Posted by treasurehunt > 2021-01-09 13:44 | Report Abuse

Gloves sector is on recovery play after being downplaying for 3 months.

Posted by FutureGains > 2021-01-09 14:20 | Report Abuse

U must think outside the box.
what u can see the short position is not a REAL..

Posted by FutureGains > 2021-01-09 14:20 | Report Abuse

they could have buy back and sell 10% higher later

Posted by Morpheus61 > 2021-01-09 14:22 | Report Abuse

Posted by FutureGains > Jan 9, 2021 2:20 PM | Report Abuse

U must think outside the box.
what u can see the short position is not a REAL..
________________________________________________________

Haha. That is data provided by Bursa. You mean to say what Bursa is telling us is not REAL or TRUE ?

Posted by BuLLRam > 2021-01-09 14:31 | Report Abuse

Recovery play...a recovering economy play..sectors like financials, consumer related , travel, etc....???
.

Posted by cutie > 2021-01-09 14:40 | Report Abuse

I bought Harta a few daysago and when I click on the seller info, JP appears. Very obvious it is JP. Is the short seller

Posted by Goldberg > 2021-01-09 14:53 | Report Abuse

Correct @treasurehunt, GLOVES are on an upward trajectory after being being pressed shamelessly /manipulatively by IBs. to cover their asses. ie call warrants. As mentioned by Morhpeus time and time again.
------------------------------------------------------

treasurehunt Gloves sector is on recovery play after being downplaying for 3 months.
09/01/2021 1:44 PM

Posted by Ben Tan > 2021-01-09 15:15 | Report Abuse

Wow! I chose a bad moment to go for lunch apparently.

Thank you everyone for your comments and for this great discussion. I just want to request that we keep it civil. We all want to know the truth and different factors point at different directions.

For instance, while the initial short position was opened by a foreign institution, later on during the week, local institutions were net sellers on Bursa, so it might have been a "joint exercise". We will likely never know.

What we know is the publicly available data, which points (at least for now) towards an unpleasant scenario for the short seller(s). However, let's not forget that they still have a significant amount of space to open a yet larger short position on each of the 4 stocks, which would result in further volatility in order to try and cover their existing short position at lower net loss. The most important thing is to think rationally in times like this, with as little emotion as possible.

Posted by koolset > 2021-01-09 15:18 | Report Abuse

Love what you wrote. Do keep writing more, I would love to read more of what you have in mind.

Posted by Ben Tan > 2021-01-09 15:26 | Report Abuse

koolset, thank you. I enjoy your articles, too!

Posted by pjseow > 2021-01-09 16:05 | Report Abuse

Thanks for the great article . I bought both Topgloves and Supermx on Tuesday and Wedneday seeing the great opportunity to buy at super low prices for stocks which have super growth rate , super.cash flow , super margin , super.ROE and super low forward PE .As for Topglove super high dividend yield of 15 %. It was a big mistake for the institutions to short such good stocks with great fundamentals and higher earnings for the next few qtrs

Posted by sosfinance > 2021-01-09 16:28 | Report Abuse

we can only speculate or deduce, but we will never know the truth behind. Commonly in a RSS, the lender or the borrower, do not do it for a short period of time, i.e., one week or one month, it is for a period of more than 1 month, 3 months, 6 months or more. From another angle, players can also churn RSS. Sell, buyback (closed position), sell again, buyback again (closed position again) on the same day. Lender can call back the share anytime (in RSS). This is a risk borrower cannot avoid.

Posted by bpsiah > 2021-01-09 16:58 | Report Abuse

Good write up Ben Tan. As you mentioned Shorties still have much space to do ss. So it looks like there will be more volatility ahead. BTW anyone knows how many trading days short positions can remain open and must be closed?

Posted by williamtkb > 2021-01-09 17:17 | Report Abuse

Big funds RSS to press down price for them to collect low. They had been collected few days and pushing up higher and higher. I don't think they are on losses next week.

Posted by Orlando > 2021-01-09 17:31 | Report Abuse

Great info

Do u know d costs involved ie how much is borrowing cost etc



Posted by sosfinance > Jan 9, 2021 4:28 PM | Report Abuse 

we can only speculate or deduce, but we will never know the truth behind. Commonly in a RSS, the lender or the borrower, do not do it for a short period of time, i.e., one week or one month, it is for a period of more than 1 month, 3 months, 6 months or more. From another angle, players can also churn RSS. Sell, buyback (closed position), sell again, buyback again (closed position again) on the same day. Lender can call back the share anytime (in RSS). This is a risk borrower cannot avoid.

Posted by Orlando > 2021-01-09 17:40 | Report Abuse

I m thinking while stil hv TopGlove in hand EPF lent to SS to RSS won't tis makes its TopGlove holdings to lose value?

Return from lending is bigger thn drop in value?

Posted by Orlando > 2021-01-09 17:42 | Report Abuse

Lately EPF itself has been selling too not long only

Posted by Ben Tan > 2021-01-09 18:11 | Report Abuse

pjseow, sosfinance, bpsiah, williamtkb, Orlando, thank you for your comments!

sosfinance, precisely. That is why above in the comments I mentioned that we can only analyse the publicly available data and nothing more. This is an over-the-counter deal, so we cannot know:

- Who the short seller is;
- Who the short seller borrowed the shares from (except for the 40 million shares borrowed from EPF);
- How much the short seller pays for borrowing the shares;
- How long the short seller can hold the shares;
- Any other parameters of the arrangement;
- Any future plans of this or any other short seller.

(This is relevant to bpsiah's and to Orlando's questions as well.)

However, fortunately the publicly available information gives us some important pieces of data, such as the daily RSS volumes, and the net short positions still open. This is sufficient for our main purposes, and we can derive from it directly or indirectly information on:

- What percentage of the short positions have been closed up to now;
- How close the currently open short positions are to hitting the limit;
- What paper losses might exist for the short seller, excluding any unknown fees (not part of the article, but mentioned by treasurehunt above in the comments section).

We can also extrapolate one more piece of information. As the Kossan short sale position has been closed to a much larger extent than the ones on the other 3 glove counters, this may signify that the short seller's plan has indeed been to close the position relatively quickly - potentially within these 2 weeks since the beginning of the year. I have no doubt that this is what would have happened with all of the counters should the MCO-related news not have arrived at this time.

Posted by roadtomillionaires > 2021-01-09 21:03 | Report Abuse

Hi Ben, very well written and detailed explanation. Keep it up the good work.

I guess we might be able to see another ATH or in other word well deserved valuation, taking into account all the circumstances above.

Posted by Ben Tan > 2021-01-09 21:50 | Report Abuse

roadtomillionaires, thank you for your comment.

I think it might be a bit too early to predict on that. The rally at the end of this week was mostly provoked by the news for a new round of tighter movement restrictions. However, as with many other overreactions on Bursa - this piece of news actually has no material value as far as the glove companies are concerned in isolation from any other factors. The big glove companies have no significant business in Malaysia, and only a minuscule part of their revenue is derived from the country. The only way this piece of news impacts the glove companies is via ringgit's exchange rate movement, and even then to a very small extend.

However, the more important thing - the length of the COVID crisis, and therefore the length of the extraordinary earnings the glove companies are expected to record over the next few quarters, hasn't been understood by the broader market and hasn't been factored in the recent rally. Additionally, most people haven't realized that there is a fundamental shift in the hygiene perception around the world, which runs through a broad range of industries and is here to stay. My personal expectation is that if anything near a ceiling is to be reached, that would happen at some point around the third quarter of this calendar year.

Posted by super_newbie > 2021-01-09 23:41 | Report Abuse

Another excellent write up by Ben! I wonder if the short participants dare to extend their shorts till 4% on RSS aggregated net short position. If yes, what will happen if cancellation of 178,361,800 treasury shares by Top Glove? Over 4% and short squeezing triggered? Ermm...

Posted by sagaraken > 2021-01-09 23:52 | Report Abuse

Just a question, if short sellers havent close their positions, wouldnt it just mean that they will try and push it down next week?

thanks for the well written article Ben.

Posted by seanyap1 > 2021-01-10 00:01 | Report Abuse

Super_newbie,

Can’t cancel shares, as it will technically move TSLWC’s stake above 33% as well, trgigering a mandatory GO

Posted by seanyap1 > 2021-01-10 00:06 | Report Abuse

Ben,

Note that supermax amongst the four are least shorted as well, think part of the reason why that may be could be the free float are tighter and EPF isn’t a direct shareholder hence shorties aren’t able to source for shares to borrow. In conclusion, the volatility that we saw, could be down to EPF’s holdings held in custodian accounts which. As lend out to shorties.

Do please also research and talk about ‘cum-ex dividend stripping’ by short sellers. Now given that top glove shares goes ex on the 11th, are short sellers returning the shares to EPF cum or ex dividends? All of us as EPF contributors or have monies in EPF should know the processes behind this

Posted by Michael Teng > 2021-01-10 00:56 | Report Abuse

Another excellent articles. Well done, guys

Posted by Sales > 2021-01-10 10:03 | Report Abuse

One of the best write up. Thank you and hope to have more write up in the future. God bless you.

Posted by invest200 > 2021-01-10 12:18 | Report Abuse

Ben, thank you for the effort to share this piece of valuable information and analysis. I am also tracking the PSS and RSS data since early December. From my understanding, the date printed on the net short position from bursa should be for a day earlier closing. For example, the latest net short data from bursa stated for 8/jan/2021 was actually for the closing of 7/jan/2021. However the date for total short selling for the day is correct. If you do the net short position date adjustment, you will find that the short seller/s hardly cover any of their position(for all Big4) from Monday to Thursday. We will need to wait for next Monday bursa’s data to see the short position for last Friday. If it still show no cover of short position, the short sellers are in greater risk. A point to note, there were a few days (21 and 22 December) that the short position didn’t change, but all changes were appeared on the 23 December(the changes were more than the total trade volume for the Big4 on 23 December), this could be due to either bursa ‘lazy’ to update or the shorties didn’t update bursa properly. This will confuse the market.

Posted by jian90 > 2021-01-10 12:43 | Report Abuse

I was just thinking if the intention of the short seller was to press down the price so that they can collect more shares at a lower price where for example they shorted a certain amount of shares but when the price went lower, they bought back 2 or 3 times more of the number of shares they shorted so that not only they already bought back enough shares to return to the lender but also made a handsome profit from the additional shares that they bought at a lower price after they pressed down the price?

Posted by VenFx > 2021-01-10 12:44 | Report Abuse

Mind blogging article
Big like to Ben

Posted by VenFx > 2021-01-10 12:47 | Report Abuse

Sometimes it market just act illogically.
Still remember there was 1 glove put call warrant during time of glove super bullish ?

However, things must get to back to it's where it shud be after the craziness.
That's all I can say.

Posted by VenFx > 2021-01-10 12:49 | Report Abuse

Force must be use it right
Else it can bring damages or disaster in the short term.

If the forces are to navigate on par with the broader market, next question is
Will there be any fat meat left ?

Posted by treasurehunt > 2021-01-10 12:54 | Report Abuse

Agreed. Bursa is slightly lagging to update the data in Net Short Position. I also can’t tally the figures RSS daily report for Harta and Supermax for last week. The difference is small and less than 10% of Net short positions.

Posted by invest200 > Jan 10, 2021 12:18 PM | Report Abuse

Ben, thank you for the effort to share this piece of valuable information and analysis. I am also tracking the PSS and RSS data since early December. From my understanding, the date printed on the net short position from bursa should be for a day earlier closing. For example, the latest net short data from bursa stated for 8/jan/2021 was actually for the closing of 7/jan/2021. However the date for total short selling for the day is correct. If you do the net short position date adjustment, you will find that the short seller/s hardly cover any of their position(for all Big4) from Monday to Thursday. We will need to wait for next Monday bursa’s data to see the short position for last Friday. If it still show no cover of short position, the short sellers are in greater risk. A point to note, there were a few days (21 and 22 December) that the short position didn’t change, but all changes were appeared on the 23 December(the changes were more than the total trade volume for the Big4 on 23 December), this could be due to either bursa ‘lazy’ to update or the shorties didn’t update bursa properly. This will confuse the market.

Posted by treasurehunt > 2021-01-10 12:59 | Report Abuse

Big volume on Friday. Possible of Shorties cut loss. I doubt Bursa update Net short position in an exact timely manner.

Posted by treasurehunt > 2021-01-10 13:12 | Report Abuse

Friday, Foreigner is the big net buyer worth 435 million.

Posted by invest200 > 2021-01-10 14:20 | Report Abuse

Bursa's Net Short Position as at 8/1/2021 is for the closing of 7/1/2021. Then the actual net short position is very tally with the RSS from last Monday to Thursday. We need bursa to update Net Short Position as at 11/1/2021(Monday) to know the actual net short at 8/1/2021. The whole of last week data showed that shorties did not cover their short position, or very negligible even they did as there might be some small balance amount from PSS. There might be some panic short cover on last Friday but we will need next report from bursa on the coming Monday.

Posted by invest200 > 2021-01-10 14:25 | Report Abuse

Clarification, I meant from last monday to thursday, the short seller did not cover their short position.

Posted by ming > 2021-01-10 15:31 | Report Abuse

Mayb they will continue short..

Those with profit (bought on last week), drop sikit will take profit liao

Those with loss (bought in 2020), no much bullet left..


They still can control the price.

Posted by Ben Tan > 2021-01-10 15:44 | Report Abuse

super_newbie, sagaraken, seanyap1, Michael Teng, Sales, invest200, jian90, VenFx, treasurehunt, ming, thank you very much for your comments and for your incredible input!

First, please note that I updated the article to reflect the concerns expressed by invest200 and treasurehunt. The net short position reporting indeed lags 1 day behind, so we will know the exact amount of any short positions that might have been closed on Monday evening (usually after midnight).

sagaraken, that might be the case. However, the net short position for this past week is equivalent to RM1.5 billion in value. It is hard to imagine that a player could offload more of this amount of cash in order to try and again press the price down. This amount alone represents almost 0.5% of the gross domestic product of Malaysia!

seanyap1, thank you for pointing that out. Indeed that might be the case. The short seller needs to be able to secure huge amounts of shares per batch, so it might not be as easy for them to do that for Supermax shares as it might be for the other 3 companies. In particular, neither EPF nor KWAP are substantial shareholders of Supermax.

jian90, if it is an unscrupulous attempt for a sort of transfer of shares from one player to another, it has become an extremely expensive one. We can only guess as to if that might be the case.

Posted by Orlando > 2021-01-10 17:04 | Report Abuse

Best case scenario

Hot money coming in in 2021

Hot money wanted to buy cheap

Hot money shorted Mon to Thu

Hot money short covered n more on Fri

Hot money now waiting for big gain

Posted by Michael Teng > 2021-01-10 18:46 | Report Abuse

Ben Tan, Treasurehunt and Invest200, you guys do have an eye for details. I was equally puzzled and the data are indeed lagging by a day . Good jobs !

Posted by Ben Tan > 2021-01-10 20:54 | Report Abuse

Orlando and Michael Teng, thank you once again. Let's now patiently wait and observe the show on Monday.

Posted by oohlala > 2021-01-10 21:41 | Report Abuse

Good analysis! Thank you Ben for the sharing.

Posted by sagaraken > 2021-01-10 21:58 | Report Abuse

thanks for replying Ben, good article and thanks for sharing! Appreciated.

Posted by LCLY > 2021-01-10 22:01 | Report Abuse

Thanks Ben for sharing. Very insightful, looking forward to more analysis from you!

Posted by keet68 > 2021-01-10 23:34 | Report Abuse

Thanks for sharing

Posted by Ben Tan > 2021-01-11 12:09 | Report Abuse

oohlala, sagaraken, LCLY, keet68, I just wanted to thank you for your comments.

Let's just observe patiently. This week's market will be very volatile. In such times I always like to base my decisions on fundamentals, and at least as far as gloves are concerned, there might be no reason for any action to be taken this week. I would "go to sleep".

Posted by Winner88 > 2021-01-11 18:50 | Report Abuse

feels like so complicated to make money via RSS, bursa better ban RSS.

Posted by Ben Tan > 2021-01-12 11:17 | Report Abuse

Winner88, thank you for your comment. We will need to wait and see if Bursa might decide to reimpose the ban on short selling now with the new round of MCO.

Posted by CJkenho > 2021-01-12 23:40 | Report Abuse

Just wondering if it is just us that imposes these kinda ban on the market during such circumstances? Does the ban make our market appear like a whimpy kid who can't take a challenge?

Posted by MatKoh > 2021-01-13 00:31 | Report Abuse

CJkenho I have a different view.
Short selling activities do bring benefits vis-a-vis bringing liquidity to the market but the orchestrated attempt to bring down the entire Big 4 has been outrightly manipulative and brutal. Weekly sponsored ads stirring up negative news, ESG, languishing ASPs, vaccine roll-outs and the infamous 3.50 TP.

On 4th Jan, shorties trained their gun on glove companies causing RM13.65b market cap to be wiped off from the Big 4 glove counters and EPF abetted the massacre.
How is this level playing field?