I had referred in particular to what happened on 21st March 2001 when the local bourse had earlier in the day plunged to a 23-month low of 638.5 points in early trading after investors dumped heavyweights, but at the end of the day’s trading, the KLCI rebounded strongly to close at 673.24 following institutional buying of the Big Three “TMT” stocks - Telekom Malaysia Bhd, Malayan Banking Bhd and Tenaga Nasional Bhd - especially in the last three minutes of trading.
It had been conservatively estimated that RM19 million worth of purchases for the Big Three “TMT” stocks took place in the last three minutes on 21st March and that in the last 30 seconds, the KLCI was pushed up 13.18 points from 660.06 to 673.24.
Such institutional manipulation of the KLSE in the last few minutes of trading again took place on Friday, 23rd March 2001, when some RM16 million of institutional interventions through the TMT stocks in the last two minutes before the end of trading pushed up the KLCI by two points in the last 30 seconds from 667.26 to 669.27 at 5 p.m.
The three government-controlled TMT stocks of Tenaga, Maybank and Telekom together make up almost 40 per cent of the index's capitalisation and wield a powerful influence on market direction.
Last Friday KLSE executive chairman Mohd Azlan Hashim denied that there had been price manipulation in blue chips to shore up a sliding Malaysian market.
He said: "When you talk about movement in the marketplace, it is not really that unusual or something that you don't expect to see."
He said the KLSE surveillance and investigation divisions monitored the market continuously and would investigate the situation if warranted.
I am flabbergasted by such complacency shown by the KLSE executive chairman which is not calculated to enhance public confidence in corporate governance and integrity of the KLSE.
Yesterday, such last-minute institutional manipulation of the stock market to boost up the KLCI before the end of trading again took place where over six million ringgit purchases of the TMT stocks pushed up the KLCI in the last minute of trading by 4.77 points from 645.97 points at 4.59 p.m. to 650.74 points at 5 p.m.
If not for the last-minute RM6 million institutional intervention to purchase the TMT stocks, jacking up the KLCI by 4.77 points, the KLCI would have ended yesterday lower than Friday’s index of 646.13, which would not look good especially when the Prime Minister, Datuk Seri Dr.Mahthir Mohamad would be presenting the Third Outline Perspective Plan (2001-2010) in Parliament today.
It is not very flattering for the transparency and integrity of the KLSE that it could be so easily manipulated just to create the “feel good” atmosphere for the Prime Minister to present the OPP3 in Parliament!
Indeed alarming questions are raised by yesterday’s last-minute institutional
interventions to buy over RM6 million TMT stocks, as illustrated by the
Stock 4.59 pm 5 pm last-minute last-minute
KLCI 645.97 650.74 4.77 pts
Tenaga RM11.60 RM12.10 200 lots
Maybank RM12.40 RM12.60 500 lots
Telekom RM11.60 RM11.70 200 lots
Questions crying out for answer are:
Despite the denial by the KLSE executive chairman of last-minute institutional interventions in the KLSE to manipulate the KLCI, I understand that such stock market manipulations have been going on for the past few months.
The Securities Commission and the KLSE must act firmly to protect their own credibility as well as the transparency and integrity of the stock market by launching a comprehensive inquiry into stock market manipulations, particularly in the last few minutes of trading in the past three months.
I propose meeting the KLSE executive chairman Mohd Azlan Hashim on these market manipulations and to ask for the records of all stock market trading in the last few minutes in the past few months, as KLSE possesses such records - unless these information have suddenly become a state secret under the Official Secrets Act.