Koon Yew Yin's Blog
Forced sell is a vicious cycle - Koon Yew Yin
Koon Yew Yin
Publish date: Thu, 18 Nov 2021, 10:00 AM
Koon Yew Yin
0 1,414
An official blog in i3investor to publish sharing by Mr. Koon Yew Yin.
All materials published here are prepared by Mr. Koon Yew Yin
All materials published here are prepared by Mr. Koon Yew Yin
Only Investment Banks can stop forced selling
Since the Budget 2022 announcement on 1 November, practically all the listed stocks have been dropping because the tax increase. The prosperity tax increases from 24% to 33% for profit exceeding Rm 100 million. That means almost all the larger cap companies will report reduced profit next year. All investors especially institutional and foreign investors started to sell when they saw the Budget 2022 announcement. The slump of the big cap stocks is dragging down small cap stocks even though they are not affected by the additional prosperity tax.
As a result, all the investors who used margin finance to buy more shares are forced to sell some of their holdings to meet margin calls. The more they are forced to sell, the more the share prices would drop. Forced sell is a vicious cycle.
Only Investment Banks can stop forced selling
Currently the banks will pressure the borrowers to sell when the margin exceeds 50%. If forced sell continues, many of the borrowers will go bankrupt and the Banks will also lose. Only the banks can stop the forced selling if they are willing to take on addition risk. If the bank only force sell when the margin exceeds 60% instead of 50%. The Chinese has a saying
晴天打伞雨天收伞
More articles on Koon Yew Yin's Blog
Eversendai Corporation made a remarkable comeback in FY2023 - Koon Yew Yin
Created by Koon Yew Yin | Apr 22, 2024
Eversendai Corporation Berhad made a remarkable comeback in FY2023, reporting strong profit growth. Here are the key highlights from their financial performance:
Sendai price trend reversal - Koon Yew Yin
Created by Koon Yew Yin | Apr 22, 2024
Sendai price chart below is showing its price trend reversal. It is hitting a record high.
How can KSL double its profit? - Koon Yew Yin
Created by Koon Yew Yin | Apr 18, 2024
After the stock closed yesterday, KSL announced its 4th quarter EPS which is 40.76 sen and its net tangible asset (NTA) backing of Rm 3.65. Its profit increased by 230% more than last year.
Why Sabah will leave Malaysia - Koon Yew Yin
Created by Koon Yew Yin | Mar 29, 2024
Currently Sabah Government does not know that solar panel produces the cheapest electricity???
Malaysia can be one of the richest nations in the world - Koon Yew Yin
Created by Koon Yew Yin | Mar 23, 2024
During my life time I saw every Prime Minister being replaced by another politician for one reason or another. Dr Mahathir managed to stay the longest time of 22 years.
Property Developers comparison - Koon Yew Yin
Created by Koon Yew Yin | Mar 04, 2024
All property developers have just announced their annual profit for 2023. All of them reported increased profit.
My contribution as an Engineer - Koon Yew Yin
Created by Koon Yew Yin | Mar 04, 2024
Although my writing of this article sounds boastful but I feel that it is important to keep this record for posterity. Engineers play a pivotal role in shaping our modern world.
What can KSL can do to benefit shareholder? - Koon Yew Yin
Created by Koon Yew Yin | Mar 01, 2024
What can KSL do to benefit shareholders? I hope all the shareholders will read this article so that they can attend the coming annual general meeting to vote out those directors who are seeking re...
All Investors require Anticipation - Koon Yew Yin
Created by Koon Yew Yin | Feb 29, 2024
After the stock market closed, KSL announced its 4th quarter ending Dec 2023 EPS of 12.74 sen. The total is 40.76 sen for 4 quarters. Its total EPS for 4 quarter ending 2020 was only 17.8 sen.
Property developers share prices comparison based on latest EPS - Koon Yew Yin
Created by Koon Yew Yin | Feb 29, 2024
KSL is the cheapest in terms of PE ratio. KSL Holdings Bhd is a holding company. It is engaged in real estate services.
Discussions
Be the first to like this. Showing 22 of 22 comments
My suggestion to Grandpa Koon, buy the bank! Or just use your own cash to buy stocks! Using OPM is a risky business especially during bear market like now!
2021-11-19 03:26
Haha, I remember KYY once said he only buy uptrend stocks with margin hence forced selling is blessing in disguise to force him to take profit.
So no need to sell land when he only cut win not cut loss.
2021-11-19 06:17
You have full control if you invest in shares using your spare money. In Cantonese, it says don't wear a hat too big for your head.
When you used your own money, you can have patient to wait for the sunshine after the rain. No need the umbrella.
2021-11-19 09:28
there are terms and conditions, right? If you decide to go all in with other people's money, you have to be responsible too. If everyone follow you and dont let the banks to force-sell, then the whole banking industry will collapsed. What a selfish person..
2021-11-19 10:16
Actually, not all companies 110 companies mentioned are affected.
Some companies have pioneer status on tax while others have tax allowance on capex spending for digitalised their biz.
Besides that, there are many tax incentives in many areas where companies can explore. Some companies may choose also to reduce profitability by taking 2022 as a year on greater investment or capex spending elsewhere.
2021-11-19 12:21
When one knows a croc will not hesitate to snap one's limb off, why step into the margins?
2021-11-19 12:46
Or forced sell is a virtuous cycle of creating chip shares for all to buy n make
esi moni ?
2021-11-19 13:15
In the beginning.
Genesis 1 -
(16) God made two great lights—the greater light to govern the day and the lesser light to govern the night. He also made the stars.
Light was mentioned in numerous verses earlier than verse 16.
The greater light is the Sun and the lesser light is the Moon. He also made the stars in the sky. God created the Sun and Moon, his creations. We don't worship the creations but the Creator.
In the future, when this world is ended with darkness, the light from the Sun is to be discontinued, the Light firstly provided by God ( Verse 1 to Verse 15) will be offered to those deserved Salvation from Him, the Creator of the universe.
The Margin financing is good during the market uptrend...force selling.
2021-11-19 14:59
Force selling is also good during the mkt downtrend bcos it creates valued stocks
FASTER ?
2021-11-19 15:59
Kyy is on the verge of force selling. U guys better run before the force selling begins.
Someone eventually suffers massive losses. It is either u, or him.
2021-11-19 21:24
Now u guys see why he tricked everyone to buy on margin in his recent article.
2021-11-19 21:26
This Geezer is a rogue trader. His modus operandi of telling his followers the share he bought to create a bull run in the stock do not work anymore. Most traders are weary of his dirty tactics telling you to buy while he secretly unload. His KARMA cannot be good.
2021-11-19 23:36
UNCLE KYY
STEEL PRICE CRASHED ALREADY
SEE
https://tradingeconomics.com/commodity/steel
PLEASE DON'T PLAY WITH FIRE GO INTO MARGIN NOW
2021-11-20 13:19
margin call is good , it just telling you, the market trend is working against you. cut loss is wise idea.
2021-11-20 17:47
First he says margin financing is man's best friend and then says force selling is evil....dude they come together! Margin financing is only useful is if use it correctly and force selling is the answer to you abusing it! learn hard!!
2021-11-20 19:47
Post a Comment
Featured Posts
New Update. Discover investment communities that resonate with your ideas
One App To Trade Malaysia & US Stock With 0* Commission
Apps
Top Articles
1
2
RHB Investment Research Reports
4
save malaysia!
6
7
8
#
Stock
Score
Daily Stocks
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
MQ Trading Signals
Stock
Time
Signal
Duration
Stock
Time
Signal
Duration
Featured Advertisers / Partners
Ride The Bull Short The Bear
CS Tan
4.9 / 5.0
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
CharlesT
Old Con kena again....this round no need to sell land..
2021-11-18 13:37