Charles Dow wrote in 1901: "The manipulator is all-powerful for a time. He can move market prices up or down. He can mislead investors, inducing them to buy when he wishes to sell, and sell when he wishes to buy; but manipulation in a stock cannot be permanent, and, in the end, the investor learns the approximate truth. His decision to keep his stock or sell it then makes a price independent of speculation and, in a large sense, indicative of true value."
In the current regulatory situation, manipulation, though it does crop up, is less common.
Also read:
Stock Market Manipulations
25 Nov 2008 BURSA MALAYSIA SECURITIES BERHAD REPRIMANDS, FINES AND STRIKES OFF PNEH TEE EONG, A COMMISSIONED DEALER'S REPRESENTATIVE OF M&A SECURITIES SDN BHD FROM THE REGISTER FOR VIOLATION OF RULES 404.3(1)(a) & (b) AND 401.1(2) & (3) OF THE RULES OF BURSA SECURITIES
Showing posts sorted by relevance for query manipulator. Sort by date Show all posts
Showing posts sorted by relevance for query manipulator. Sort by date Show all posts
Tuesday, 9 December 2008
Monday, 2 February 2009
Russia and China Blame Crisis on Debt Binge
Russia and China Blame Crisis on Debt Binge
Topics:Stock Market Banking European Central Bank Credit Economy (U.S.) Economy (Global)
By: Reuters 29 Jan 2009 02:20 AM ET
China and Russia blamed debt-fueled consumption on Wednesday for massive financial collapse and called for global cooperation to repair the world economy.
"The existing financial system has failed," Putin told business and political leaders holding their annual World Economic Forum in this Swiss ski resort.
Growth was based on greed where one center printed money without respite and consumed wealth, and another manufactured cheap goods and saved money, he said.
His clear swipe at the United States was echoed by Chinese Premier Wen Jiabao, who said the bad macroeconomic policies and unsustainable growth models of some countries "characterized by prolonged low savings and high consumption" were primary reasons for the crisis.
Wen also blamed the "blind pursuit of profit."
Despite the criticism of Western policies, both China and Russia pledged their support for open markets, refuted protectionism and called for the Group of 20 major economies to work swiftly toward a global regulatory system that would put world markets and financial institutions on a safer footing.
Certainly government solutions are in the driver's seat at meetings of business leaders and politicians in the Swiss mountain resort, a reversal from the usual gathering where Wall Street tycoons rule.
European Central Bank chief Jean-Claude Trichet joined the call for profound reforms to drag the economy back to health and said the G20, whose leaders hold a summit in April, was doing "good work" on policies.
"Everybody can see the present system is too fragile, and we have to reintroduce an element of resilience ... and we need to do that without any consideration of any kind of vested interest," he told Reuters Television.
Grim Mood
Crisis-hit bankers are thin on the ground at the meeting, and the few who did express concerns that governments would stretch too far on the regulatory front and stifle growth got scant hearing. They were promptly reminded that governments are bailing many of them out.
The mood among business people was grim. The International Monetary Fund forecast the world economy would slow to a near standstill this year, warning that deflation risks were rising.
A poll by PricewaterhouseCoopers of more than 1,100 CEOs found that just 21 percent of CEOs said they were very confident of growing revenue in the next 12 months, down from 50 percent a year ago.
Most business leaders said they expected no more than a slow and gradual recovery over the next three years.
RELATED LINKS
Current DateTime: 02:00:32 02 Feb 2009LinksList Documentid: 28901357
Stocks Could Drop 20%, No Safe Haven: Dr. Doom
Soros: 'Bad Bank' for Troubled Assets Is Bad Idea
Economic Crisis Brings New Set of Hazards: CEOs
Putin calls financial crisis a 'perfect storm'
"There are no silver bullets. My sense is 18 to 24 months of a very tough economic environment," Maria Ramos, chief executive of Transnet, South Africa's rail and logistics company, told Reuters.
Stephen Roach, Morgan Stanley's Asia chairman, agreed it would be "a long slog" over the next three years.
"Forty percent of the world's wealth was destroyed in the last five quarters. It is an almost incomprehensible number," said Stephen Schwarzman, chairman of the leading private equity company Blackstone Group. "Business will be very different."
Currency Row
Before Wen's speech, a row intensified over Beijing's exchange rate policy after new U.S. Treasury Secretary Timothy Geithner branded China a currency manipulator last week, using a term the previous administration avoided for years.
A Chinese diplomat said Washington had enough evidence to know China does not manipulate its exchange rate.
"I don't think it's fair all of a sudden to change the position of the U.S. government," the diplomat said in London, one of the European capitals Wen will visit after Davos.
Wen did not address the row directly in his speech, although his comment on the low savings rate was an indirect reminder that China is financing the United States.
Slideshow: Who's Who in Davos
He expects China to post 8 percent growth this year -- not much different from 2008 but down from 13 percent in 2007. The China slowdown coupled with recession in the major developed economies has pushed the global economy into severe recession.
That grim scenario has left sovereign fund Dubai International Capital wary of making big long-term investments even though it sees asset prices at reasonable levels.
"We're still very nervous about making some big bets -- we see the financial crisis getting worse. There's not going to be a magic wand solution to the problem," Chief Executive Sameer al-Ansari told Reuters.
Copyright 2009 Reuters.
http://www.cnbc.com/id/28901277
Topics:Stock Market Banking European Central Bank Credit Economy (U.S.) Economy (Global)
By: Reuters 29 Jan 2009 02:20 AM ET
China and Russia blamed debt-fueled consumption on Wednesday for massive financial collapse and called for global cooperation to repair the world economy.
"The existing financial system has failed," Putin told business and political leaders holding their annual World Economic Forum in this Swiss ski resort.
Growth was based on greed where one center printed money without respite and consumed wealth, and another manufactured cheap goods and saved money, he said.
His clear swipe at the United States was echoed by Chinese Premier Wen Jiabao, who said the bad macroeconomic policies and unsustainable growth models of some countries "characterized by prolonged low savings and high consumption" were primary reasons for the crisis.
Wen also blamed the "blind pursuit of profit."
Despite the criticism of Western policies, both China and Russia pledged their support for open markets, refuted protectionism and called for the Group of 20 major economies to work swiftly toward a global regulatory system that would put world markets and financial institutions on a safer footing.
Certainly government solutions are in the driver's seat at meetings of business leaders and politicians in the Swiss mountain resort, a reversal from the usual gathering where Wall Street tycoons rule.
European Central Bank chief Jean-Claude Trichet joined the call for profound reforms to drag the economy back to health and said the G20, whose leaders hold a summit in April, was doing "good work" on policies.
"Everybody can see the present system is too fragile, and we have to reintroduce an element of resilience ... and we need to do that without any consideration of any kind of vested interest," he told Reuters Television.
Grim Mood
Crisis-hit bankers are thin on the ground at the meeting, and the few who did express concerns that governments would stretch too far on the regulatory front and stifle growth got scant hearing. They were promptly reminded that governments are bailing many of them out.
The mood among business people was grim. The International Monetary Fund forecast the world economy would slow to a near standstill this year, warning that deflation risks were rising.
A poll by PricewaterhouseCoopers of more than 1,100 CEOs found that just 21 percent of CEOs said they were very confident of growing revenue in the next 12 months, down from 50 percent a year ago.
Most business leaders said they expected no more than a slow and gradual recovery over the next three years.
RELATED LINKS
Current DateTime: 02:00:32 02 Feb 2009LinksList Documentid: 28901357
Stocks Could Drop 20%, No Safe Haven: Dr. Doom
Soros: 'Bad Bank' for Troubled Assets Is Bad Idea
Economic Crisis Brings New Set of Hazards: CEOs
Putin calls financial crisis a 'perfect storm'
"There are no silver bullets. My sense is 18 to 24 months of a very tough economic environment," Maria Ramos, chief executive of Transnet, South Africa's rail and logistics company, told Reuters.
Stephen Roach, Morgan Stanley's Asia chairman, agreed it would be "a long slog" over the next three years.
"Forty percent of the world's wealth was destroyed in the last five quarters. It is an almost incomprehensible number," said Stephen Schwarzman, chairman of the leading private equity company Blackstone Group. "Business will be very different."
Currency Row
Before Wen's speech, a row intensified over Beijing's exchange rate policy after new U.S. Treasury Secretary Timothy Geithner branded China a currency manipulator last week, using a term the previous administration avoided for years.
A Chinese diplomat said Washington had enough evidence to know China does not manipulate its exchange rate.
"I don't think it's fair all of a sudden to change the position of the U.S. government," the diplomat said in London, one of the European capitals Wen will visit after Davos.
Wen did not address the row directly in his speech, although his comment on the low savings rate was an indirect reminder that China is financing the United States.
Slideshow: Who's Who in Davos
He expects China to post 8 percent growth this year -- not much different from 2008 but down from 13 percent in 2007. The China slowdown coupled with recession in the major developed economies has pushed the global economy into severe recession.
That grim scenario has left sovereign fund Dubai International Capital wary of making big long-term investments even though it sees asset prices at reasonable levels.
"We're still very nervous about making some big bets -- we see the financial crisis getting worse. There's not going to be a magic wand solution to the problem," Chief Executive Sameer al-Ansari told Reuters.
Copyright 2009 Reuters.
http://www.cnbc.com/id/28901277
Sunday, 7 December 2025
Why are manipulated stocks so risky?
Questions: Why are manipulated stocks so risky?
14.1.2010
Here are the main points why manipulated stocks are so risky.
List of Main Points
Market Structure Facilitates Manipulation: Bursa Malaysia has an abnormally high number of listed companies for its small market size and economy, creating a pool of low-value, illiquid stocks that are easy targets.
Shifted Motivation for Manipulation: After the 1997-98 crisis, banks became wary of accepting inflated stocks as loan collateral. The primary goal of manipulation is now to directly profit from pumping and dumping shares on retail investors.
The Manipulation Playbook ("Pump and Dump"):
Accumulation & Cornering: Manipulators buy up large stakes at very low prices.
Artificial Inflation: They use tactics like wash trading (fake accounts), ambitious announcements, and large fake buy orders to create false volume and demand, driving the price up.
Enticing Punters: The rising price and fabricated activity lure in speculative retail investors ("punters").
The Dump: While maintaining the illusion of demand, manipulators secretly sell their holdings at inflated prices. Eventually, they dump all remaining shares, causing a crash.
Extreme Risk for Investors:
Predictability: It's nearly impossible for outsiders to know when the dump will happen.
Crash, Not Correction: The decline is typically sudden and severe ("crashes").
Asymmetrical Outcome: Investors risk losing everything ("lose a bomb") on a single failed exit, while gains from timely exits are speculative and risky.
Fundamental Worthlessness of Targets: In Malaysia, many manipulated stocks are from fundamentally weak companies on the "brink of bankruptcy" with little chance of a real turnaround, making them pure gambling vehicles.
Author's Advice & Disclaimer:
Strong Warning: Trading such stocks is compared unfavorably to casino gambling.
Alternative Suggestion: For those drawn to speculation, exploring speculative stocks on the ASX (Australian Securities Exchange) is presented as a potentially better option, as many are exploration companies with genuine, if slim, prospects.
Recommended Approach: The only safe way in Malaysia is fundamental, long-term investing.
Legal Disclaimer: The author states they are not a licensed adviser and shifts responsibility to the reader and their licensed remisier (broker).
Discussion
The text provides a coherent and critical analysis of stock manipulation in the Malaysian context. It effectively traces the evolution from collateral-based fraud in the 1990s to the modern retail-focused "pump and dump" scheme. The core argument is that the risk is systemic and exacerbated by local market conditions.
The discussion highlights the asymmetry of information and control. Manipulators control the supply, information flow (via announcements), and even the appearance of demand. Retail investors are at a severe disadvantage, participating in a rigged game where the exit doors are controlled by the manipulators.
The comparison to a casino is apt but with a crucial distinction: in a casino, the odds are mathematically known and regulated. In a manipulated stock, the "house" (the manipulator) not only controls the odds but can also change the rules of the game mid-play.
The author's perspective is notably cynical about the quality of speculative Malaysian companies and suggests a geographical arbitrage—speculating in Australian resource explorers is framed as having more merit due to the nature of their business (seeking a genuine discovery) compared to the "worthless" Malaysian counterparts.
Summary
Manipulated stocks are exceptionally risky because they represent a controlled deception rather than a genuine investment. In markets like Malaysia, where many small, low-quality companies are listed, manipulators can easily corner a stock. They artificially inflate its price through fake volume and misleading news, creating a false narrative of success to lure speculative retail investors. Once enough outsiders buy in, the manipulators dump their shares, collapsing the price. The retail investor faces a near-impossible task of timing their exit before this crash, often leading to catastrophic losses. The entire process is characterized by a fundamental disconnect between the stock's price and its underlying value, making it a form of financial gambling where the odds are deliberately and opaquely stacked against the public participant. The only advised antidote is to avoid such schemes entirely and stick to fundamental investing.
Tuesday, 6 December 2011
Our corporate punishments are the laughing stock among foreigners. A man was sentenced to 25 weeks in jail for stealing 80 pairs of women's panties.
Time for harsher penalties
Published: 2010/06/07
There are many ways to destabilise or mismanage a company, and in Kenmark case, its top executive and directors from Taiwan went AWOL
 |
There are many ways to destabilise or mismanage a company, and along the way, upset and annoy its minority shareholders.
In the case of Kenmark Industrial (M) Co Bhd, its top executive and directors from Taiwan went AWOL. The furniture maker's shares were sold down, losing some RM140 million of market value in a matter of days. The stock did bounce back, but not before a big damage was done and a new, "friendly" major shareholder was installed.
The latest file marked "How to upset your minority shareholders" involves Linear Corp Bhd. Initial company probe showed that one of its directors had used his autocratic rule to hand out RM36 million to a project owner/developer. The amount was an advance for a RM1.66 billion contract Perak Linear had secured from the developer, but appeared not viable.
Kenmark and Linear are among a list of listed companies that have run foul of corporate rules. Kimble Corp Bhd and Tat Sang Bhd are counted in the list, too.
In the case of Kenmark Industrial (M) Co Bhd, its top executive and directors from Taiwan went AWOL. The furniture maker's shares were sold down, losing some RM140 million of market value in a matter of days. The stock did bounce back, but not before a big damage was done and a new, "friendly" major shareholder was installed.
The latest file marked "How to upset your minority shareholders" involves Linear Corp Bhd. Initial company probe showed that one of its directors had used his autocratic rule to hand out RM36 million to a project owner/developer. The amount was an advance for a RM1.66 billion contract Perak Linear had secured from the developer, but appeared not viable.
Kenmark and Linear are among a list of listed companies that have run foul of corporate rules. Kimble Corp Bhd and Tat Sang Bhd are counted in the list, too.
Its managing director Datuk Yao Bor Bin and former executive director Yao Po Chen were fined by Bursa Malaysia a total of RM75,000 "for being ambiguous and inaccurate in the announcement". The company was delisted in April 2009.
Tat Sang, another furniture maker, shocked investors with its accounting irregularities and the disappearance of key management personnel back in 2002.
Its former managing director Lim Chai Hock was sentenced to five years' jail by the Sessions Court for making false statements to Bursa Malaysia. The sentence was revised by the High Court to a five months' jail and a fine of RM200,000 in default of two months' imprisonment.
Tat Sang was plagued with financial woes just a year after its listing in 2000. It was eventually delisted in 2003.
The point here is that once a corporate manipulator is caught and goes to court, make sure he (interestingly, women is almost or non-existent in the issue) is punished accordingly.
While our local stock market watchdogs, the Securities Commission particularly, may have been swift in their action, the punitive measures appear lenient on corporate manipulators.
Some have said in jest (or are they not kidding?) that our corporate punishments are the laughing stock among foreigners. Swindle loads of money from your company and leave the country, you can then come back and face the low-decibel music.
We may have read that a man was sentenced to 25 weeks in jail for stealing 80 pairs of women's panties. For mismanaging or embezzling millions of ringgit or causing hurt and grievance to many investors, you just get a fine or a brief spell in prison. Some balance in blue and white collar crimes, right? Is there a very fine line in steal, cheat or lie between a corporate man and an ordinary Joe?
In February 2006, it was reported that Fountain View Development Bhd former director Datuk Chin Chan Leong and ex-remisier were found guilty of share manipulation.
Chin was fined RM1.3 million or in default of 13 months' jail as well as sentenced to serve one day in prison for manipulating its share price seven years before.
Hiew Yoke Lan, a former Avenue Securities Sdn Bhd remisier, was fined RM1 million or 10 months default jail sentence for abetting Chin in the offence.
The offence was committed between November 18 2003 and January 20 2004. During this period, Fountain View stock had a low of RM1.99 and a high of RM6.15.
Back in November 2003, at a low of RM1.99, Fountain View carried a market capitalisation of RM885 million. At the peak of the share manipulation of around RM6.15, Fountain View carried a market capitalisation of RM2.73 billion!
If Datuk Seri Idris Jala can overhaul the various subsidies enjoyed by us, how hard can it be to review and slap the harshest possible punishment on corporate manipulators?
Read more: Time for harsher penalties http://www.btimes.com.my/Current_News/BTIMES/articles/zuview6/Article/index_html#ixzz1fhYjGpf6
Saturday, 6 December 2025
Bursa Malaysia striked off Securities dealer (12.8.2014). How easy was it to manipulate so many counters at one go?
Bursa Malaysia reprimands, strikes off TA Securities dealer
http://www.thesundaily.my/news/1137953
12 August 2014
=====
How easy was it to manipulate so many counters at one go?
That's a question that cuts to the heart of the vulnerability exposed in this case. Based on the details, it appears it was surprisingly easy for Oh to manipulate multiple counters simultaneously, due to a "perfect storm" of factors that existed at the time.
Here’s why it was likely easier than one might think:
1. Nature of the Counters: Small, Illiquid Stocks
The six counters (Biosis, Metronic, Ariantec, Luster, Harvest Court, Naim Indah) were almost certainly small-cap or micro-cap stocks with low liquidity (thin trading volume).
Why this matters: In an illiquid stock, a relatively small amount of money can move the price significantly. Placing a few large orders can set the price, and creating even a modest volume of artificial trades can make it look "active." Manipulating a highly liquid blue-chip stock like Maybank would require billions and would be nearly impossible for one dealer.
2. The Mechanism: Married Trades and Cross-Trades
Oh’s primary tools—Married DBTs and matched cross-trades—are executed within the same brokerage (TA Securities).
Internal Matching: He was essentially moving shares between his own pool of client accounts. This doesn't require finding an independent, outside buyer or seller on the open market. The trade is pre-arranged and then executed on the exchange, creating a legitimate-looking record but with no genuine transfer of risk or ownership intent.
Control Over Both Sides: By having authority or influence over the accounts involved (including family members), he controlled both the buy and sell orders. This made execution straightforward and predictable.
3. Lack of Effective Real-Time Surveillance (Circa 2014)
While Bursa Malaysia had surveillance systems, the sophistication in 2014 might not have been as advanced as today in detecting complex, multi-account relationship patterns in real-time.
Detection was likely post-trade: The manipulation occurred "over a period of several months," suggesting it was detected by analyzing historical patterns and linking accounts afterward, not stopped immediately.
4. Exploiting the Commissioned Dealer Role
As a commissioned dealer, his income depended on generating trading volume. This provided both motive and a veil.
Volume as Cover: High volume, even if artificial, could be rationalized as being "for the clients" and generating commissions for the firm. It didn't necessarily raise immediate red flags internally if it was profitable for the branch.
Client Trust/Family Links: Using accounts of family members and compliant clients removed a major obstacle—client suspicion. The clients in on the scheme were beneficiaries; others may have trusted him blindly.
5. The "One-to-Many" Model
Oh didn’t need to manipulate each stock in isolation with a separate scheme. The case describes a hub-and-spoke model:
Oh was the hub. He used the same pool of interconnected client accounts to execute similar manipulative patterns across different counters. The technique (married DBTs, cross-trades) was identical; only the stock ticker changed. Once the method was established, applying it to a sixth stock was just incremental work.
6. Potential Lack of Rigorous Internal Controls
The fact that this went on for months raises questions about TA Securities' internal compliance and supervisory oversight at the time.
Dealer Discretion: He may have had excessive discretion to execute complex off-market (DBT) transactions without immediate supervisory approval.
Focus on Revenue vs. Risk: A high-commission producer might have been subject to less scrutiny.
Conclusion: It Was Relatively Easy Within That Specific Ecosystem
It was not easy in the sense of being simple or risk-free, but it was highly feasible given the confluence of:
The Target: Illiquid, low-priced stocks.
The Method: Internal trades he fully controlled.
The Position: Direct access to the trading system as a dealer.
The Motive: Commission and client favor.
The Weakness: Likely lagging surveillance on relationship-based trading and inadequate internal controls.
In today's environment, such a scheme would be significantly harder to sustain for months due to:
Advanced AI-driven surveillance that maps relationships and detects manipulative patterns in real-time.
Tighter regulations on DBTs and conflicts of interest.
Stronger internal compliance mandates at brokerages.
The case serves as a historical lesson on why regulatory technology (RegTech) and a strong compliance culture are essential to close these systemic loopholes.
Sunday, 20 June 2010
China signals plans for stronger yuan
China signals plans for stronger yuan
June 20, 2010 - 9:11AM
China said it will allow a more flexible yuan, signaling an end to the currency's two-year-old peg to the US dollar a week before a Group of 20 summit.
The decision was made after the world's third-largest economy improved, the central bank said in a statement on its website, without indicating a timeframe for the change. It ruled out a one-time revaluation, saying there is no basis for ``large-scale appreciation,'' and kept the yuan's 0.5 per cent daily trading band unchanged.
``The recovery and upturn of the Chinese economy has become more solid with the enhanced economic stability,'' the People's Bank of China said. ``It is desirable to proceed further with reform of the renminbi exchange-rate regime and increase the renminbi exchange-rate flexibility.''
The move may help deflect criticism from President Barack Obama and other G-20 leaders, who have blamed China for relying on an undervalued currency to promote exports. It also affirms Treasury Secretary Timothy F. Geithner's policy of encouraging China to loosen restrictions on the yuan while resisting calls in Congress for trade sanctions. Geithner in April delayed a report to lawmakers assessing whether China or any other country is unfairly manipulating its exchange rate.
``This is another small victory for Tim Geithner,'' Goldman Sachs's Chief Global Economist Jim O'Neill said in an interview with Bloomberg Television in St. Petersburg, Russia.
The Australian dollar is buying about 5.9 yuan. A stronger yuan may slow the Chinese economy as its exports become less competitive in international markets. On the other hand, China is likely to import more, and its currency will make overseas investments by Chinese companies - such as in Australia's resources and property - more attractive.
`China bashing'
``It makes it a lot more difficult for Washington and Congress to do China bashing,'' O'Neill said. ``The Chinese are increasingly confident they can make this adjustment to a domestic-driven economy rather than the one relying on exporting low-value-added stuff to the rest of the world.''
Geithner, in a statement, praised China's decision and added that ``vigorous implementation would make a positive contribution to strong and balanced global growth.'' The Obama administration received advance notice of the announcement, US officials said.
China, by moving on its currency ahead of the G-20 meeting June 26-27 in Toronto, has shifted attention to the budget deficits of developed nations, said Eswar Prasad, a senior fellow at the Brookings Institution in Washington.
``It can now argue that the G-20 leaders should focus on the major determinants of global imbalances, especially the buildup of debt in advanced economies,'' said Prasad, a former head of the China division at the International Monetary Fund. The move ``also serves to acknowledge that they have an important responsibility to the international community.''
Helping exporters
Chinese authorities have prevented the currency from strengthening since July 2008 to help exporters cope with sliding demand triggered by the global financial crisis.
The currency appreciated 21 per cent in the three years after a peg to the US dollar was scrapped in July 2005 and replaced by a managed float against a basket of currencies including the euro and the Japanese yen. The yuan is a denomination of China's currency, the renminbi.
``This move is a vote of confidence in the global recovery and a reaffirmation of Beijing's longstanding commitment to a flexible currency regime,'' Stephen Roach, chairman of Morgan Stanley Asia Ltd., said in an e-mail. ``This shift, however, is not a panacea for an unbalanced global economy. Surplus savers like China still need to take additional actions to stimulate internal private consumption.''
Import costs
Companies focused on the Chinese market, including Beijing-based computer maker Lenovo and Shanghai-based China Eastern Airlines, said in March that they would gain from lower import costs and stronger consumer purchasing power should the yuan appreciate. Textiles makers would stand to lose the most and some would ``face bankruptcy'' with profit margins as low as 3 per cent, Zhang Wei, vice chairman of the China Council for the Promotion of International Trade, said in March.
A more flexible currency would give China more freedom to decide on monetary policy and reduce inflationary pressures by lowering import costs, the World Bank said in a report last week.
China's inflation rate jumped to a 19-month high of 3.1 per cent in May, higher than the government's full-year target of 3 per cent. Central-bank dollar buying has left the nation with $US2.4 trillion in currency reserves, the world's largest holding.
`Crisis mode'
``China has ended its crisis-mode exchange-rate policy as the economy recovers strongly and inflationary pressure continues to build,'' Li Daokui, an adviser on the People's Bank of China's policy board, said in an interview. ``The yuan's future trend depends on the euro's movement, and the trends of other major currencies.''
Yuan 12-month forwards rose the most this year two days ago, gaining 0.5 per cent to 6.7125 per US dollar. The contracts reflect bets the currency will appreciate 1.7 per cent from the spot rate of 6.8262. They had been pricing in appreciation of 3.2 per cent on April 30 before a slump in the euro and a worsening of Europe's debt crisis eased pressure for appreciation.
``The central bank's statement means China's exit from the dollar peg,'' said Zhao Qingming, an analyst in Beijing at China Construction Bank, the nation's second-biggest bank by market value. ``If the euro continues to remain weak, it could also mean that the yuan may depreciate against the dollar.''
Deadline postponed
Geithner postponed an April 15 deadline for a semiannual review of the currency policies of major US trading partners, which might have resulted in China being labeled a currency manipulator. China owned $US900 billion of US Treasuries as of April, the largest foreign holdings.
China's exports jumped 48.5 per cent in May from a year earlier, the biggest gain in more than six years, according to customs bureau data June 10. Exports exceeded imports by $US19.5 billion, from $US1.68 billion in April and a deficit of $US7.24 billion in March that was the first in six years.
China's narrowing balance-of-payments gap indicates that there's no basis for ``large-scale appreciation'' by the yuan, the central bank said in the English version of its statement. The Chinese version said no ``large-scale volatility.''
Twelve of 19 respondents surveyed by Bloomberg in April predicted the central bank would allow the currency to float more freely this quarter, while the rest saw a move by year-end. Eleven ruled out a one-time revaluation, while 15 predicted a wider daily trading range.
``Continued emphasis would be placed to reflecting market supply and demand with reference to a basket of currencies,'' the statement said. That suggests a looser link to the dollar, said Ben Simpfendorfer, chief China economist at Royal Bank of Scotland Group Plc, in Hong Kong.
``China has to offer something ahead of the G-20,'' he said. ``Greater flexibility allows them the option to appreciate against the dollar, perhaps during periods of dollar weakness.''
Bloomberg News
June 20, 2010 - 9:11AM
China said it will allow a more flexible yuan, signaling an end to the currency's two-year-old peg to the US dollar a week before a Group of 20 summit.
The decision was made after the world's third-largest economy improved, the central bank said in a statement on its website, without indicating a timeframe for the change. It ruled out a one-time revaluation, saying there is no basis for ``large-scale appreciation,'' and kept the yuan's 0.5 per cent daily trading band unchanged.
``The recovery and upturn of the Chinese economy has become more solid with the enhanced economic stability,'' the People's Bank of China said. ``It is desirable to proceed further with reform of the renminbi exchange-rate regime and increase the renminbi exchange-rate flexibility.''
The move may help deflect criticism from President Barack Obama and other G-20 leaders, who have blamed China for relying on an undervalued currency to promote exports. It also affirms Treasury Secretary Timothy F. Geithner's policy of encouraging China to loosen restrictions on the yuan while resisting calls in Congress for trade sanctions. Geithner in April delayed a report to lawmakers assessing whether China or any other country is unfairly manipulating its exchange rate.
``This is another small victory for Tim Geithner,'' Goldman Sachs's Chief Global Economist Jim O'Neill said in an interview with Bloomberg Television in St. Petersburg, Russia.
The Australian dollar is buying about 5.9 yuan. A stronger yuan may slow the Chinese economy as its exports become less competitive in international markets. On the other hand, China is likely to import more, and its currency will make overseas investments by Chinese companies - such as in Australia's resources and property - more attractive.
`China bashing'
``It makes it a lot more difficult for Washington and Congress to do China bashing,'' O'Neill said. ``The Chinese are increasingly confident they can make this adjustment to a domestic-driven economy rather than the one relying on exporting low-value-added stuff to the rest of the world.''
Geithner, in a statement, praised China's decision and added that ``vigorous implementation would make a positive contribution to strong and balanced global growth.'' The Obama administration received advance notice of the announcement, US officials said.
China, by moving on its currency ahead of the G-20 meeting June 26-27 in Toronto, has shifted attention to the budget deficits of developed nations, said Eswar Prasad, a senior fellow at the Brookings Institution in Washington.
``It can now argue that the G-20 leaders should focus on the major determinants of global imbalances, especially the buildup of debt in advanced economies,'' said Prasad, a former head of the China division at the International Monetary Fund. The move ``also serves to acknowledge that they have an important responsibility to the international community.''
Helping exporters
Chinese authorities have prevented the currency from strengthening since July 2008 to help exporters cope with sliding demand triggered by the global financial crisis.
The currency appreciated 21 per cent in the three years after a peg to the US dollar was scrapped in July 2005 and replaced by a managed float against a basket of currencies including the euro and the Japanese yen. The yuan is a denomination of China's currency, the renminbi.
``This move is a vote of confidence in the global recovery and a reaffirmation of Beijing's longstanding commitment to a flexible currency regime,'' Stephen Roach, chairman of Morgan Stanley Asia Ltd., said in an e-mail. ``This shift, however, is not a panacea for an unbalanced global economy. Surplus savers like China still need to take additional actions to stimulate internal private consumption.''
Import costs
Companies focused on the Chinese market, including Beijing-based computer maker Lenovo and Shanghai-based China Eastern Airlines, said in March that they would gain from lower import costs and stronger consumer purchasing power should the yuan appreciate. Textiles makers would stand to lose the most and some would ``face bankruptcy'' with profit margins as low as 3 per cent, Zhang Wei, vice chairman of the China Council for the Promotion of International Trade, said in March.
A more flexible currency would give China more freedom to decide on monetary policy and reduce inflationary pressures by lowering import costs, the World Bank said in a report last week.
China's inflation rate jumped to a 19-month high of 3.1 per cent in May, higher than the government's full-year target of 3 per cent. Central-bank dollar buying has left the nation with $US2.4 trillion in currency reserves, the world's largest holding.
`Crisis mode'
``China has ended its crisis-mode exchange-rate policy as the economy recovers strongly and inflationary pressure continues to build,'' Li Daokui, an adviser on the People's Bank of China's policy board, said in an interview. ``The yuan's future trend depends on the euro's movement, and the trends of other major currencies.''
Yuan 12-month forwards rose the most this year two days ago, gaining 0.5 per cent to 6.7125 per US dollar. The contracts reflect bets the currency will appreciate 1.7 per cent from the spot rate of 6.8262. They had been pricing in appreciation of 3.2 per cent on April 30 before a slump in the euro and a worsening of Europe's debt crisis eased pressure for appreciation.
``The central bank's statement means China's exit from the dollar peg,'' said Zhao Qingming, an analyst in Beijing at China Construction Bank, the nation's second-biggest bank by market value. ``If the euro continues to remain weak, it could also mean that the yuan may depreciate against the dollar.''
Deadline postponed
Geithner postponed an April 15 deadline for a semiannual review of the currency policies of major US trading partners, which might have resulted in China being labeled a currency manipulator. China owned $US900 billion of US Treasuries as of April, the largest foreign holdings.
China's exports jumped 48.5 per cent in May from a year earlier, the biggest gain in more than six years, according to customs bureau data June 10. Exports exceeded imports by $US19.5 billion, from $US1.68 billion in April and a deficit of $US7.24 billion in March that was the first in six years.
China's narrowing balance-of-payments gap indicates that there's no basis for ``large-scale appreciation'' by the yuan, the central bank said in the English version of its statement. The Chinese version said no ``large-scale volatility.''
Twelve of 19 respondents surveyed by Bloomberg in April predicted the central bank would allow the currency to float more freely this quarter, while the rest saw a move by year-end. Eleven ruled out a one-time revaluation, while 15 predicted a wider daily trading range.
``Continued emphasis would be placed to reflecting market supply and demand with reference to a basket of currencies,'' the statement said. That suggests a looser link to the dollar, said Ben Simpfendorfer, chief China economist at Royal Bank of Scotland Group Plc, in Hong Kong.
``China has to offer something ahead of the G-20,'' he said. ``Greater flexibility allows them the option to appreciate against the dollar, perhaps during periods of dollar weakness.''
Bloomberg News
Tuesday, 12 August 2014
Bursa Malaysia reprimands, strikes off TA Securities dealer
http://www.thesundaily.my/news/1137953
12 August 2014
PETALING JAYA: Bursa Malaysia Securities Bhd has publicly reprimanded, imposed a fine of RM360,000 and ordered to strike off Oh Kok Boon, a dealer, for manupulating dealing activities in six counters.
He was found to have made manipulative dealings in Biosis Group Bhd, Metronic Global Bhd, Ariantec Global Bhd, Luster Industries Bhd, Harvest Court Industries Bhd and Naim Indah Corp Bhd.
Oh was a commissioned dealer's representative at TA Securities Holdings Bhd main office at the time of breach.
He was found engaged in numerous manipulative or false dealing activities over a period of time in the accounts of several clients involving clients who were his family members as well.
Oh was said to have bought Harvest Court and Naim Indah shares on or before the due date for settlement by passing on these to other clients via married direct business transactions (DBT), which were executed at prices higher than the prevailing market price.
"These married DBTs were used as a tool/device that provided savings/avoided losses to the selling clients in the down trending market of these securities," Bursa said.
By doing so, Oh and his clients were able to prolong the holding period of the shares and also drive up the stock prices which contributed towards artificial inflated or increased volume for the counters.
Bursa said the on-market trading activities undertaken by Oh over a period of several months in the six counters with the execution of opposing buy or sell orders for a group of his clients resulted in their opposing orders being matched against each other.
These cross trades between Oh's clients at the dictated increased or decreased share prices had impacted or influenced the price movement or trading volume of the six counters, Bursa said.
The manipulative trading activities by Oh had the effect of creating a false or misleading appearance of active trading in the securities of the six counters as the trades were not due to natural market forces of supply and demand.
Bursa said it was not acceptable for Oh as a registered person to merely execute orders as instructed by his clients without making proper assessment of the orders and exercising reasonable due care and diligence in undertaking dealing activities so as to avoid manipulative or false dealing activities.
Subscribe to:
Comments (Atom)