Singapore listed Raffles Education and Midas hit by negative reports

Singapore Stock Market Comments

- reports by Chinese websites hurting investors' confidence in Midas and Raffles Education

Over the past one week, Singapore listed companies Midas and Raffles Education have been hit by certain negative reports/rumors in the PRC.  The rumor concerning Midas was that one of the top management of the company has been arrested in the PRC on alleged corruption charges.  The negative report concerning Raffles Education was that bank accounts of companies related to the Group in the PRC have been frozen under investigation for using the service of a company called Blooming Enterprises.  Both companies have since made official announcements through SGX to deny these allegations or reports.

Unfortunately, the damage to both companies and shareholders have been done…….Midas stock price has fallen 24% within 9 trading days from recent high of $2.00 (12th july 2007) to $1.52 (24th july 2007) while Raffles Education stock price also tumbled 16% in 5 trading days from $2.36 (17th july 2007) to $1.99 (24th july 2007).  When both companies made announcements to deny these allegations, the stock prices rebounded briefly only to see selling pressures return quickly.  The market has spoken……investors are still worried that more bad news may hit these two companies.

After what happened to China Aviation few years ago, who could blame investors for acting so swiftly the moment they smell something funny…….cut first talk later!! It will take some time before the smoke is clear for these two companies but since results season is just around the corner, maybe this will provide some positive boost to the battered stock prices…..assuming both companies can continue to deliver positive results.