UPDATE 2-SGX to probe alleged Uni-Asia price manipulation 19 Oct 2007 20:28

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SINGAPORE, Oct 19 (Reuters) - Singapore Exchange <SGXL.SI> (SGX) said on Friday that it will investigate alleged price manipulation in the shares of ship financing firm Uni-Asia Finance <UAFC.SI> following a complaint by 33 retail investors.

The investors filed a complaint to SGX in which they alleged that trading curbs imposed by some Singapore brokerages had resulted in a sharp fall in Uni-Asia's share price.

SGX declined to reveal the brokerages named by the investors.

"This counter has been on our radar screen since late September, when the price started moving up," said Yeo Lian Sim, SGX's head of Risk Management & Regulation, at a press conference.

SGX queried Uni-Asia twice in October on its trading activity.

Brokerage firms usually impose trading restrictions on stocks whose prices have risen quickly, or if their clients' exposure to the shares cross a certain level.

"We have spoken to a broker or two and they have told us that this is part of their normal management of risk," SGX's Yeo said.

She said SGX does not have the authority to regulate such curbs, but if investigations show that the curbs were used to manipulate share prices, SGX will alert Singapore's white collar police.

"One of the major concerns of the retail investors is that in allowing the brokers to impose trading curbs, shouldn't the authority query the brokers when things get very bad," said David Gerald, president of the Securities Investors Association (Singapore), who is representing the 33 retail investors.

The trading curbs may involve demanding upfront payment for the shares and preventing clients from buying the shares on credit, reducing demand and so causing the share price to fall.

Uni-Asia fell from an intraday high of S$2.79 on Monday to close at S$1.59 on Friday. ((For more stories about Singapore's financial services sector, please double click on: [ID:nSINFIN])) ((Reporting by Chua Baizhen; Editing by Louise Ireland; Reuters messaging rm://[email protected]; Email [email protected]; Telephone +65 9858 9884))

Keywords: SGX INVESTIGATION/