Wednesday, October 1, 2014

On 21 Jun 2013, something happen to at least 8 stocks in Bursa, the price either limit up or limit down on that day. I still remember after market closed, I receive many client's call to find out what's happening. That time, really nobody know what's the problem, but what we know after clarification from Bursa that the trade was not a mistake. After this incident, Bursa had implemented a system of 8% limit on last done price which use till today. Below the yesterday's news which disclosed all the details on what's happening on that day.

Bursa has publicly reprimanded and imposed a fine of RM100,000 on Fintan Romuald Inbaraj Nicholas (FINTAN) for trading misconduct which involved execution of trades that caused significant price fluctuation in eight (8) counters, namely STAR, JCY, BKAWAN, COASTAL, CBIP, HSPLANT, TDM and BJTOTO (8 Affected Counters) and impacted these securities closing price to hit at or near the limit up/down price on 21 June 2013.  FINTAN, who was at the material time of the breach a Salaried Dealers Representative (SDR) (cum Head of Inter-Broke Dealing team) of Kenanga Investment Bank Bhd (KIBB) at its Principal Office.

The finding of the breach and the imposition of the sanctions on FINTAN was made after taking into consideration all facts and circumstances, including that:
  1. Based on FINTANs instruction, the execution dealers of KIBBs Inter-Broke Dealing team under the charge of FINTAN had entered buy/sell orders of the 8 Affected Counters for a client as part of the clients portfolio rebalancing (in a market on close order) at prices which were significantly far away from the market price and at/near limit up or down prices for the 8 Affected Counters on 21 June 2013.
  2. The entries of these orders on 21 June 2013 had:
    1. adversely affected or impacted the Theoretical Closing Price (TCP) of the 8 Affected Counters during the Pre-Closing phase and/or the Trading At Last phase giving rise to the significant increase in the closing price of two (2) counters (of buy orders) which hit at or near limit up price and significant decrease in the closing price of six (6) counters (of sell orders) which hit at or near limit down price; and
    2. distorted the discovery of the fair price of the 8 Affected Counters.
  3. In undertaking any trading strategy and executing/instructing the execution of these orders towards fulfilling clients orders, FINTAN should have undertaken the following:-
    1. considered the effects, risks and consequences of entering orders at prices which were significantly far from the market price of the 8 Affected Counters;
    2. assessed the liquidity for each of the counters taking into account, amongst others, the magnitude of the clients orders vis-a-vis the opposing orders in the market in respect of these counters at the material time prior to/of execution of the orders; and
    3. closely monitored/ensured close monitoring of the orders entered;
FINTAN however had failed to undertake such assessment and monitoring and had unreasonably executed/instructed the execution of these orders based on, amongst others, an assumption that there was generally liquidity of counters on a rebalancing day.

CIMBC25 now rename to CIMBC50

What's happening to Hong Kong currently? This is one of the Google trend hot topic now. Today is China's National day and the protest still continue. Hopefully China will take a win win strategy soon if not both side will pay for heavy price.

So, what's that going to do with us stay outside Hong Kong here? Well, one of the stock that I did invest was Hong Kong ETF listed at Bursa here, CIMBC25. It's a nice timing that the ETF also change the name on 29 Sep 2014 to CIMBC50 and now the stocks in basket become 50 instead of 25 previously. Theoretically, by adding more stocks to the basket will make this ETF become less volatile. Hence, my strategy of making money in this ETF now need to review. I will stop trading on this ETF for the time being and monitor closely for the next 6 months to come out the final conclusion.

For those who are interested, the basket of stocks now consist below stocks:

0688.hkChina Overseas Land & Investment Ltd.
1288.hkAgricultural Bank Of China Limited
6030CITIC Securities Co Ltd
3988Bank of China
3328.hkBank of Communications Co., Ltd.
0883CNOOC Ltd
0998China CITIC Bank Corporation Limited
1339.hkPeople's Insurance Co (Group) of China
0939China Construction Bank Corporation
2628China Life Insurance Company Limited
1988China Minsheng Banking Corp Ltd
3968China Merchants Bank Co., Ltd.
0941China Mobile Ltd.
2601China Pacific Insurance (Group) Co., Ltd
0386China Petroleum & Chemical Corp
0914Anhui Conch Cement Co Ltd
1088China Shenhua Energy Company Limited
0728China Telecom Corporation Limited
0762China Unicom (Hong Kong) Limited
1398Industrial and Coml Bank of China Ltd
0857PetroChina Company Limited
2318Ping An Insurance (Grp) Co of China Ltd.
2328PICC Property & Casualty Co., Ltd.
2333Great Wall Motor Co Ltd
0700Tencent Holdings Ltd
1211BYD Company Limited
0392Beijing Enterprises Holdings Limited
1880Belle International Holdings Limited
1114Brilliance China Automotive Holding Ltd.
1766Csr Corp Ltd
1359China Cinda Asset Management Co Ltd
1898China Coal Energy Company Limited
1800China Communications Construction Co Lt
6818China Everbright Bank Co Ltd
0384China Gas Holdings Ltd
0916China Longyuan Power Group Corp Ltd
2883China Oilfield Services Limited
1186China Railway Construction Corp Limited
0390China Railway Group Ltd
1109China Resources Land Limited
0836China Resources Power Holdings Co. Ltd.
2202China Vanke Co Ltd
0489Dongfeng Motor Group Co. Ltd
6837Haitong Securities Co Ltd
1044Hengan International Group Co. Ltd.
0902Huaneng Power International Inc
0135Kunlun Energy Company Limited
0992Lenovo Group Limited
1336New China Life Insurance Co Ltd
0168Tsingtao Brewery Co Ltd