Sunday, 12 October 2008

Maybe... just maybe...

My friend who works in the treasury division pointed out something very peculiar to me. If you have been paying attention to the currency and market movement around the world, you might just agree with what our second finance minister so proudly proclaimed last week; that our country is not, and will not fall into a recession.

Indeed, our very own stock market has plunged below the 1,000 points barrier. “But it’s only around 3%”, that’s what my friend said. 8% - 12%, that’s the average drop in the stock market across the globe. Dow Jones, what is arguably the heartbeat of all stock market, has plunged from 11,000 points to 8,500 points in 8 days.

What make our very own Bursa Malaysia so strong?

The reason why the stock markets are tumbling is simply because all the “investors” and fund managers just dump their shares into the market to get back their cash. I know of a fer overseas fund managers who just sold their portfolio and went to the pub and drink their sorrows away, during working hours.

So are they not dumping their Malaysian shares? Or… is there no foreign holding in our stock market? Words are going around that all the foreign investors have sold all their Malaysian shares after the 8 March tsunami.

So, if the foreign fund managers are all gone, who is holding our shares?

Our stock market is quite peculiar indeed. You can have 200+ counters falling and yet, the index can rise. That is because, in order to push the index, you just need to make sure a few counters perform well. So who is sustaining the market by keep buying all these index linked counters? Certainly not foreign funds. Ask around, and you’ll know. It might just be your money.

Of course, one can always say the above are all a load of bull and the reason why our Bursa is still strong (index wise) is because our beloved country is actually a damn strong country. Regardless of the extreme diarrhoea currently seen in the price of crude petrol and palm oil, the bread and butter of our country, we are still very rich.

And top that with highly capable leaders, recession will never come to our shores; just like melamine tainted products also never hit our shores. Milk of a particular brand can fail the melamine test in Hong Kong and yet, our papers can just squashed all the “rumours” by saying “xxx tidak mengandungi susu dari China”. Apparently these companies do not use cheap china based milk but expensive milk from Australia. Would you believe it……

Well, maybe our country is actually very strong. Maybe our country product quality control is really top notch. We just can't build roof and roads properly… that’s all. Maybe… just maybe…

21 comments:

Freethinker said...

well.. these artificial push is not exactly a secret. I know those in the wealth management industry who tells the "big E" supporting the counters as well as periodic periods where fund managers would jack up the market...

Well... at least..is still consistent with Malaysia stocks... hardly are those that comes by that is really driven by fundamentals..

at least not the popular ones..

myop101 said...

look...there are a few jokers around other than the Big E...like P, T, L...

anyway, some are trading below NTA and are definitely profitable...

day-dreamer said...

Haha... I don't really believe in those "maybe"s. :P

JoMel said...

hahaha.. zewt zewt zewt!! Our market is not strong AT ALL! In fact, as you have rightly said, ours was one of the first in the region to be sold down due to our political "wayang show" and also the "sudden" imposing and equally "sudden" removal of windfall tax on CPO and Independent power producers, amongst other reasons. So yes, most foreign funds have already left our country. Who's holding our stocks? Well the EPF for one, the fund houses like Public Mutual, CIMB, and all the others, and of course, people you and me... seeing it's really too late to sell now... hold lor *sigh*. Also, when the market is oversold like this, obviously value investors and fund managers would be looking at cheap cheap blue chips, and blue chips are those that have weightings on the index. This should answer your question. Hehe..

Anyway, if you've notice Thursday and Friday market condition, we don't seem to be holding so well anymore. The breathteaking plunge of the Dow has affected all markets and people here are already starting to panic.

JoMel said...

wait a minute... maybe you were trying to be sarcastic? Maybe.. just maybe.. ;)

hasilox said...

It's ok najib cannot understand. Recession is a term used in nuri's drop-from-the-sky test. He is no more in defence. So, msia very lucky lor :P

pavlova said...

hahah, love your sarcasm....

but believe it or not, people actually might buy what you're saying... :P

go around and ask how many of them think malaysia is still very strong and "lovable"...
you can find plenty..

and more often one of the reasons they'll cite is: oh, it's because we have a multiracial country that live harmoniously with each other...
the freaking propaganda that has been drummed into our heads since school days...

sigh oh well, perhaps it is the us-versus-them mentally... maybe this country is so great that only a small minority people like us think it's kinda screwed up... :P

PurpLe~MuShRooM said...

Yes man!!! Our country is damn strong!!! I love our country! I love our PM and our DPM who are so damn capable in maintaining our economy despite the worldwode turmoil. They are damn good!! No one can deny that. They are simply the best!!! Yoohooo!!! I love this country!!

H.C. Tan said...

seems weird huh, as if malaysians not affected at all by the current economic situation. we still go shopping, cinema, etc etc. businesses still go on as usual...yeah, malaysia bulehhhh.

p/s: surely there's sth positive abt malaysia that you like, zewt?

zewt said...

freethinker - the big-E, is that how you call it? well, there goes our retirement...

myop101 - what's P, T and L ah? hehe... and nah, i am not touching anything. cash is still my preferred choice. maybe AUD is a good buy now.

day-dreamer - there are people who believe... trust me...

jomel - hehe... maybe... just maybe... or maybe i am just being zewt. one thing i dont understand.... assuming my maybes are incorrect... our market still correspond to the drop in han seng and nikkei, if all the foreign funds are gone... that shouldnt be the case, isnt it? too many maybes....

hasilox - hahahaha... well, maybe he believes he is recession proof. not us though.

pavlova - exactly...there are ppl who are like that... which is why, we will never progress.

purple mushroom - hahahaha... like that ah... i also love my country very much. eh... really leh, i love my country...

HC Tan - yeah... that i can still blog while working.

Life for Beginners said...

Sometimes it is the illusion that is sustained and we've been fortunate in the past that simply doing this have been enough. I'm keeping my fingers crossed history repeats itself, in this case. :P

"Joe" who is constantly craving said...

well the company that said they r using aussie milk is our client..n they DO use milk from australia..bcoz we do some work where it involves seeing where their stuff are imported from..

so benefit of the doubt la..not guilty as always..

JoMel said...

Klci dropped in tandem with the other regional and global markets. Sentiment is poor, confidence is almost nonexistent. Nothing strange about that. Foreign funds has got nothing to do with it. Surely you don't expect us to trend against the tide do you? Wah... you really think M'sia is strong!! hehe..

Terra Shield said...

Oh crap. I did some PM investment recently...

CSK said...

The current credit crisis would provide strong protection for our msia gov 's plan or actions.

Their argument sounds like this

frequency of financial global crises was caused by weaknesses in the system of liberal capitalism, led by the United States.

Such a system has minimal supervision and the government role in the economic sector was reduced, where privatisation was implemented on a large-scale, including selling national assets to outsiders,

myop101 said...

3 letters for P.., 2 letters for T. and 4 letters for L...

it is very easy to guess...hehe...
same gang as Big E...

myop101 said...

oh yeah from the look of things...

AUD has yet to see the floor... up to you la if you want to get now, for me... i can still wait... :)

see said...

of course lah, finance minister & co has to say every thing hunky dory. Its true many foreign investors (portfolio ones not FDI) have dumped KLSE shares after the GE which explains why when asian markets crashed 10% ours down only 2% ....FUNDAMENTALS STRONG ....KAKAKAKA!!! but there are still some foreign investors holding selective stocks.

zewt said...

life for beginners - hahha... dont we all want that...

constant craver joe - that is comforting indeed. but i still have no confidence on things.

JoMel - hahaha... well, the index is rising and stocks are soaring again. everyone seems to be happy. but not everyone directly benefits... except for u i guess.

Terra Shield - guess u have to hoooooooold for while.

CSK - dont quite get u.

myop101 - I get the P. cant get the T and L though hehe... i can definitely wait. yes, i think the current rebound is artificial.

see - yeah... those who make up that 1-2%... sigh...

Huei said...

shares..complicated! i'm not made for numbers >.<

our cunt tree ar..damn unique wan......ahuh...

zewt said...

huei - what if i say it can boost your wallet? that might change the perception a bit.