Thursday, November 5, 2015

Hot stock: SIA share price up on news of takeover bid for Tiger Airways

Hot stock: SIA share price up on news of takeover bid for Tiger Airways

SINGAPORE Airlines' (SIA's) share price gained 0.45 per cent or 5 Singapore cents to S$11.20 by 1.10pm on Friday after its shares resumed trading, following news of its voluntary conditional general offer for all the Tiger Airways shares that it does not already own.
SIA had requested a trading halt before the market opened on Friday, and announced its offer for Tiger Airways shares shortly after.
SIA, which currently owns 55.8 per cent of Tiger Airways, intends to delist and privatise the budget carrier.
Tiger Airways had also requested a trading halt on Friday morning before the market opened. Its shares had not resumed trading as at 1.10pm.
SIA is offering Tiger Airways shareholders S$0.41 per Tiger Airways share in cash, as well as an option to subscribe for SIA shares at S$11.1043 apiece.
The offer price represents a premium of 32 per cent, 35 per cent and 42 per cent respectively over the last traded price, the one-month and three-month volume-weighted average prices of Tiger Airways shares, preceding the offer.
"We believe our offer to Tiger shareholders is compelling and hope that it will be considered favourably. We also believe that Tiger's prospects to grow independently are limited in the highly competitive LCC (low-cost carrier) landscape in Southeast Asia," said SIA CEO Goh Choon Phong in an email to SIA group staff on Friday morning.
"The early benefits to Tiger from being part of the SIA group have already been demonstrated. Feed that Tiger gets from Scoot, and the feed that Tiger provides to Scoot, is important for the long-term success of both carriers, and for the all-important development of the Singapore hub."

Singapore looking into potential spoofing in derivatives markets

Singapore looking into potential spoofing in derivatives markets

[SINGAPORE] Singapore's stock exchange is evaluating possible incidents of spoofing in its flourishing derivatives market, following complaints over the dishonest trading practice.
Singapore Exchange Ltd has received complaints that some market participants are making orders and then canceling them before they can be executed. As both the regulator and the operator of Southeast Asia's largest equities and derivatives markets, SGX, as the exchange is also known, is reviewing these possible incidents of spoofing, according to its chief regulatory officer.
"With the sort of volumes that we have in the derivatives market, there are bound to be instances where you see what appears to be unusual trading," Tan Boon Gin, a lawyer who studied at Harvard and Cambridge universities, said in an interview. The cases haven't been definitively classified by SGX as spoofing, Mr Tan said.
Mr Tan is examining whether Singapore's existing false-trading laws are strong enough to prosecute spoofers.
"One of the things that we'll be looking at very carefully is whether or not there's a need for a spoofing law," he said.
SGX is still living with the consequences of an as-yet-unexplained stock crash in 2013. Two years later, share trading in the city-state, where SGX enjoys a monopoly, has yet to recover. Volume remains 25 per cent lower than before the tumble. Derivatives accounted for 41 per cent of its most recent quarterly revenue amid soaring demand for futures and commodities contracts including China A50 Index, Nikkei225 and iron ore. That compared with 32 per cent a year ago.
CHICAGO CASES
Spoofing has gained prominence recently, especially with a series of high-profile cases involving the US futures markets.
On Tuesday, a jury of eight men and four women in a Chicago federal court took about an hour to find Michael Coscia, head of Panther Energy Trading LLC, guilty on spoofing charges.
His trial was the first use of an anti-spoofing law after the 2010 Dodd-Frank Act made it illegal to manipulate prices in the US by placing orders without intending to trade on them. The law also provided an easier standard of proof to try cases.
In what may be the next spoofing trial, Chicago federal prosecutors are seeking extradition of a UK trader on charges tied to the May 2010 flash crash, which temporarily wiped out almost US$1 trillion in value of U.S. equities. The defendant, Navinder Singh Sarao, is fighting the extradition bid.
Another pending case involves Chicago-based trader Igor Oystacher and his firm 3Red Trading LLC, which were sued by a regulator, the Commodity Futures Trading Commission, for allegedly spoofing over 51 trading days.
New safeguards Singapore introduced safeguards last year to protect investors from a similar crash to the 2013 event. If the move in a stock reaches a certain threshold, circuit breakers automatically bring trading in the security to a halt, hopefully stopping a spiral of falling or rising share prices.
Mr Tan led the Commercial Affairs Department investigation into the 2013 stock rout probe before joining SGX in June. During a spell at the Monetary Authority of Singapore, he worked on the central bank's first civil lawsuits on stock rigging and insider trading.
SGX in September had its enforcement powers expanded. It can now fine listed companies and their directors and suspend the activities of financial advisers. The strongest action it had previously been able to take was the ability to publicly reprimand a company or delist the shares.
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Japan's Abe urges China to press ahead with structural reform

Japan's Abe urges China to press ahead with structural reform

[TOKYO] Japanese Prime Minister Shinzo Abe on Friday urged China to maintain transparency and proceed with structural reform even as concerns grow over its economic slowdown.
Mr Abe told a seminar that China's development was crucial for global economic growth and that Japan would provide support as needed.
The premier also said Japan's economy was getting closer to defeating two decades of deflation and that excessive yen strength had been corrected.
REUTERS

China's Xi and Taiwan's Ma go Dutch in historic dinner in Singapore

China's Xi and Taiwan's Ma go Dutch in historic dinner in Singapore

[HONG KONG] When Chinese President Xi Jinping and Taiwanese President Ma Ying-jeou finish dinner after their historic summit on Saturday in Singapore, they will split the bill.
Going Dutch illustrates the delicate protocol balance the leaders must strike to maintain their uneasy peace 66 years after the civil war that left their peoples divided. In it, Mr Xi must avoid elevating Mr Ma's stature to that of an equal, while Mr Ma must avoid giving the appearance he is somehow subservient.
Every word, every move counts. To preserve neutrality and avoid conferring any legitimacy on the other's government, the two leaders will address each other as "mister" rather than president.
They'll shake hands for the cameras, but avoid the sort of joint press briefing leaders usually hold after meeting. And they'll have a low-key dinner before splitting the bill, according to an official with knowledge of the plan.
"People will look carefully at who proffers his hand first, who makes the first move forward to shake hands," said William Stanton, director of the Centre for Asia Policy at the National Tsing Hua University in Taiwan.
"Do they have a hug? Who initiates? What's the body language? Does Xi frown? Does Ma look at his feet? Do they stare at each other directly? This thing is going to be analysed to death."
'ONE CHINA'
For the leaders, the meeting - two years in the making via painstaking negotiations - presents an opportunity to reduce tensions. It's also fraught with peril as they navigate the diplomatic limbo of their "one-China" principle. Both sides acknowledge being part of one country, but disagree about what that means.
Mr Ma's Kuomintang, or Nationalist party, has never acknowledged that its 1949 civil war defeat made the Communist Party the rightful rulers of the world's most populous nation. The Communist Party in turn has never acknowledged Taiwan's right to rule itself.
Each side to this day carefully fights any official word or action that might give anyone the impression either is wrong. China insists on listing Taiwan as a Chinese province in all official maps and documents.
It blocks the island's participation in international forums or allows it to join only as "Chinese Taipei," and opposes economic or trade agreements with other countries. Such sensitivities have tripped up Taiwan's efforts to join the new China-led Asian Infrastructure Investment Bank.
SINGAPORE HOSTS
The venue - Singapore - was carefully chosen. The Southeast Asian country, with its Chinese-speaking majority, hosted envoys from both sides during a ground-breaking meeting in 1993. Mr Ma will travel to meet Mr Xi because the Chinese president was already scheduled for an official visit to the city-state.
"For all the photo opportunities and KMT spin, there is no chance that Xi will let Ma outshine him in this meeting and thus claim to have held the initiative in Ma's hands," said Steve Tsang, a senior fellow at the University of Nottingham's China Policy Institute. "We will see how this unfolds soon enough."
The talks will cover topics ranging from cross-strait security to Taiwan's domestic affairs, going by Mr Ma's comments and those of other officials. The dinner on Saturday will be "casual," Mr Ma said at a briefing on Thursday.
His wife won't attend and he'll leave the lapel pin with Taiwan's flag behind. Mr Ma will leave for the airport shortly after the closed-door affair, according to the official with knowledge of the arrangements.
SEPARATE BRIEFINGS
The first 10 minutes of the one-hour summit, which starts at 3pm, will be open to media, the official said, after which the pair will talk in private. There will be separate briefings by the two sides afterward.
"It goes back to the old battle between the PRC and the ROC over who really represents China," Mr Stanton, a former US envoy to Taiwan, said, using shorthand for China's and Taiwan's official names.
"Whoever's the host is the most senior person. With all of this symbolism, Ma doesn't want to do anything to belittle his dignity as the president of the ROC."
Mr Ma said the discussions won't produce any "secret deals or promises" and the two would focus on a way to create a mechanism for regular talks between leaders across the strait.
"We will tell Mr Xi Taiwan's current situation, so that he can better understand and take in full consideration when formulating cross-strait policies," he said on Thursday.
The meeting will also give the men the chance to size each other up in person, even if Mr Ma is on the way out of office. Taiwan will elect a new president in January and Mr Ma cannot run again.
"I have not met him yet, so I don't have a first impression of him," Mr Ma said. "Once I do, I will tell you."
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