be an insider trading? What was the purpose of your article?

    I read your tweet – that linked to this article. Your tweet has nothing to do with the article at all!

  2. It was not a conclusion. It was my reading of what unfolded in the market with YuuZoo — three days of frenetic buying, leading to a halt to release information on a positive development for the company. Piecing this all together led me to doubt if there was any insider trading.
    The tweet and the blog have the same purpose — to present the case for reviewing the need for greater transparency with regard to sharing of data with investors. Not sure why you thought they are not linked.
    If someone was privy to market-sensitive information that is generally not available, then it is not a fair trading practice.

  3. Pingback: YuuZoo Regains Some Lost Ground as Oil Stocks Get a Hammering | Top of the Word

  4. Andrew

    Joslin i think you have a law suit coming your way soon. Accusing a company is one thing but you are pointing finger at the exchange too. Good luck

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