Friday Market intervention

We have seen a brilliant market intervention by our Malaysia Government on Friday's second trading session. A massive selling down of share prices particularly aimed at KLCI component shares must be an institutional selling. Some funds must have joined the selling force as short selling. We don't want funds to get hurt but if you don't impose substantial losses upon the funds, their preying movement will not be halted. We have a very very very simple way to burn the funds that have joined this afternoon's selling down action : to burn the funds using T+3.

As Fund Managers are eligible to move share prices, to do short selling, hence Fund Managers are the only party that can profit from the falling of share price. But bad loans in banking sector may increase and spread if share price does fall over 80% within 2 weeks' time. We urge our Malaysia Government to halt the preying movement of funds by imposing losses upon them.

The massive sell down occurred in this Friday afternoon before 3:30 pm. Our Malaysia Government intervened the market from 3:15 pm. We see our Malaysia Government not only buy up the share prices, but also in huge volume. These shares SHOULD never be lent to any fund for a short while. Our Malaysia Government MUST not buy up any share price next week for no reason. This is utmost important, therefore we reiterate it in capital letter below :

OUR MALAYSIA GOVERNMENT MUST NOT BUY UP ANY SHARE PRICE NEXT WEEK FOR NO REASON.

On next Monday, those funds may expect our Government to buy up shares for them to sell down. If our Government does nothing instead, those funds may start another round of selling down the share price without a massive volume. Notice here, the selling down is NOT accompanied by massive volume. Then comes to Tuesday next week, we expect the trading volume may shrink and share price movement narrowed. Then comes to Wednesday, i.e. T+3, the final day to transact shares. Those funds that joined Friday's selling down movement may start their last selling down attempt. Our Government should prepare to intervene the market at Wednesday opening, with the intention only to retain the share prices. Those funds must buy up the shares around 11 am, we strongly suggest our Government to follow suit. Both our Government and those funds are chasing after the share price. This is a rebound that filled with blood !! The blood of those funds that joined the sell down on this Friday afternoon. Just keeping the share price at the place where it belongs without much push up movement. Those funds will face heavy losses if our Government makes little movement. The day after Wednesday i.e. Thursday is another T+3 for those funds for their action on Monday, another losses imposed upon those funds !!!!!!!!!

The only way to stop Fund Managers to hurt us, to prey on retail investors is to impose losses upon them using Government power. Only then the Fund Managers will cool down and try to move the share prices from the level of 1180 to 1300.

Barisan National is planning a general election soon, if the Fund Managers movement cannot be halted, all of us will suffer. We never declare that we support Barisan National, but as we are all sitting on the same boat, we have no other alternatives but to propose useful suggestions that could consolidate the share market prices. We have many talented, sound and experienced local funds. Now if the Government does not make severe mistakes, the share market volatility can be cool down within a week's time.

This is the method HK Government used in battle the market speculators in August 1998. In August 1998, HK Government declared a change of T+5 to T+2 with effect immediately before they rescue the market. We don't have to alter any figure in T+3, simply that our Government does not make severe mistake in pushing up the share prices too early. Malaysia Government MUST act in the same direction with those funds when they are forced to buy up the share prices, and retain the share prices during their attempt to sell down the share prices.

Remember one very important truth : Don't buy up the share prices unless the funds are forced to do short covering.