In anticipation of the lifting of short selling ban on the 1st of July 2020, we attempt to answer the question – Will the return of short sellers cause markets to falter? Based on study of 62 out of 215 short-able stocks; we think it’s highly unlikely.
For the uninitiated, there are 4 kinds of short selling in Bursa: (i) Intraday Short Selling (IDSS), (ii) Day Trading (DT), (iii) Regulated Short Selling (RSS) and, (iv) Permitted Short Selling (PSS). Most of the short volumes in Bursa are actually dominated by IDSS and DT whereas RSS and PSS only make up a fraction of the short volumes. Hence, our study revolves around IDSS and DT short sellers – the one that matters. Through our findings, there are identifiable patterns that we can observe. More often than not, key findings indicate:
Essentially, the majority of short sellers in our market are (i) technical/momentum-driven and (ii) downtrend bias. Therefore, it is safe to say that short sellers (with exception to RSS) will not short a stock just because stock prices are high or its fundamental valuations (eg. PE or PBV) are overvalued. Safe to say, short sellers would never derail an uptrend trajectory. However, we caution that short sellers could amplify a sell down (through momentum) IF long position holders unwind their position in large volumes (regardless whether the stock is in downtrend or uptrend).
Be aware of these names. In the Bursa’s universe of short-able stocks (as of 29 November 2019), we have identified 7 names which have recorded high short participation rates historically and are currently in a downtrend
(making them a prime target for short sellers). Thus, we believe the lifting of short selling restriction could subsequently cast an additional layer of selling pressure, making any potential share price recovery slightly more difficult. These counters are UMW, BAT, Sapnrg, Airasia, E&O, Armada, and Dayang.
Source: Kenanga Research - 15 Jun 2020
Chart | Stock Name | Last | Change | Volume |
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ARMADA2024-08-27
BAT2024-08-27
CAPITALA2024-08-27
CAPITALA2024-08-27
DAYANG2024-08-27
E&O2024-08-27
E&O2024-08-27
E&O2024-08-26
ARMADA2024-08-26
DAYANG2024-08-26
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DAYANG2024-08-26
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DAYANG2024-08-26
DAYANG2024-08-23
ARMADA2024-08-23
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ARMADA2024-08-23
ARMADA2024-08-23
CAPITALA2024-08-23
CAPITALA2024-08-23
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DAYANG2024-08-23
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DAYANG2024-08-22
ARMADA2024-08-22
CAPITALA2024-08-22
DAYANG2024-08-21
CAPITALA2024-08-20
BAT2024-08-19
ARMADA2024-08-19
ARMADA2024-08-17
DAYANG2024-08-16
ARMADA2024-08-16
ARMADA2024-08-16
DAYANG2024-08-16
DAYANGCreated by kiasutrader | Aug 26, 2024
Why not! use ur imagination! and IB issue CW let the mother share go up to increase subscriber! After fully subscribe then short it kau kau!
2020-06-17 05:44
abang_misai
Haha. E&O a target for short sell. Are you sure share price at 0.40 can be short sold?
2020-06-17 05:37