Trying to Make Sense Bursa Investments
Top Glove: Short Positions and Odd Happenings
For the past several weeks, many odd things have been happening, surrounding the stock of Top Glove. I have mentioned a number of times before the first one of these odd happenings - JP Morgan's rather curious report on the entire glove industry (see here). However, things started getting more and more strange yesterday.
First, Datuk Muhamad Umar Swift, the CEO of Bursa Malaysia Berhad, said at a press conference that the regulated short selling (RSS) limit is 3%. You can watch the video of that
here. However, according to Bursa and SC's official announcement, and according to everyone's knowledge, the limit is 4% (see here). There has been no clarification so far on which one of these two numbers is wrong. Of course the difference is very material, especially in the case of Top Glove, because as of last week, the net short position stood at 2.95% of the company's outstanding stock (see here). Thus, we still don't know if the limit is 3% or 4%.
Even more confusing, last night Bursa released the daily net short position figures, and surprisingly the file did not include Top Glove - the most shorted company on Bursa:
The file has been removed since then, but it has not been replaced with a new file (here). The immediate question that comes to mind is - has the short seller closed their short position? And the only logical answer is - no, because the amount of shares shorted exceeds the daily volume of shares of Top Glove transacted on Bursa on Friday.
Remember that these net short position reports come with a delay of 1 day, i.e. the reports we get on Thursday after midnight show the situation as of Wednesday, for instance. Thus, the report is supposed to show the situation as of last Friday. On that day, although the volume of transactions was indeed higher than the regular volume of transactions we observe on the stock on a regular basis, it was not even near to the total net short position on the stock. The total volume of transactions for the day was 161,623,500. Even if every single one of them was the short seller closing their short position, there would still be an open short position on 80,272,102 shares.
What is going on?
Important disclaimer: Any views expressed are for informational and discussion purposes only. None of this information is intended as, and must not be understood as, a source of advice. It is imperative that you always do your own research and that you make any decisions based on your personal situation and your own personal understanding.
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Discussions
9 people like this. Showing 32 of 32 comments
Huh, that's interesting Ben.
I went to the Bursa page and it's now showing that latest Net Short Position file shows it's for 29 January 2021. Very odd.
And what Umar Swift said is probably a slip of the tongue. It's already been published (assume it's official statements) that the RSS is capped at 4% overall.
2021-02-03 09:58
They still published the short selling trade details for 2 February. No further short of Top Glove occurred.
But definitely curious to know what the net short position is, since without that publication from Bursa, there's no other official way to know.
2021-02-03 09:59
Seek and sikusiku, thank you for your comments.
sikusiku, yes, the data file is missing now, and the official page shows the data for January 29 instead.
2021-02-03 10:03
how rss works..from another forummer
RSS cannot sell to BUY Q, that's Bursa Restriction
meaning rss is just shown in rss column. they cannot directly sell
if no one sell the stocks openly, rss shorties will be stuck
interesting info
2021-02-03 12:01
lkoky, Anthem2, ChickenRoaster, thank you for your comments.
Thank you for pointing out the updated file. It seems like nothing has changed for Top Glove - no shares bought back. Some shares have been bought back for Kossan and Harta on Friday though.
2021-02-03 13:24
shorters will still think that they are the kings...like the hedge funds in the US...until their rugs are pulled off them n they fall spectacularly....
2021-02-03 13:27
The fact is, glove has no substance to be a leading commodity. In the long term(after pandemic), it will be categorised as junk product.
For now, it hit the lottery due to pandemic.
2021-02-03 13:33
PunTatBerSiul, "glove" is not a commodity to begin with, it's a personal protective equipment item. It is categorized as an essential product in the medical industry, and since recently is categorized as such in other industries, including manufacturing, food processing, and travel. It will remain as such for an extended period of time, beyond the COVID pandemic.
2021-02-03 13:39
If there suspicion on the release or integrity of information who do we report to?
2021-02-03 15:08
Obviously someone inside Bursa is working together with IB, duping us retailer that TopGlove no longer being shorted.
2021-02-03 15:10
dusti, Beginner_Newbie, ampangwawasan, thank you for your comments.
dusti, you can email the Securities Commission at aduan@seccom.com.my, or you can call them at 03 6204 8991.
2021-02-03 15:16
Ben, when the correct question is asked, the relevant people will read and usually the “problem” will self correct.
2021-02-03 15:25
hold on to your TG shares if you want to see the shorties bleed. The shorties must be taught not to mess around with a fundamentally sound and extremely profitable company. let the shorties bleed till they cannot see the road home. Otherwise, they will think that we are just pussies and wimps that are easy to push over. Come on guys, just hold and not sell.
2021-02-03 15:35
When the new government takes over all these irregularities will be investigated till the bottom
2021-02-03 17:54
The theory of RSS and shorts are self consoling remark for those glove huggers who bought them way high up. They are crying daily and praying to breakeven.
Facts about TG
1) It dropped from RM 29.xx ( all time high)
2) After bonus issue, dropped to RM10.xx
3) Bonus issue mean nothing to those who bought above RM25, still licking wound.
4) Still struggling to reach bonus issue high (RM10.xx)
Whales are having a gallant time.
They showed their mettle in the beginning of the year by dropping to RM5.20s
Yet "bilis" retailers are congregating and dreams of being whale.
Real whales are "laughing".
2021-02-04 00:17
dusti, magus, Covidcovid, Citadel00, thank you for your comments.
I suggest that everyone just waits patiently. If you are impatient, remember that next month, the quarterly report for Top Glove's 2Q FY21 will be released, with 70% dividend payout attached.
2021-02-04 15:32
@PunTatBerSiul The theory of RSS and shorts are self consoling remark for those glove huggers who bought them way high up. They are crying daily and praying to breakeven.
Facts about TG
1) It dropped from RM 29.xx ( all time high)
2) After bonus issue, dropped to RM10.xx
3) Bonus issue mean nothing to those who bought above RM25, still licking wound.
4) Still struggling to reach bonus issue high (RM10.xx)
Whales are having a gallant time.
They showed their mettle in the beginning of the year by dropping to RM5.20s
Yet "bilis" retailers are congregating and dreams of being whale.
Real whales are "laughing".
>>>>>>>>>>>>>>>>>>
So obvious the whaales miscalculated.........now doing crisis management.........
2021-02-04 21:17
The best is no RSS and no IDSS, short sellers don't get easy money at the expense of the retailers - the real investors. Wait, if investors are lack of confident on the fairness of the trading, winter will come for Bursa.
2021-02-05 08:21
"Yellen seeks to 'understand deeply' GameStop frenzy as market regulators meet" Perhaps Bursa should do something to protect the investors.
2021-02-05 08:51
Investors buy stock besides dividends and all others basically are waiting for the appreciation of the stock price but when stock price rise are deprived by the short sellers. This is not fair as they are parking their capital for a period of time already.
2021-02-05 08:58
Unisem PE 129x
Topglove PE 13x
How come so many funds short Topglove, but no short Unisem?
2021-02-05 10:46
Targeted, henry888, speakup, thank you for your comments.
henry888, in general the institution that observes and takes action when irregularities with the financial markets are spotted, is the Securities Commission. You can contact them at email and phone number provided above if you believe there might be anything that might need to be reported.
speakup, PE is unfortunately not everything. Although I must say that PE beyond 50 very rarely makes any sense.
2021-02-05 20:10
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Seek
Confusing the public? Incompetent people working in bursa or some fishy staff?
2021-02-03 08:56