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

Mayb they jz wanna dispose the position on hand.. rss for hedging purpose only leh..

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

Fund collected already used to goreng other bank and tech stocks, if that part can give more than 50-100% gain then its worth to short..

Posted by lkoky > 2021-01-17 09:11 | Report Abuse

they shld at least try one last push short the balance 1%+ of TopGlove.

Posted by goldenluck16 > 2021-01-17 09:40 | Report Abuse

Yes, let them short so we can buy cheap.

Posted by goldenluck16 > 2021-01-17 09:40 | Report Abuse

Don't chase high.

Posted by PZOGRO > 2021-01-17 09:41 | Report Abuse

HOT!

BURSA READY TO SUSPEND RSS & IDSS FROM WEEK AHEAD!

SHORTS WITH CAUTION!

Posted by Ben Tan > 2021-01-17 09:54 | Report Abuse

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.

Posted by BALANCE_VIEW > 2021-01-17 10:05 | Report Abuse

I have been waiting for the day shorties finishes the 4%, but neck aldy long yet shorties got no marbles 2 finish it!!

If they finished it earlier, then the show can start !!

Posted by kewaljit > 2021-01-17 10:16 | Report Abuse

Maybe they waiting for good vaccine news or when Malaysia starts vaccination. Then they will short because some retailers might panic sell. Right now not a good time to short because in Malaysia and all over the world , cases are at
All time high and vaccine news is not good (side effects and slow rate of Vaccination in US) Furthermore present price is low. Many are waiting to get into gloves at bargain price when they short.

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

thanks for rss information on big 4, looking for big rally soon.

Posted by Vairocana9999 > 2021-01-17 10:30 | Report Abuse

Bro Ben, thanks for the excellent calculations and sharing. Next week onward, it is the best time to squeeze the short sellers when more bad news on the pandemic keep surfacing (the all time high covid cases despite massive doses of vaccines, increasing half-baked vaccine's death cases, acute shortage of PPE including GLOVES,recovery stocks facing setback due to lock down, etc), the big 4 can just team up for SBB, since they have piles of cash ready. Yes, we shall see what is the outcome .

Posted by Goldberg > 2021-01-17 10:36 | Report Abuse

The SHORTIES will be getting jittery as they are running out 'stories' and Shares ( TG shares) to Short Sell- as the ceiling of 4% is approaching.

Sooner or later Shorters may have to bite the bullet and short squeeze.

Hope that day will come really soon.

Thanks Ben for the article. Cheers!

Posted by Vairocana9999 > 2021-01-17 10:38 | Report Abuse

@PZOGRO, I guess the authority cannot simply U-Turn on their policy. May be those sit up there thought by reinstate the RSS on 1 Jan 2021, more angmo funds will pour in, but instead so far, only the shorties, what a BIG disappointment, right? THESE FLURS UP THERE SHOULD JUST BAN ALL THESE SO CALLED STRUCTURED WARRANTS, THEN MAY BE MORE ANGMO FUNDS WILL HAVE CONFIDENCE TO COME HERE.

Posted by Ben Tan > 2021-01-17 10:53 | Report Abuse

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.

Posted by AXE666 > 2021-01-17 11:11 | Report Abuse

Ben Tan, what is the impact to shorties if they continue to drag the buy back ?

Posted by cpchuan > 2021-01-17 12:55 | Report Abuse

Hi Ben Tan, thank you for the good article. What hurt the short sellers the most is "margin call" if they continue holding the positions. By "margin call", I mean they have to top up cash collateral if the market price goes above certain % of their short price. Shorting is a leveraged instrument. Do yo know what's this %? If it's 10%, they would have kena margin call. So, the RM2B paper loss isn't really on paper only; there's actually negative cash flow.

Posted by nobullshit_investor > 2021-01-17 13:12 | Report Abuse

Great Article, Ben Tan. Appreciate your efforts showing clear analytics on short position. If we also look at technical indicator covering the last 10 trading session, Top glove 1st support level is at 5.68, which is surprisingly similar to average net short price. That was when the rebound took place after the 4th Jan big shorts. So shorties are in tough spot to break down that support wall to just break even on their positions. If the market goes north and break upper resistance at 6.88, my opinion is that it will trigger short squeeze and move the prices up to about 7.6 region. So coming week is going to be interesting. The fight is definitely on!

Posted by sagaraken > 2021-01-17 13:51 | Report Abuse

Hi Ben Tan, again, appreciate your thoughtful analysis, it's always a pleasure having i3investor members like you. Depending how much 'depth' the shorties, they might have continue to short the glove sector; With recent news of TOPGLOVE having positive cases, this might trigger another selldown on Monday (like how it happened in November). However, I do agree that there might be a time where these shorties might run out of funds and starting to close their positions. One can only hope that Fundamentals will prevail again. It is rather sad to see the glove companies getting hampered despite being one of the best fundamentals currently in KLSE since the pandemic. What is even peculiar is the fact that the current PE is lower than before the pandemic levels.

Posted by Anthem2 > 2021-01-17 14:33 | Report Abuse

Good job Ben.The relentless demonisation of TG in certain media releases and the timing is uncanny. In the state of affairs we're in, which company could claim to be free of COVID? This certainly exemplifies the "mercenary" attitude of some of these media organisations and brings into question their credibility.

Posted by LimitUp > 2021-01-17 14:35 | Report Abuse

Hi Ben Tan, iyo how much of an effect of yesterday's news will have on Monday's trading sentiment that workers at 4 TG factories have been tested positive. Surely short sellers would not waste the opportunity to mount another onslaught similar to 4 January's. To strong glove believers surely they will ignore it as a minor setback with negligible effect to current quarters results.

Posted by treasurehunt > 2021-01-17 14:39 | Report Abuse

Short Sellers short sold Rm 1.7 billion worth of healthcare shares from 4 Jan to 8 Jan. Foreigners disposed 1.087 billion out of the above value whereas local retailers bought 534 millions. The remaining short selling 613 millions could be either done by local or foreign institutionals. If we assume that short selling 1.7 billion was done by foreigners, the foreigners bought 613 million in the same week.

Posted by Orlando > 2021-01-17 14:50 | Report Abuse

Foiled by retailers

Long live retailers

Posted by Ben Tan > 2021-01-17 14:54 | Report Abuse

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.

Posted by ming > 2021-01-17 16:33 | Report Abuse

If the price go lower, the profit from rss portion can cover their loss on existing position

If the price goes up.. profit from existing portion can cover loss from the rss portion..

My opinion that they jz wanna lock the profit at current range..

JPM alrdy win this war..

Posted by lkoky > 2021-01-17 16:55 | Report Abuse

exactly!! currently the press will only name TG openly when there is confirmed cases.

With daily cases >3k, all workplaces bound to have cases sooner or later.

Even my office with less than 30% workforce also has confirmed cases in the office.

Posted by Ben Tan > 2021-01-17 16:58 | Report Abuse

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.

Posted by LaoTzeAhSir > 2021-01-17 18:25 | Report Abuse

no wonder shortists team up with media busy spreading fake and fearmongering news on gloves over weekend. these media and people who spread are the traitors to our country. shame

Posted by LaoTzeAhSir > 2021-01-17 18:26 | Report Abuse

they are getting desperate as fire already burning in their fking arses.

Posted by chtan33 > 2021-01-17 18:57 | Report Abuse

To press the price down, they have to sell even lower.... the tricky part is can they buy back lower after selling low.?

Posted by Ben Tan > 2021-01-17 19:13 | Report Abuse

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.

Posted by ks5S > 2021-01-17 19:42 | Report Abuse

https://www.jpost.com/israel-news/rabbi-yisrael-lau-infected-with-corona-after-receiving-two-pfizer-doses-655703?traffic_source=Connatix

Posted by Icon8888 > 2021-01-17 21:02 | Report Abuse

Goodluck tmr cont short.

Posted by 99newbie > 2021-01-17 21:09 | Report Abuse

Don’t sell low and happy to those people short sell

Posted by kongkakiao > 2021-01-17 21:57 | Report Abuse

Will there be case like those IB who RSS the price to new low on the first day at the same time already sapu at lower price also? RM5.28~RM5.5 range.

Posted by Ben Tan > 2021-01-17 22:23 | Report Abuse

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.

Posted by PeterPan1979 > 2021-01-18 12:01 | Report Abuse

Hi ben tan, may i know how u obtain or derive the average short price for the gloves counter? when EPF lent their shares to IBs for short selling, is this indicated/considered as disposal of shares by EPF ?

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

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

Posted by PeterPan1979 > 2021-01-18 12:28 | Report Abuse

thanks ben for your reply. i am aware of the 40Mil shares transaction by EPF but i dont understand why its indicated as disposal n resulted with EPF's share fell below the 5% threshold as eventually the short sellers would have to buy back and refund the shares to EPF right?

Posted by Ben Tan > 2021-01-18 12:38 | Report Abuse

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).

Posted by PeterPan1979 > 2021-01-18 12:41 | Report Abuse

hmm...so in case of dividend entitlement, then EPF will not be entitled for them by lending the shares to short sellers?

Posted by PeterPan1979 > 2021-01-18 12:43 | Report Abuse

unlike their counterparts in malaysia, glove makers listed in SGX like sri trang and riverstone have moved so much higher as compared to their lows in Dec 2020.

Posted by Ben Tan > 2021-01-18 12:47 | Report Abuse

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.

Posted by wbwanabe > 2021-01-18 13:38 | Report Abuse

When the short sellers return the borrowed shares to EPF, then EPF would be back to above 5%.
The issue I wanna check is - is it true that the lenders (EPF) can recall their loans anytime they want?

Posted by Ben Tan > 2021-01-18 13:45 | Report Abuse

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.

Posted by wbwanabe > 2021-01-18 13:46 | Report Abuse

Regarding Harta and Smax QR, its usually followed by announcement of dividends as well. Hence my guess is the shorties do not have many days left before they have to buy back the shares they loaned. Imagine the amount of shorts that had done on Harta and Smax and should they declare hefty dividends, then fireworks show will start. Just be patient and hold for another few weeks.

Posted by Ben Tan > 2021-01-18 13:49 | Report Abuse

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

Posted by wbwanabe > 2021-01-18 14:10 | Report Abuse

Ben, since you track the numbers so diligently, is it possible for you to track on EPF holdings once their loan shares were return plus any additional shares that EPF has added in during the period when they are under the radar?. It may seems to be an exercise in futility if the loan amount return is not stated as "return shares from SBL".
The reason I am requesting is because I noticed in the announcement sections, EPF can be a buyer and seller on the same day and it puzzles me no end. I always thought who in the right mind would buy and sell at the same time, makes no sense at all. Then now I think it makes perfect sense as in one hand they are selling down for their shorties (via SBL) and on the other hand they are buying what they are shorting. Hence any time shorties are throwing, EPF may be the one picking up these cheap shares. Implications from here would be :
- there would be support for the shares below a certain price
- EPF knowing the operations to selldown may be the biggest beneficiary cause they are now getting it at a cheaper price and would sell them in the open market. As such the shorties would have no choice but to buy at a higher price when the time has run out for them.
- this may work if the prospects are still good for the shares being shorted, example the glove counters. Looking at the current stock prices, ie still holding above 6 for TG and Smax may be an indication that the shorties are failing miserably in their attempt to short the Big 4
- be prepared for more "bad articles" or negative news since the shorties are so desperate
Possible?

Posted by Ben Tan > 2021-01-18 15:38 | Report Abuse

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.

Posted by wbwanabe > 2021-01-18 17:16 | Report Abuse

Thanks for all the hard work. Your write up is very thorough and I am sure help lots of newbies who are ignorant about RSS.

Posted by SteadyT > 2021-01-18 17:46 | Report Abuse

@Ben Tan, based on your analysis, do you know what is the main reason that triggered the massive spike in glove share prices on the 8th of Jan? It couldn't be just MCO 2.0 news right?