SBB = dividend shares 1 treasury share for every 45 shares held, if we judge from the last 2 quarters.

"tgahchai they dun tink of cut loss? still die die pay interest everyday to epf?"

My belief is that they are waiting for something. Likely they are trying to procure the necessary amount of shares for them to launch one last attack on the share price before closing their short position.

According to my calculations, the short seller bought back about 10.95 million shares on Monday and Tuesday. I believe they are using these shares in their shorting exercise over the last 3 days. They used up 2 million shares on Wednesday, and 3.1 million on Thursday. They have already used more than 3 million today, so they are left with approximately 2.85 million more from this batch.

Unless they find someone who could lend them more shares (the belief is that they haven't been able to find anyone to do that recently), they might be in a major trouble.

BTW something funny:

https://klse.i3investor.com/blogs/bursainvestments/2021-01-22-story-h1540099215-Gloves_and_the_United_States_Something_Funny.jsp

ahpooki2, they've already opened the short positions at very low market prices, so they have no choice but to try and suppress the prices. Otherwise the loss will become even bigger.

"DarenWai Ben Tan. This means they are losing right since the price still going up?
Anyway, i thought a better strategy is wait for not much buyer then only short. Thanks"

Yes, the short seller is currently in a massive losing position, to the tune of RM200 million as of right now.

DarenWai, the shorting happens at very strategic times. It happens when big buy queues are created in order to curb the upward momentum. This has been happening consistently over the past 3 weeks.

Water Fish Burger (水鱼哥哥）, the daily figures on shorting are released around 8pm on the same day here: https://www.bursamalaysia.com/market_information/market_statistic/securities

Shorting up to now for the day:

Top Glove: 2,263,100 shares shorted (8% of total volume for the day)
Harta: 167,100 shares shorted (4.5% of total volume for the day)
Kossan and Supermax: 0

goldenluck16, tylee81, CJkenho, thank you once again for your comments.

tylee81 and CJkenho, my opinion is that like us, the local IBs are currently in a waiting position. They are waiting to see what the short seller is going to do next. On January 4, when the short seller unloaded the largest amount of sales, the prices plummeted. If such a thing happens again, that would be an incredible buy opportunity. Everyone likely has their guns loaded for when/if that happens.

This is the actual presentation:
https://www.topglove.com/App_ClientFile/7ff8cb3f-fbf6-42e7-81da-6db6a0ab2ef4/Assets/IR%20Presentation/TG%20Website_English_190121.pdf

SteadyT, basically these are rock bottom market valuations right now. As I've said elsewhere, the price can pretty much only go upwards from here. However, if it will happen tomorrow, next week, or next month, might be a bit harder to say.

What is certain is that the short selling pressure should be over by the beginning of February at which point the bigger part of the short position will have to be closed, which of itself will result in the prices going up.

bullpiano, I replied to your comment here:
https://klse.i3investor.com/blogs/bursainvestments/2021-01-16-story-h1539380474-Is_the_Big_Gloves_Short_Over.jsp

The small figures for Jan 4th, 5th, 7th, 8th, and most likely 14th, are not related to the big short. They are probably retail positions or other type of positions. As mentioned in the article, probably about RM3 million in value does not belong to the big short position, but to other small/retail short positions. However, yes, there has been some closing of short positions. The following are the amounts for each of the 4 counters:

19 January - 5,955,218 TG shares bought back
19 January - 1,000,000 Kossan shares bought back

18 January - 5,000,000 TG shares bought back
18 January - 3,000,000 Kossan shares bought back

15 January - 1,770,145 Kossan shares bought back

11 January - 3,680,900 TG shares bought back

No closing of short positions on Supermax or Harta has been observed so far.

tylee81, if the short seller has to pay the dividend to the borrower of shares, that's pure loss. Currently they sit on massive paper losses, but these are still just paper losses.

bullpiano, the small figures for Jan 4th, 5th, 7th, 8th, and most likely 14th, are not related to the big short. They are probably retail positions or other type of positions. As mentioned in the article, probably about RM3 million in value does not belong to the big short position, but to other small/retail short positions. However, yes, there has been some closing of short positions. The following are the amounts for each of the 4 counters:

19 January - 5,955,218 TG shares bought back
19 January - 1,000,000 Kossan shares bought back

18 January - 5,000,000 TG shares bought back
18 January - 3,000,000 Kossan shares bought back

15 January - 1,770,145 Kossan shares bought back

11 January - 3,680,900 TG shares bought back

No closing of short positions on Supermax or Harta has been observed so far.

Anthem2, the announcement say that the acquisitions are via "TS Dr Lim WC (L) Foundation", so I assume it's a sort of a foundation set up by LWC to reward the founders of the company. It's a really small amount (0.00001% of the company stock), so it's truly immaterial.

DickyMe, thank you for letting me know. This information is truly immaterial to the earnings potential of any of the big glove manufacturers.

lkoky, if the figures show net buying, this may still mean that some of the older short positions have been closed - as has been the case with Kossan last Friday, and this week on Monday and Tuesday so far (we have no up-to-date data for Wednesday).

SteadyT, tylee81, Anthem2, thank you once again very much for your comments.

SteadyT, yes, that might be one of the reasons for why the attack on Supermax is not as massive. However, I believe the more important reason is that institutional investors don't have as large positions in Supermax's stock, as they do on TG, Harta, or Kossan. EPF and KWAP are not among the top 25 shareholders of Supermax, and the 25th (RHB) holds only 0.28% of the stock.

tylee81, I think the short seller will close their position long before the release of TG's quarterly results in March.

Anthem2, certainly right now would've been the best period for such a short attack. The only thing that disrupted the plans was MCO2.0

SteadyT, the short seller will receive dividend only if they buy back the shares before the ex-date. That is exactly what I meant above - they have to buy back the shares before the ex-date.

SteadyT, yes, if the short seller doesn't return the shares to the original lender before the dividend ex-date, the short seller will have to cover the sum paid as dividend on those shares.

yong99 and tylee81, thank you for your comments.

tylee81, there are currently certain suspicions circulating around that this is a classic "short and distort" campaign. The bad publicity on Top Glove in particular has certainly been way overblown and excessive, much beyond what would have normally been expected. Thus, it is really hard to predict anything right now.

"MrGlover @Ben Tan Are they starting to close their position because they are running out of runway soon?
You mentioned shorting with shares they bought yesterday, does it mean no one is interested to loan them more shares currently?"

I think right now the short seller is in a waiting position. They likely do not have any bullets left on TG and Supermax, so they are currently using the 5,000,000 shares they bought back on Monday (and potentially some shares they might have bought back yesterday) to curb the upward momentum that occurred this morning.

They are most likely waiting for some additional share borrowing deal, but it is possible that they might not have been able to procure such shares yet. This is entirely and only my speculations though. However, there is not really any other logical explanation as to what they are waiting for right now.

"Sunshine123 Ben Tan ... I'm still very blur on how shorting works. Googled for info, but still cannot get a clear idea. In very simple terms, how does it work?"

I give a simple explanation on that here: https://klse.i3investor.com/blogs/bursainvestments/2021-01-09-story-h1539233535-Gloves_The_Bad_Guy_Loses_From_Time_to_Time.jsp

"Stockisnotfun Today got rss volume. Even IB play smarter than you. Still on news."

The IB is trying to dull down the upward momentum. They are likely currently using the bought back shares on TG from Monday to short them again.

Here is how the actual calculation works:
https://imgur.com/G2mFjZh

The only problem is that Bursa's data lags by one day. So when they release the Net Short Position data on Tuesday at midnight, that's actually the correct data as of Monday. So for example today we don't know exactly what has happened yesterday, but we do know that on Monday there has been buying back of shares of Top Glove and Kossan.

SteadyT, see my explanation on how it is calculated in the "Update: January 10, 2021" section here:
https://klse.i3investor.com/blogs/bursainvestments/2021-01-09-story-h1539233535-Gloves_The_Bad_Guy_Loses_From_Time_to_Time.jsp

The short seller has started closing their short position on Monday!

5,000,000 shares of Top Glove have been bought back
3,000,000 shares of Kossan have also been bought back

tylee81, unfortunately there is no way to say. However, it is almost 100% certain that they cannot hold until after the dividend ex-date for the next quarter of any of the companies. The announcements for Supermax and Hartalega are coming very soon, so the short closing will likely happen within this month.

SteadyT, if there is one thing that is special about Kossan, it is that it is the only stock in which the short position is not losing too much. They are trying to keep the price within a range around RM4.20, and they are apparently buying back the shares slowly. For instance, on Friday 1,770,145 shares have been bought back, i.e. about 3.25% of the short position (as of that time) has been closed.

This is the ideal scenario for the short seller - slowly suppressing the price by continuously selling short in order to curb any upward momentum, while at the same time slowly buying back on downtrends.

SteadyT, not any way that I know of. The only thing we know for sure is that on Monday (January 4), it was "foreign" participants on Bursa who initiated the biggest short sale:
https://klse.i3investor.com/files/my/blog/img/bl6707_capture_4.jpg

tylee81 and Cescmy, thank you for your comments.

Let's just sit tight and observe.

For those who have not received their dividend yet, specifically on Rakuten - I just had a call with them. They are currently processing the dividend payouts. Some accounts would have already received it, but others would need to wait a bit more. They estimate that the dividends will be credited into the accounts by the end of this week.

wbwanabe, thank you, I hope it has benefited at least someone!

SteadyT, thank you for your comment.

It is hard to say if the spike in the share price of the glove counters was caused only by the MCO rumors or by something else. Certainly the rumors, which started around that week's Thursday, were a major catalyst though. It is possible that there might have been some fund outflow from bank stock into glove stock because of that reason.

"AlvinTSK TG had paid all dividends to the registered share puchased, If anyone did not receive it is either they bought after the ex date or their account doesnt register the share on time ~~"

That's actually not true. Rakuten haven't banked in the dividend in the Rakuten accounts yet. Recently they have been very slow with that - it takes about 2 weeks.

wpwanabe, EPF is most certainly the biggest beneficiary from the entire exercise, because they are both able to pick up more shares at a lower price, and at the same time they receive a fee from the short seller for lending out their shares. Additionally, they may know better than anyone (other than the short seller) when exactly the short position is going to be closed, thus timing their actions in the best possible manner. It is precisely because the prospects for the glove counters are stellar that EPF has agreed to participate in this exercise.

I am following all of the public announcements, and trade volumes, including short selling volumes.

No shorting on Top Glove, Harta, and Supermax today, but Kossan has been a major fight. This is the only stock on which the short seller is not in a massive paper loss position.

For the morning session 1,024,700 shares have been short sold on Kossan. This is 22.28% of all transactions on the counter for the day so far!

wbwanabe, that is indeed the case. However, I suspect the closing will happen quite a bit earlier than that.

wbwanabe, thank you for your comment.

Unfortunately we do not know what EPF's activity over the last two weeks has been. They may have been buying shares, but they may have also been selling shares. As they stay under the 5% limit, they are not required to announce any trades they make on the stock.

Usually a margin call on shorted stock (i.e. the lender asking the borrower to return the borrowed shares) would occur if the share price rises above a certain level. So it is possible that if the price rises suddenly, EPF could make such a margin call. However, at present this is unlikely due to the bad press the glove industry has been getting over the past few weeks.

PeterPan1979, while EPF doesn't hold the rights over the shares, the short seller who has borrowed the shares would have to reimburse EPF for any dividends that have been paid during the period in which the short seller has been holding the shares. Thus, it is HIGHLY unlikely that the short seller will wait until the dividend ex-date for any of the 4 glove companies. Note that Hartalega and Supermax are supposed to announce their quarterly reports either next week, or in the first half of February.

PeterPan1979, it is an interesting question, because it is related to who holds the rights over the shares. In a nutshell it works like this:

- EPF lends the shares to someone for short selling. The holder of the rights is still EPF at this point.

- The short seller sells the shares, thus opening a short position. At this point the holder of the rights is whoever has bought the shares from the short seller. In other words, EPF ceases to be a holder of the rights over the shares at this point.

Thus, EPF need to declare this as a disposal of shares, but they need to specify that it was done via the SBL facility (if it was done via that facility).

PeterPan1979, thank you for your comment.

The average short price is simply the result of dividing the total value of the transactions by the total amount of shorted shares.

EPF is required to issue announcements of any shares they acquire/dispose of if they are a substantial shareholder. The last announcement they made was on Jan 8th when they ceased to be a substantial shareholder of Top Glove because they had lent 40 million shares to someone via the SBL facility. When such announcements are made, supposedly EPF should specify that the shares were "disposed of" as a result of "SBL". You can refer to the announcement here: https://www.bursamalaysia.com/market_information/announcements/company_announcement/announcement_details?ann_id=3119810

No shorting on Top Glove, Hartalega, and Supermax this morning. The only shorting activity is on Kossan - the only counter where the short seller still might have a chance to break even. Is the "big gloves short over"?

https://klse.i3investor.com/blogs/bursainvestments/2021-01-16-story-h1539380474-Is_the_Big_Gloves_Short_Over.jsp

ks5S, Icon8888, 99newbie, kongkakiao, thank you for your comments.

ks5S, unfortunately this is to be expected. The vaccine doesn't give 100% immunity. In fact, it likely gives immunity to a relatively low extent, but it hopefully causes any symptoms displayed by a person getting the virus after being vaccinated to be only very mild.

kongkakiao, yes, this is the only strategy that would allow the short seller to potentially not experience too huge losses. However, even if they manage to execute that, the price will quickly rise back up when they start buying back the shares solely because of the sheer volumes that would need to be bought back.

LaoTzeAhSir and chtan33, thank you for your comments.

chtan33, I think at this point it is truly unlikely that the short seller(s) will break even from the entire exercise. However, they could try one last attack in order to minimize their losses. A large-scale sale on Monday morning, for instance, could swing the price downwards potentially for long enough for the short seller to be able to take advantage of the panic. They would still report losses, but the losses will be lower than they are right now.

Orlando, ming, and lkoky, thank you for your comments.

ming, I am not following your thought. Are you saying that this is a sum-zero game? This will be the first case in the history of an institutional investor wanting to lock in the market price within a certain range by spending an enormous amount of money on short selling against a long position they already have.

Peter5151 "once the short position is open, does the short seller need to close the position within certain timeline ?"

When it comes to regulated short selling, and when it's an arrangement between two institutions (as is the case here), there doesn't seem to be any specified time limit in Bursa's rules and regulations. However, the borrower of shares normally pays for every day they hold the rights over the borrowed shares, so the time-value is against the short seller in such transactions always.

AXE666, cpchuan, nobullshit_investor, sagaraken, Anthem2, LimitUp, treasurehunt, thank you for your comments.

AXE666, the confirmed impact (i.e. without the share price moving, and without them doing anything), they will keep incurring losses as they would have to pay ongoing fees to the shares lender. Thus, time is not unlimited in their position, and delay is very expensive.

cpchuan, unfortunately I don't think this applies in this situation. This is an arrangement between major institutions. We know that at least one of the lenders of shares is EPF because of their official announcement of lending out shares multiple times via the SBL facility. At such volumes and when it involves two institutional counterparties, a margin call is unlikely to come through, unless the price really jumps by a lot.

nobullshit_investor, the similarity in support price and the average shorting price is no coincidence. The short seller(s) did most of their work on Jan 4th when the price dropped the most. The price for TG, for instance, hasn't broken 6.88 predominantly because of the ongoing short selling pressure.

sagaraken, yes, one major factor we don't have visibility on is how many more shares the short seller has borrowed. Regarding fundamentals, as I've mentioned elsewhere the current market valuations make little sense. Time is in favor of the current long holders of the glove stock, and against those positioned short.

Anthem2, I was also surprised to see TG being singled out again for reporting positive cases in its factories. With 4,000 cases daily, many of which coming from labor intensive industries (i.e. manufacturing), and Top Glove having a total workforce of 21,000 it is really hard to see how 0 cases could be reported on an ongoing basis. I actually think it's job well done on TG's part to proactively report on the discovered positive cases.

LimitUp, I can see how such stories are getting spun out of proportion, which hopefully is done without malicious motives. This round of bad press may have some short-term effect, but I believe it will be rather negligible.

treasurehunt, the only thing we can be certain about is that the big short from Jan 4th was done by a foreign institution. The daily reports on segmentation of inflow and outflow of funds thereafter are rather inconclusive. For example, on a number of days local institutions were net sellers on Bursa, whereas foreign institutions were net buyers. The volumes of short selling for the rest of the days were just not meaningful enough to give us a clear picture.

gemfinder, as I can see you are trying very hard, let me give you a piece of advice. If you want to achieve a better return on your time spewing bad news, it's best if you do it via different accounts. Now that everyone knows that you are doing it on purpose, it loses its value and the effect is negated. There are a handful of other accounts in the forum that do the same thing and they are already known. Hence, when you do it (spewing bad news), it has the opposite effect of what you are trying to achieve.

BALANCE_VIEW, kewaljit, pfsurewin, Vairocana9999, EasyM88, Goldberg, thank you for your comments.

kewaljit, yes, it is possible that they are waiting for negative news for gloves, although it seems like at this point most of the very negative news are baked into the price. Without the ongoing shorting for the past 2 weeks, the share prices of the 4 companies were likely going to be 50 to 100 sen higher than they are. In the meantime, any fees payable to the shares lender are still rolling.

Vairocana9999, I agree. I think the best way the companies, especially the ones that are currently in a very robust net cash position, could play it if the short selling continues, would be to embark on a slow SBB exercise.

ming, Vc Looi, lkoky, goldenluck16, PZOGRO, thank you for your comments.

ming, please read my previous article on the topic to which I've linked in this post. RSS is not for hedging purposes only.

PZOGRO, I haven't seen any official announcement for that up to now.

Stockisnotfun "People already get used to increasing covid cases. We are not that panic like last year. People won't panic buy gloves one."

This is actually a major issue. This means that the containment won't be as quick and as effective as it was in March-April, because compliance is key. If the general attitude doesn't change, we are in for a long MCO.

If you are interested on where the short position for the 4 glove counters stands, this is my analysis of the situation:
https://klse.i3investor.com/blogs/bursainvestments/2021-01-16-story-h1539380474-Is_the_Big_Gloves_Short_Over.jsp

Viewed another way - the total market capitalization of the 4 companies, approximately RM120 billion, represents a little less than 7% of the total market capitalization of Bursa Malaysia, but they attracted 91% of the value of the short sales.