Tuesday, January 22, 2013

UMA On Bursa

This was a really funny quip, somebody suggested that an UMA should be issued to the Bursa for yesterday's market weakness. Well, truth be told, the market had its biggest single day drop since October 2011, plus it was unusual market activity, and thirdly nobody can really say for sure why.

Sure there is speculation about the reasons, but its pretty much like a deserving UMA to me. If you were to ask Bursa, they'd probably reply: "We are not aware of any unusual or material developments".

So, UMA it is to Bursa. You fall some more, we will issue a second UMA or designate all stocks ok.

Seriously, its about elections. Tell us something we don't know. It has to be held soon. How far will it go down to prior to election day. I think its more likely to be closer to 1500 than 1550. Thats just my view.

If opposition wins, we may see a knee jerk quick sell down to 1450 to be followed by a swift rebound provided the transition of power is smooth. If not, we could be in for more uncertainty and downside.

Its all necessary as in birthing pains, but it will all turn out well ...

Assuming the opposition wins, and power transition was smooth, I believe funds will flow back almost instantaneously within weeks. It is not as dire or nasty as some make it out to be. All I am worried about is the transition of power process be smooth.

A cleaner government, better management of resources, more transparency, less leakages ... how not to attract more funds? It will not be perfect, they will make mistakes, there will even be cases of corruption and mismanagement, but I think they will be a lot fewer and lesser in quantum. How not to have a vibrant post election market?

14 comments:

Unknown said...

Well what if opppositiom doesnt win n barisan najis wins ?

William Wang said...

My belief are two possibilities. 1 - Cronies with ill gotten money have to park their money elsewhere in case there is a change in government with increasing reality. 2 - PNB is paying near record high dividends. Nothing can be worse than the present perception that the government is non-transparent & corrupt, so a change is indeed very good for the market.

ET said...

I share similar views on the market reactions should PR is the next govt. I am however doubtful that BN will go down without a fight; ie attempt to create a situation where they can justify retaining power. will Najib behave like Koh Tsu Koon or be like Khir Toyo?

Unknown said...

i don't think so bcus market will adjust before election. so after election there will be a non event

SSrahman said...


It aint over till the fat lady swallows a diamond.
Kopitiam talk says it maybe due to
1]What mahatir said about citzenship to non malays in the 50s.
2]What ibrahim ali said about the bible
3]What the bank islam chief economics officer said about the election results.
4]What najib did not say
5]What lge said about the bible
6]What epf did with fgv
7]what the govt. is not telling the people
8]what everyone said about if pr wins the elections.
9]what deepak said that he knows but not telling
10]what hadi and nikaziz said about the bible.
All these guys are giving me and many more like me a Big F$$king headache.
Just stuff the listen11 lady somewhere in numbers.
TQ

Salvatore_Dali said...

unknown: then it goes back to 1650-1700 ... but longer term I believe a PKR gov will propel the index to 1800 by end of 2013. Just that there is more volatility in the beginning.

ET: Nobody thinks that Bn will go down without a fight, but they have to jaga the possibility of losing, then they have to jaga the need for immunity for past indulgences, I strongly believe both sides have talked about that immunity / witch hunting aspect, .... if they can pass the baton cleanly, maybe the new gov can tone down the witch hunt, etc...

Unknown: yes, mkt is adjusting, but you can only adjust based on what is likely to happen... you cannot adjust if an unknown black swan happens ... what if there was a coup, or martial law emergency, or riots ... so the transition of power if any MUST be smooth

SSRahman: LOL, very true and love the shooting of own foot with own assault rifles ... too many holes in my cheese

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solomon said...

Issuing UMA when it is going up, it deter the momentum of rocketing. On the other side of coin, issuing UMa during a sell off will create tsunami of sellers....end to end, whether a bull market is for sure with plenty of liquidity....underperform now does not mean forever...

Salvatore_Dali said...

bossi,

go ahead

mapsscom said...

ON THE 11.7.11,THE KLCI WAS AT A NEW ALL TIME HIGH AT 1597.08.
BY 26.9.11,THE KLCI WAS AT 1310.53.
A DROP OF 286.55 PRIOR TO THE FIRST SPECULATIVE GE13 DATE ON 11.11.11.
NOW,THE GE13 DATES ARE GETTING REAL.I HAZARD A GUESS OF -300 POINTS IN A MONTH FROM NOW.

Digital said...

Here the possibilities:
1. PR win, smooth transition=Market fall few days and then shoot up.
2. PR win, chaos transition=Market fall and only recover if the transition over.
3. BN win, smooth transition (no street rally)=Market shoot up.
4. BN win, street rally=Market fall till everything stabilize and then shoot up.
5. No win/No lose=Everyone go fishing and forget about the market.

Unknown said...

Market as I read it has already discounted a very narrow win for BN. Therefore further market slide will be limited unless new development indicates otherwise.

abel abel said...

I am more concerned about the inner conflicts within PR. The immediate ones being who's gonna be PM (PAS says Hadi Awang, PKR says Anwar), the allocation of govt positions to East Malaysian politicians and the Shariah law issue between DAP and PAS.

Even with a smooth power transition, there's way too many uncertainties that that they should have cleared since 2008.

The market is gonna be volatile in 2013 if PR wins.

reference:
http://www.themalaysianinsider.com/malaysia/article/pas-delegates-lobby-for-hadi-awang-as-pm-not-anwar

http://www.malaysia-today.net/mtcolumns/guest-columnists/50896-why-sabah-must-take-itself-back-without-pkr

http://www.themalaysianinsider.com/mobile/malaysia/article/dap-leadership-to-quit-if-hudud-law-added-to-pakatan-agenda/