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Friday, January 11, 2013

Market Food for Thought

Nowadays, we just can't judge a stock by its daily volume and price movement. There's so many counters practicing 'Pump' and 'Dump' .... if you know what i mean. Best still, these stocks usually trade up few hundred % in a matter of days for no apparent reason with no substancial news. When queried by the authorities under UMA (unusual market activity), the Board of Directors will (most if not all the time) denied knowing anything that contributed to the substancial price movement.

The question here is, where does all these trading volumes come from. In some cases, the total trading volume for 1 or 2 weeks exceeds MULTIPLE TIMES the company's total Shares Issued. Other than the principal shareholders, would retailers have so many shares to churn the market.

On a brighter note, these are the same counters that keeps the stock market alive and liquid. So, should the authorities just legalised 'Market Management' across the board. To look good in the eyes of foreigners and to uphold our Malaysia Boleh principle, we need to also show that most of the 2nd liners in Bursa are doing well (in terms of share price), not just the Composite Index points (which is made of of selected Blue Chips).