(From left) Bursa Malaysia CEO Datuk Muhamad Umar Swift, chairman Tan Sri Abdul Wahid Omar and CFO Rosidah Baharom. (Photo by Zahid Izzani/The Edge)

KUALA LUMPUR (Jan 31): The Malaysian stock market remains ‘orderly’ after a severe sell-down of 16 stocks triggered by their shareholders’ inability to meet margin calls, according to Bursa Malaysia Bhd CEO Datuk Muhamad Umar Swift.

Muhamad Umar said the stock exchange operator has done enough in ensuring that the market was operating in an orderly manner during the recent sell-down.

“Volatility is the life of the secondary market, right? The counters involved with some 0.18% of the total market. Yes, we do see the changes. We do track it. We are concerned. But it doesn’t impose a systemic threat,” Muhamad Umar told the press after the group’s financial results media briefing on Wednesday.

Certain small market capitalisation stocks experienced severe sell-downs earlier this month, including a few related to prominent investor Datuk Dr Yu Kuan Chon, prompting several brokerages to tighten their rules for margin financing.

“There will always be what we would like to call animal spirits in the market. That is what makes the market triumph. The key is to make sure the market is orderly, that there is no misconduct, and that is something we take great detail (of) after we work with the Securities Commission on it,” said Muhamad Umar.

Chairman Tan Sri Abdul Wahid Omar also assured that Bursa Malaysia has active surveillance in place to ensure compliance with its Listing Requirements.

“Some of the volumes are very much triggered by the forced sale of the stocks, where some of these stocks, which were pledged with financiers, were not able to meet their margin calls, and that has triggered the downtrend and the high volume.

"The role of an exchange would be to ensure that the market continues to operate in a fair and orderly way, and that remains the case,” said Abdul Wahid.