Van Gogh of Financial

Author: newbie8080   |   Latest post: Tue, 20 Oct 2020, 10:54 PM


Top Glove Investment: Is the EPF trading or investing?- A Misconception

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Top Glove Investment: Is the EPF trading or investing?- Truth 


Reference Article @ 2010: Ang has 20 years’ experience in research and investment. He is currently the chief  investment officer of Phillip Capital Management Sdn Bhd.

Note: https://www.theedgemarkets.com/article/follow-%E2%80%98smart-money%E2%80%99

Purchases by the EPF

The Employees Provident Fund (EPF) is the largest local equity investor in our stock market. It was reported that the EPF accounted for as much as 50% of the total traded volume during certain periods. Since the EPF is a large player, its actions have far-reaching impact on prices of many stocks.


Since most of its investments exceed 5% of the stock’s paid-up capital, the EPF make regular disclosures on their purchases and disposals. Sometimes, investors are puzzled why the EPF trades regularly between buy and sell.


The presumably unclear direction of trades is because the provident fund also appoints external fund managers (EFMs) who have the full discretion to buy or sell. As such, sometimes the EPF could be buying a stock but their EFMs could be selling the same stock on the same day.


In certain cases, one EFM buys but another EFM could be selling at the same time or a few days later. Hence, the disclosure by the EPF is a combination of trades by its internal fund managers as well as that of EFMs.


Due to the difference in opinion between the EPF and its EFMs, there is no clear signal of the direction of this powerful domestic fund. The fund could be big, but they are not “united” and they are in fact competing with each other. This is also a way to generate liquidity in the market. As such, relying on the trades of this “smart money” for direction may not be very reliable.


Even if the fund is buying a particular stock persistently, we observe that the stock price may not seem to rise substantially. This may be linked to the way the orders are placed — that is, they tend to buy lower after a completed trade. This is different from the trading style of foreign fund managers, which we shall discuss later in this article.



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Related Stocks

Chart Stock Name Last Change Volume 
TOPGLOV 8.88 -0.60 (6.33%) 80,935,900 

  Edwin Lee likes this.
wkc5657 These big funds have a range/weighting to maintain. Some are auto balanced, some can be controlled manually. As long as within their weighting range for a particular sector within a certain timeframe, there isn't anything wrong with them trading.

Because of the number of shares they hold, if a quick trade can make them (let's say) 50k in one week, hey, why not? EPF members benefit right? Although no doubt it can go the wrong way also.

Those big overseas hedge/mutaul/quant funds also do that at their local markets....really no big deal. It is just that our market is small, any larger fund movements can cause a stir.
26/09/2020 11:27 AM
speakup EPF should not buy Top Glove as Tan Sri Lim on EPF board.
26/09/2020 3:33 PM
DickyMe CIRCULAR TRADING. Ikan bilis get caught in between.
26/09/2020 5:43 PM
icecool EPF play left hand right hand like a magician
26/09/2020 6:03 PM
williamh Very unprofessional buyung AT sucik a high price,while MOSTI of the glove stock had climbed a Feedback 100 time and seen startung to ho south
26/09/2020 9:07 PM
Foker Yeah, that is the reason to vote for another government
26/09/2020 9:16 PM
Foker Even EPF dunno what are they doing with it
26/09/2020 9:17 PM
Foker Use public money to trade stocks
26/09/2020 9:17 PM
Foker Need more people to complain about this
26/09/2020 9:17 PM
PureBULL ... 20+ yrs ago EPF outsourced abt rm$30 billion to 20 external fund managers.
most of these r mon.k.ey fun managers. they micro trade KLCI component stocks every week for small gains n thus killing msian stock mkt. being in unfertile ground, the FF became nett sellers for years edi.
back then EPF edi paying abt rm$25 million a year as huge commission to brokerages due to the acts of these mon.k.eys!

amongst them only the good ones bought into TOPGLOV.
That oso they trade like crazzzy, as shown recently with stake
held in bracket by EPF( money fun )
this time EPF inhouse manager is buying TOPGLOV big time as reported.
ts Dr Lim is a board member of EPF, surprised right !

KLCI has lost 3 decades.
Jakarta CI went up 660% at today's weak price from its highest pt of 742 in 1997. in the same time period, KLCI struggled a mere up 18% in 23 yrs from 1278 pt in 1997. INDONS r so RICH!
If EPF decides 1 day to withdraw those $30 Billion funds, a multi years super bull run on KLSE is a guarantee !

down.trend stocks r never too low to short
high growth stocks r never too high to buy
ex like warren B's BRK.A from usd$50 to $313,000 a share today.
TG, a perpetual growing plc is the only stock to follow BRK.A
27/09/2020 5:59 AM
Morpheus61 Purebull, well said. Facts on the table
27/09/2020 7:13 AM

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