Skip to main content
Rebuttle To Comments By SC & Bursa
Designation, Disclosure, Speculation & Transparency

This has been an eventful week for stocks, and if you are involved in Malaysia and Singapore stocks, the week was even more evntful on the issue of stock designation and disclosures. Huge articles were written in The Edge and The Star Biz on the related issues. Interviews were conducted with the head of SC and Bursa, and here are my rebuttals and comments:

Yusli (Bursa head honcho): In deciding to designate, retail sentiment is a concern but not necessarily a primary one. What is of paramount importance is the maintenance of a fair and orderly market ..
My comments: Good answer, retail sentiments should not be a primary factor is designation.

Yusli: In the case of IRIS, an UMA and Market Alert were issued previously to warn investors not to be driven by excessive speculation in their investment decisions relating to IRIS.
My comments: The warnings were not serious enough. Investors do not take these warnings to heart because just this year alone there were 20 "Unusual Market Activity" / Market Alerts issued this year so far, how many were designated?? Because of the low hit ratio, investors generally brush them aside. If the hit ratio is closer to 50%, you bet investors would take these warnings seriously. Then investors would try to avoid getting involved in these counters once warnings are issued.

Yusli: It is not possible to have an automatic mechanism for designation because there are several factors that have to be considered that are fluid, not static. Designation is based on a set of criteria & parameters. We are not at liberty to disclose these parameters as doing so would jeopardises the effectiveness of our surveillance function.
SC : Actions such as designation of securities are taken in specific circumstances after consideration of all aspects of trading of a security and a thorough assessment of all relevant factors. Such a considered approach allows a holistic review of a particular situation, permitting a nuanced and un-mechanistic response.

Comments: As per my previous blog, the designation can have automatic goalposts. Right now, we have no knowledge of the crtieria. If SC & Bursa are concerned on syndicates "escaping and navigating" via these goalposts, there could be additional liberty to designate above and beyond these stated rules, but there must be clear rules / mechanism that all investors should know beforehand. Right now, investors are playing in the dark. Its like betting on an Arsenal / MU match and MU is giving half a goal, but with 20 minutes remaining, the goalposts of Arsenal is shrunk by half in width - it is not fair. Buyers of these counters buy on the understanding of available facts, not on sudden changes in rules that are currently impossible to divine or estimate. A balance has to be struck on effectiveness of governance and transparency.

Zarinah (SC): If they know there are dishonest people (in the SC), please let me know. Don't just talk about it.
My comments: As the governing body, the onus should not be on the public but rather that the structure of the organisation must be transparent enough to gain respect and integrity among investors. Hence if there is "room" for hanky panky to happen, it must be dealt with internally. By have automatic suspension / designation rules being made public, it solves a lot of problems and reduces the "vicious rumours". As a public body with a strong governing threshold, the independence and transparency of the body is of utmost importance. Why give room for the public to suspect or talk!?

Comments

Popular posts from this blog

My Master, A National Treasure

REPOST:  Its been more than two years since I posted on my sifu. This is probably the most significant posting I had done thus far that does not involve business or politics. My circle of close friends and business colleagues have benefited significantly from his treatment.


My Master, Dr. Law Chin Han (from my iPhone)

Where shall I start? OK, just based on real life experiences of those who are close to me. The entire Tong family (Bukit Kiara Properties) absolutely swear that he is the master of masters when it comes to acupuncture (and dentistry as well). To me, you can probably find many great dentists, but to find a real Master in acupuncture, thats a whole different ballgame.


I am not big aficionado of Chinese medicine or acupuncture initially. I guess you have to go through the whole shebang to appreciate the real life changing effects from a master.


My business partner and very close friend went to him after 15 years of persistent gout problem, he will get his heavy attacks at least…

PUC - An Assessment

PUC has tried to reinvent itself following the untimely passing of its founder last year. His younger brother, who was highly successful in his own right, was running Pictureworks in a number of countries in Asia.

The Shares Price Rise & Possible Catalysts

Share price has broken its all time high comfortably. The rise has been steady and not at all volatile, accompanied by steady volume, which would indicate longer term investors and some funds already accumulating nd not selling back to the market.


Potential Catalyst #1

The just launched Presto app. Tried it and went to the briefing. Its a game changer for PUC for sure. They have already indicated that the e-wallet will be launched only in 1Q2018. Now what is Presto, why Presto. Its very much like Lazada or eBay or Alibaba. Lazada is a platform for retailers to sell, full stop. eBay is more for the personal one man operations. Alibaba is more for wholesalers and distributors.

Presto links retailers/f&b/services originators with en…

How Long Will The Bull Lasts For Malaysia

Are we in a bull run? Of course we are. Not to labour the point but I highlighted the start of the bull run back in January this year... and got a lot of naysayers but never mind:






























p/s: needless to say, this is Jing Tian ... beautiful face and a certain kind of freshness in her looks and acting career thus far



http://malaysiafinance.blogspot.my/2016/12/bank-negara-may-have-switched-on-bull.html


I would like to extend my prediction that the bull run for Bursa stocks should continue to run well till the end of the year. What we are seeing for the past 3 weeks was a general lull where volume suddenly shrunk but the general trend is still intact. My reasons for saying so:

a) the overall equity markets globally will be supported by a benign recovery complemented by a timid approach to raising rates by most central banks

b) thanks to a drastic bear run for most commodities, and to a lesser extent some oil & gas players, the undertone for "cost of materials" have been weak and has pr…