At last Friday’s close, peculiar movements were seen in major big caps such as BATU KAWAN BHD [], BERJAYA SPORTS TOTO BHD [], TDM BHD [] and STAR PUBLICATIONS (M) BHD [], with millions of shares traded in the last 10 minutes of the afternoon session.

Batu Kawan led the limit down decliners by shedding RM5.76 to close at a two-year low of RM13.46. It was followed by TDM, which fell RM1.24 in a single day. Other counters that went limit down were CB INDUSTRIAL PRODUCT HOLDING [] Bhd and HAP SENG PLANTATION []S HOLDINGS [] Bhd.

Even more startlingly, Berjaya Sports Toto closed at an eight-year low of RM3.20, having reached a high of RM4.33 earlier that day.

In contrast, Star Publications closed at an all-time high of RM3.71 per share, or an intraday gain of 85 sen. Another top gainer was JCY International Bhd, which closed at 90 sen after trading between 61 sen and 66 sen for most of the day.

When contacted, a representative of Bursa Malaysia says, “With regards to the eight stocks that hit their limits up (two) and down (six), Bursa Malaysia has investigated the matter and has confirmed with the broker that the basket order, from its institutional client, was valid and genuine. This is not considered an ‘unusual market activity’.” 

All the eight counters are thinly traded stocks.

A limit price is defined as the maximum allowable price that a counter can reach in a single trading day, according to Bursa Malaysia regulations. The limit range for stocks priced below RM1 is 30 sen while those trading at RM1 per share and above have a limit range of 30%. The trading limit range excludes first-day initial public offering (IPO) listings.

It is notable that most of the limit gainers and decliners are considered to be conservative counters with a generous dividend policy, making them an attractive target for major investment funds.

According to an industry source, two major foreign funds were behind the sharp moves in those eight counters. “They are not the result of a system glitch. The funds were in the midst of rebalancing their portfolios, causing them to dispose of major positions.”

The transactions were only executed in the last few minutes of the trading session to ensure that the funds were able to offload or pick up the volume that they wanted. “It is a judgment call made by the funds when they put in the order at the specified prices as they rebalanced their portfolios,” says a broker.

The anomaly on Bursa Malaysia last week came at the end of a trading week when stocks, bonds and commodities had all taken a hammering following comments made by US Federal Reserve chairman Ben Bernanke in the middle of the week. He indicated that the Fed would taper its bond-buying programme later this year and end it sometime next year.

Major equity markets were left reeling last Thursday as a result of Bernanke’s comments, with the UK’s FTSE Index losing 3% of its value. The French and German stock indices shed close to 3% of their values, while Japan’s Nikkei 225 fell 1.75%.

On Friday, however, the Nikkei rebounded but other Asian markets remained in the red. The FBM KLCI shed 0.37% to close at 1,755.85 points.


This article first appeared in The Edge Weekly Malaysia, on June 24, 2013.