The title in one of the articles in the Star today read as follows:
" Support for Icon, Boustead Plantation Shares"
In the olden days, this would mean that the counters have received the support of the investing public, displayed by considerable demand and most of the time, upward price movement. You would not have thought otherwise of this as any other form of artificial support of the counter's price is illegal under the securities laws.
But not necessarily so nowadays. The said article above went on to stated that both counters were supported by the designated 'Price stabilizer', investment banks which were given the resources to buy the shares with the clear intent of stabilizing the price (which presumably would have dropped without this action). It does not seem to indicate the public supported the shares at all, or more like there were more sellers then buyers.
How could the authorities allow this to happen? Why the double standard? The answer to which eluded me until today. But I trust the authorities have thought long and hard about this though.
Anyway, we all know that the market is not perfect an in my book I would like to keep it that way. That is the way people can make money off the market. Stopping the price from coming down is akin to stopping someone from making money on dip which would have been there if not for the stabilising mechanism.
I know someone would be able to provide a reason for this but personally i don't like it. If you could stabilize the price during IPO, why can't you stabilize the price post IPO? In my humble opinion, the market could have priced the IPO wrongly at subscription and should be allow to freely adjust itself immediately after the IPO.
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