Stocks ready to rally now since the worst is over?

CNBC: Just the potential for a U.S. recovery will bring the "enormous" amounts of under-invested cash back into the stock market and could send shares higher in the near term, Philip Manduca, head of investments at ECU Group told "Squawk Box Europe." "I do believe there is a sentiment out there, right or wrong, that the US is going to recover," he said. "There is this feeling that the worst is behind us in terms of the housing market … and there is a feeling that economic indicators that are coming out (of the U.S.) are less bad than they were estimated to be.""I know that there's an enormous amount of money on the sidelines that is under-invested… if you get any further rally in the US market it will self-propel," Manduca added. Inflation in the U.S. and Western Europe is not domestic, but imported and this may bring relief to investors who may expect central banks to embark on an easing cycle, Manduca added. But economic growth prospects are still gloomy and getting into the equity markets is still tough, he said. The current correction in the price of oil shows that speculators have driven the market for the past six months and they were allowed to do so because it was one of the few areas where banks were still making money, he said. But commodities prices will remain high, with the price of oil depending on how much Asia, and especially China, will slow down in the following months, Manduca added. "I don't think they can slow down. They need growth to stay in power in China," he said. "We're going to have to deal with high commodity prices for some time."

MyTake: I must say technically, the S&P500 charts are showing some upside potential and could build up to be a short term rally within a bearish long term trend. However I dare not say for markets in HK and Malaysia. Is the worst really behind us? The crude oil prices have gone down more than USD30 or 20% while commodities prices are all at their lows. Although the latest GDP growth figures for most of the countries are lowered, many are seeing their CPI peaking somewhere in July. Can we safely say inflation is almost out of the way and Central Bankers should now just concentrate of economic growth and recovery? Will the markets rally on such scenario or will they firstly evaluate the extend of the damage of the housing maliase, subprime mortgage problems to the credit market and economy and slow down of economic growth and inflationary effects to the bottom lines of companies before rallying? Based on what has happened over the past 1 year, we should not be too happy yet even though commodity prices have gone down as it could be just temporary. We are still in an adverse economic condition which should be viewed as cyclical. Lets be patient and let the issues play themselves out..(similar for politics).

* Why did Russia attacked Georgia? Provoked, economic interest or wielding of power?

* Bloomberg: Australia's business confidence index remained unchanged at -9 pts in July, matching the weakest results since Sept 11, 2001... Central bank estimates growth this year will be at 2% (2007: 4.3%)... Australia's dollar continues to decline for the 11th day(longest losing streak since 1975) ...1AUD:USD87.88

* China's latest economic indicators-PPI for July 10% (June 8.8%)...CPI July 6.3%(June 7.1%)...Trade surplus July USD25.3b (June USD21.3b) Real improvement...sustainable???

* Top Cat: "Malaysia's growth for the 2nd half of the year won't be as good as the 1st half but it's still going to be positive and still a decent growth figure". On the coming Budget: "Won't be burdensome and would not be unfriendly to anyone" yah...blah..blah..blah..meow meow meow

* UBS losses USD329m(4th straight quarter loss) on subprime -related write downs. JP Morgan poised to write down the value of mortgage backed assets by at least USD1.5b this quarter after credit market turmoil and the US housing slump deepened.

* Redtone to roll out WiMax on August 20 in Kota Kinabalu only. GPacket already soft launched its WiMax 2 weeks ago...successful?

Technical Analysis - August 11 2008

S&P500 (1,296, last week 1,260 or +2.9% w.o.w)

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The daily charts; especially the MACD/daily DMI(+ and -) continue to improve during last week. The daily DMI(+ and -) have just turned bullish with an early positive crossover. The DMI+ is now above the ADX indicating positive uptrend although it may be a bit early to confirm. It has managed to stay above the major resistance line of 1,280 and for this week it must stay above 1,295 to maintain in the 2nd level uptrend channel line mentioned last week. The weekly charts although improved are still a long way off from a positive uptrend. The index is likely to trade between 1,260 and 1,330.

KLSE CI (1,120, last week 1,159 or -3.4% w.ow)

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The daily MACD although still in a positive crossover has weakened substantially after a week of selling and the DMI (+ and -) were not able to sustain the early positive crossover and have now moved away from each other indicating weaknesses. The weekly charts have also worsened. The index needs to work hard this week to avoid falling into bearish mode again. The index is expected to trade between 1,100 and 1,190. Strong support is seen at 1,120 - the 200-day ema.

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HangSeng (21,885, last week 22,863 or -4.2% w.o.w )

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After a week of volatility and persistent selling, the daily MACD chart has shown some early bearish signal last week as it has just turned into a negative crossover and a negative MACD Hist. The DMI(+ and -) and ADX lines have also weakened substantially during last week. The weekly charts have also worsened. The index needs to work hard this week to avoid falling into bearish mode again. Immediate support is at 21,600 while resistance at 23,000.

Nikkei 225 (13,168, last week 13,095 or +0.6% w.ow)

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The daily MACD chart is still positive while DMI(+ and -) continued to break away from each other during last week. The weekly MACD although is now at the crucial stage of hooking down still managed to stay afloat for now. The weekly MACD has been on a positive crossover since April this year. The index is expected to trade between 13,000 to 14,000 The index needs to work hard and maintain above 13,300 to show some uptrend possibilities.

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* Shanghai Stock Exchange CI drop another 5% today.....no olympics rally but olympics lari..

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* Goldman Sachs believes China's economy will be slowed instead of stimulated the next 2 months by the Beijing Olympics Games and Paralympics because the restriction on construction, factories, cars and mining to cut pollution will be a "short term" drag on economic output.

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* BT Singapore: Singapore's economy grew at the slowest pace in five years. The GDP expanded by 2.1% in the 2Q, after growing 6.9% in the 1Q.

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* The Edge: Tourism Malaysia expects to attract 21.5m tourists this year, 1 million short of initial target resulting a potential RM2b losses in foreign receipts.

Smart Investing/Trading for the week ending August 8 2008

US Markets Update and Outlook

Stocks look to build on oil, dollar-induced gains

Dollar surge, oil slide could provide needed fuel for August rally

Marketwatch: Stocks will attempt next week to build on strong gains, with an eye on economic, inflation and retail sales data that might further boost the dollar and pressure oil and commodities.The past week saw "a virtuous cycle playing out, with the dollar rally and oil sliding," said Alec Young, equity market strategist at Standard & Poor's. "We can tack on more gains next week, especially if we get good news on the economic front." Of particular interest will be the U.S. retail sales figures for July and weekly crude oil inventories data due out Wednesday. On Thursday, investors will key in on consumer price figures from both the U.S. and the eurozone. On Thursday, retailer Wal-Mart Stores is scheduled to report earnings. Stocks rallied Friday with the Dow Jones Industrial Average gaining 302 points to 11,734. The S&P 500 index rose 30 points to 1,296, while the Nasdaq Composite added 58 points to 2,414. For the week, the Dow added 3.6%, the S&P 500 rose 2.9%, while the Nasdaq gained 4.5%.

Slowing global growth = a dollar rally, sliding oil

In a delayed reaction to the credit crisis and the weakening U.S. economy, signs of slowing global growth, from Japan to Europe, have accumulated recently. While the dollar had taken the brunt of the pain since the credit crisis started just about a year ago, the U.S. currency has already begun to shown timid signs of stabilizing and even firming. The euro, however, had continued to advance amid expectations that the European Central Bank might further hike interest rates to contain inflation. Over the past week, however, currency markets had their chance to adjust after the ECB left interest rates unchanged Thursday and signs that Italy might be near recession. The euro plunged and the dollar rallied sharply, fueling expectations that the U.S. currency might be on the rebound for good this time.

Another bear-market rally?

A rallying dollar and sliding crude oil could almost make investors forget the year-long credit crisis, the U.S. housing slump and concerns that the economy might be in or near recession. But some strategists believe that the feel-good factor, along with temporary regulations to protect the battered stocks of key financial firms, might be enough to propel the market higher through August.

Weekly KLSE CI Technical Update and Outlook

I Capital on Demand Index. This powerful technical indicator has formed a bullish divergence with the KLCI. The last time this happened was in the bearish days of 1998 and during the depths of the SARS crisis in 2003. As we all know, the KLCI staged powerful rallies after the Demand Index became bullishly divergent in those 2 times. With the global stock market bottoming out, I Capital believes there is a good chance the KLCI will perform the same again this time.


* Still the same after 50 years of independence. On Bar Council's forum "Conversion To Islam" generated very Racist remarks.....sigh!

* Alliance Research- KLSE market capitalisation is almost 1.7X of GDP against the average of 1.54X, indicating the stock market is expanding faster than GDP. Also, based on current money supply M1/M3, it can support the market at 1,100 points.

Eight Eight Eight

Picture: ChinaDaily


After a long 7 years of waiting, the coming out party for China begins today. The 29th Olympics -One World, One Dream starts tonight at 8.08pm and will only ends on the 24th August. For our information, I refurnish below "Beijing Olympics by the numbers" which was sourced from The Sun(via Graphic News- BOCOG, Kyodo News, Beijing Municipal Government)

8:08pm, 08/08/08

Time and date of the opening ceremony of the 2008 Olympic Games-eight is a lucky number in China

10,500

Number of athletes

302

Gold medals in 28 sports at 37 venues

2 million

Visitors expected

USD37.6b

Record cost of stadiums and transport infrastructure-more than twice what Greece spent on 2004 Athens Olympics. 12 Beijing venues are new, 11 are existing facilities, and 8 are temporary

USD300m

Amount to be spent on security. Security for 2004 Games cost USD1.4b

100,000

Police deployed, backed by 600,000 volunteers

1.5m

Beijing tenants evicted to clear way for venues and other facilities-one in 10 of Beijing's population

70,000

Number of Olympic volunteers

3.3m

Number of cars expected on Beijing's gridlocked streets during Olympics

Some other mind boggling numbers- 205 countries to participate

15,000 performers and 29,000 firework shells to be used for the opening

* No party for Shanghai Stock Exchange- The index close down 4.5% to 2,606 points.

* Jakarta is to consider longer time of over 3-5 years for Maybank to par down its shareholdings to get Bank Negara to approve the deal. Meanwhile analysts in Indonesia have downgraded BII ranging from Rp200-Rp375. Maybank's price was Rp510.

* InternationalHeraldTribune: Britain's economy is in worse shape than most in Europe, with the exception of Spain and Ireland, because its heavy reliance on two industries that currently struggle the most: housing and financial services.

* China's currency on Friday fell against the strengthening USD for the 9th consecutive day.

* FT.com: The Euro fell to a fresh seven week low against the USD and European government bonds rose sharply as concern about the outlook for the Euro Zone economy intensifies aided also by Trichet's worry.

Olympic cheers, Markets in tears

I have been having problems with the internet connection at home lately. Hope the connection will be restored soon especially during the weekend.

Our KLCI has not been performing well this week, and relatively, it is worse than many other markets. For the passed 4 days, the CI has lost about 30 points mainly due to political uncertainty and sell down in plantation stocks. Looking at the Dow Jones which plunged 225 points this morning, our market(and others of course) is in big trouble heading towards Olympics. The charts above especially the daily MACD shows that it is in great danger of giving up its uptrend assault if the next few days of trading remains in the negative. This will practically ends the 2 weeks uptrend cycle first created since July 23(please refer here). The support is seen at 1,100 and 1,050. Sigh...we may just have to watch the Olympics and let the markets and politics play themselves out then...Arr how many golds do you think China(or Malaysia) will get this time ah??

* Still more bad results: Axa, Toyota and Barclays earnings are all down by at least 30% in their latest earnings release.

* Reuters: Japan's July forex reserves rose slightly to USD1.007T (June USD1.001T and a year ago USD923.718B).

* Bloomberg: NZ's unemployment reaches 2 year high at 3.9% in the 2nd quarter due to jump in job seekers. Australia's latest jobless rate is at 4.3%.

* Bank of Korea unexpectedly raises interest rate to 5.25% to curb inflation, its highest rate in 7 1/2 years. Inflation stood at 5.9% in July as compared to the Central Bank's target of 2.5-3.5%.

* BT: Credit Suisse keeps their "UnderWeight" rating on the Malaysian market.

* TheStarOnline: MSWG to Maybank's directors: Get the deposit RM480m back or resign!!

Letting off some hot air only?

Many analysts have turned bearish on the plantation sector. They are maintaining their underweight call and are keeping their crude palm oil assumptions of between RM2,500 to RM3,000 per tonne. (refer here - analysts' rationale). However, some says the fall is only temporary and the "hot air balloon"(and not bubble) is just letting of some hot air for the onslaught upwards again. Jim Rogers is one of them. (Refer here also for some of his other predictions). I tend to agree with him as historically, commodities bull cycle generally last at least 20 years!

Bloomberg: Jim Rogers, who in April 2006 correctly predicted oil would reach US$100 (HK$780) a barrel and gold US$1,000 an ounce, said the fundamentals for commodities are ``astoundingly'' good.The bull market for commodities "has a long way to go,'' said Rogers at an investor conference in Australia. The bull market may end by 2020 based on historical cycles, he said. The Reuters/Jefferies CRB Index had its biggest monthly decline in 28 years in July reversing course after its best first half in 35 years. "We are going to have plenty of setbacks in commodities but when they happen please keep your heads about you, do some more homework, and if you decide that thing is still OK I would suggest you might think about buying more commodities,'' Rogers said.

* Anwar to be charged tomorrow for Sodomy No 2. We have a government which is very "obsessed" with Anwar and thinks of nothing but how to stop/silence the man himself. This is definitely very wrong.

* Australia central bank signals first rate reduction in 7 years. As noted yesterday, the drop in the commodity prices will put more pressure on the AUD.

* S&P has upgraded Malaysian shares to"Market Weight" (ie Neutral) from "Under Weight". It also targets KLCI to hit 1,400 points from earlier estimate of 1,300 points.

* Bloomberg: More reported losses. BNP Paribas's (France's largest bank) 2Q net profit fell 34% as it wrote down debt backed by bond insurers and increased risky loans provisions. Cathay Pacific reports first half yearly loss in 5 years on record jet fuel costs.

AUD and commodity prices

Below is an interesting read on the correlation of AUD currency and commodity prices.
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DailyFx: The Australian dollar has fallen significantly through recent currency trading, as the highly commodity-sensitive currency continue to trade lower on a similar tumble in gold and other commodity prices. The Reuters/Jefferies CRB index registered its single-largest daily loss since March—driven by a $4.30 dive in crude oil futures. Given that the Australian Dollar previously rallied to post-float record highs on similar heights in major commodity markets, it is perhaps little surprise to see the AUDUSD fall significantly on the recent downturn. In fact, the Australian Dollar currently holds its strongest year-long correlation to the CRB Index since the currency’s free-float in 1984.
A cursory look at year-to-date charts comparing price action in the Australian Dollar and the CRB Index only emphasizes this point, and we see that the currency remains highly sensitive to the trajectory of the widely-followed commodities benchmark index.

A year-to-date regression on the Australian Dollar and Gold Prices suggests that the Australian Dollar stands to lose 0.25 percent for every 1 percent drop in the COMEX Gold contract.


Given such a dynamic, it will be more important than ever to monitor day-to-day changes in gold and other commodity standpoint for the Australian dollar trader. A shift in the secular uptrend for Gold Prices could lead to a similar shift in long-term trends for the Australian Dollar—leading it sharply lower against its US namesake.

* The KLCI dropped 20 points or 1.7% at mid-day today as major plantation stocks were under selling pressure again due to a big selldown in crude oil (below USD120 per barrel) and the Reuters/Jefferies CRB Index. Plunging prices for cocoa, natural gas and sugar sent the CRB Index of 19 commodities to its biggest one-day decline since March. The CRB index fell 3.4 percent to 401.98, which marks the largest slide since March 19. The gauge dropped to the lowest level since May this year.

* BT: Malaysia plans to use 500,000 tonnes of crude palm oil from its swelling inventories in the next 2-3 months to produce bio diesel to boost faltering prices of vegetable oil.

* BT: Foreign participation in the 1st half of trading(in terms of value) in Bursa is 42%(2007: 37%) Foreign ownership unfortunately has gone down to a low 20% (2007: 25%). As such, foreigners were net sellers for the 1st half of the year.

* Wall Street widely expects the Fed to keep interest rates unchanged tonight as the central bank grapples with a faltering economy, shakey financial system and higher prices.

* Bloomberg: Indonesia's central bank raised its benchmark interest rate for a fourth straight meeting to tame inflation. The interest rate has been raised to 9% after a 0.25% rise.

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* Poor banking results- HSBC(Europe's largest bank by market value) drop 27% in 1Q profit to USD7.7B on US defaults. Societe Generale 's profit falls 63% in the 2nd Q write downs on investment losses. Mitsubhishi UFG's profit declines by 66% as bad loan costs soared.

Technical Analysis - August 04 2008

S&P500 (1,260, last week 1,258 or +0.16% w.o.w)

The daily charts; especially the MACD continues to improve during last week albeit slower. The daily DMI(+ and -) has not shown any positive crossover yet and in fact they move further apart. The weekly charts although improved are still a long way off from a positive uptrend. The index is likely to trade between 1,232 and 1,330. Major resistance is seen at 1,280 as it tries to stay above the newly created 2nd level uptrend channel line. (refer charts above)

KLSE CI (1,159, last week 1,142 or +1.5% w.ow)

The daily MACD continues to remain on the uptrend and the DMI (+ and -) has just turned positive yet. The daily stochastic indicator shows that it may have a technical correction in this week. The weekly charts have shown some improvement but nothing concrete just yet.The index is expected to trade between 1,120 and 1,190. Strong support is seen at 1,142.

HangSeng (22,863, last week 22,741 or +0.5% w.o.w )

The daily charts especially the MACD continues to improve while the daily DMI (+ and -) has also shown a slight mix of positive/negative crossover during last week (indicating a very volatile week). The weekly indicators have not turned positive yet but it have since shown a slight hook up and improving. Immediate support is at 21,900 while resistance at 23,500.

Nikkei 225 (13,095, last week 13.335 or -1.8% w.ow)

The daily MACD chart is still positive albeit weaker while DMI(+ and -) did not maintain a positive crossover as they break away from each other during last week. As a result of the weakening daily indicators, the weekly MACD is now at the crucial stage of hooking down. The weekly MACD has been on a positive crossover since April this year. Short term players may be cautious this week and may leave the market if the daily indicators deteriorate further. The index is expected to trade between 12,500 to 14,000. 13,500 is a tough resistance to break but if it is broken, the chart will be on an uptrend again.

* CNBC: South Korea's foreign exchange reserve fell by a record amount in July as Authorities have sold about USD15b to prop up the won.(The reserves for July USD247.52b, June USD258.10b) South Korea's reserve is ranked 6th in the world after China, Japan, Russia, India and Taiwan.

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* Write-off No 1: Perwaja Holdings Bhd will write-off RM550m accumulated losses via capital reduction towards the year end by reducing its paid up capital from RM1.22b to RM787.78m. According to Perwaja's MD: "It is a cosmetic change. Potential investors can rest assured they are not buying into Perwaja's accumulated losses, the NTA is clean". Perwaja' shares will be listed on the 20th this month at and IPO price of RM2.90 per piece. According to Aseam Bankers(refer here), Perwaja's fair value is RM4.50! So good ah?

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* Write-off N0 2: TheEdge-Axis may have to write-off RM161m as auditors could not find enough evidence on the recoverability of amount owed by its contract manufactures and others mainly from Vietnam and Cambodia.

Smart Investing/Trading for the week ending August 1 2008

US Market Update and Outlook

U.S. stocks look to Fed for direction

MarketWatch: Stocks will turn to the Federal Reserve for direction next week, after the market's roller-coaster ride over the past five sessions reflected continued uncertainty over the problems still gripping the financial system and the economy. "The street had been a one up over its fears over the past few weeks," said Robert Pavlik, chief investment officer at Oaktree Asset Management. "We've been away from economic reports during that time," he said. But "now that earnings season is largely over, attention is turning back to oil and more fundamental reports." Key next week will be the Fed meeting on interest rates Tuesday. With oil prices sliding about $20 from highs above $147 in mid-July, expectations that the central bank will raise rates later this year have waned. The market is now pricing in a little over a 30% chance of a September hike. "The Fed meeting will be carrying a lot of weight," Pavlik said. "For a start, if we were to see a more hawkish tone in the Fed statement, and the dollar began to strengthen for good, we'd see more of a sell-off in the commodities."

Meanwhile, after 75% of S&P 500 companies already reported quarterly results, another 68 will report next week, including Dow components Procter and Gamble on Tuesday and insurance giant AIG on Wednesday. With 373 S&P 500 companies having already reported earnings, earnings are now expected to have fallen more than 20.4% in the second quarter, according to Thomson Financial. Financials are again the main culprit as earnings there are now expected to be 86% below the year earlier.

A crazy but flat week leads into August

The past week saw the market experience huge daily swings, with ailing financials and the broader market falling sharply on Monday after news of more bank failures the previous Friday. But financials rebounded Tuesday after Merrill Lynch announced it would offer $8.5 billion in stocks to cover investment losses. And the broad market continued to rally Wednesday, after the SEC extended rules to protect shares of key financial firms, including housing-finance giants Fannie Mae and Freddie Mac. But worries about jobs and the economy were back to the fore on Thursday and Friday. The Dow Jones Industrial Average fell 51 points, or 0.5%, to end at 11,326 on Friday. News that unemployment ticked up to 5.7%, while crude oil prices jumped back above $125 sapped enthusiasm on the first trading session of August. The broad S&P 500 index found late support from a rebound in financial shares Friday, but still ended down 7 points at 1,260. The Nasdaq Composite fell 14 points to finish at 2,310. For the week, the Dow lost 0.5%, while the S&P gained 0.2% and the Nasdaq finished flat. Similarly, the Dow eked out a slight 0.2% gain for the month of July, the S&P fell 1% while the Nasdaq advanced 1.4%.

KLSE CI Technical Update and Outlook

I Capital on weekly KLSE CI. It has continued to rebound this week, aided by the drop in oil price that has helped to improve the outlook for economic growth. Though its weekly MACD and DMI are still bearish, they have instead shown early signs of recovery and the grossly oversold weekly RSI has also turned neutral. With its long-term ascending trendline still holding up, I Capital believes that the KLCI is in the process of bottoming out.

* Oh I see...since the rationale for Axis's big selling was probably due to insider information(major shareholders selling ahead of bad news-financial accounts in dispute), will the authorities start going after the culprits for insider trading? So far companies reported to be having financial disputes with the watch dogs are JPX, Axis, HoHup, OilCorp, LFE, GPlus, Wimens, Fotronic. Also AturMaju? Expect more companies facing such disputes as the economy slows down and creative accountants gets more desperately "inspirational" and brave.

* US economy grows at an annualised rate of 1.9% in the 2nd Q 2008. (earlier estimates 2.3%)

* Euro Zone's inflation rose to 4.1% in July(ECB's 2008 forecast was 2%)

* S&P has just raised China's long-term sovereign credit rating to A+ based on its strengthening external positions.

* Bloomberg: China is restricting approval for share sales to arrest a decline in its stock markets. So far Great Wall Motor Co and 1/3 of the IPO applications were turned down.

* Reuters: This is rather surprising. Total Indonesian vehicles sales are expected to show a 55% jump to 59,500 units in July, a new record monthly high! Are the Indonesians doing so well that they are immuned to to the fuel price increase of 30% in May?

* Malaysian to enjoy lower petrol price in September as crude oil prices fall? I seriously think the implementation is not so easy as it seems. Also, forget about cheaper food as the middlemen have always some good excuse not to drop prices.

The dreadful call

After witnessing the sell down of Axis from RM1.66 to RM0.35 or -79% within 3 market days and finally seeing it suspended on the 4th day(refer here for other possible reasons), I have started to take a keen notice of the major losers during the trading hours. The main reason was to check whether there is any "domino effect" to other stocks. True enough, one counter that has been affected today was AturMaju(also attracted the attention of Bursa). Its share price plummeted from RM0.695 to RM0.395 or -43% nearing mid day.(refer price movement chart above) This prompted Bursa to issue an UMA Query(Unusual Market Activity) to AturMaju which the company promptly replied during lunch break. The reply was the usual stuff...not aware of this and that. So soon after market starts in the 2nd half, Aturmaju shares came up strongly and it created more than 5 million shares traded compared to its daily average of 30,000 shares! The "buyers" bought the shares till there were no more sellers available at the end of the closing bell! It closed unchanged as if nothing happened at RM0.695. What really happened to this usually illiquid and family owned stock which caused such volatility?

I ask myself whether AturMaju's selling was similar to Axis's which was one of the infamous 8 companies "related" to Global Trader sell down due to margin calls on accounts in March this year (discussed here before). Curiously, I search through the 8 companies' List of 30 Largest Shareholders because this is were I could find out more about the share margin accounts. In addition, the companies latest financial results and announcements were also scrutinised. Here are the glaring findings. Among the 8 companies, 3 companies stand out "calling". AturMaju has 25 largest shareholders whose shares are in margin accounts, Axis has 19 while RPB has 13.(RPB is "next"?) Does the sell down today and days before(for Axis) have something do with insider information or some of the shareholders are really having financial problems and as a result sell down of shares to redeem money back to the financiers? Having many pledge securities account holder in the top 30 list is "dangerous" as it creates a snowballing effect to the share price when these shareholders starts selling if something goes wrong. Remember these shareholders are taking loans to finance this shares. They would have to top up or face force selling. It will be worse if the share trading is illiquid. With respect to Aturmaju, could the reason why it recovered so quickly today is due to major margin shareholders propping up the shares above the margin call level to avoid the dreadful margin call? Will Bursa have a close follow up and reveal to the investing public the reason for such selling and volatility in the first place? It will definitely help to educate the investing public some of the unwritten rules in investment. Knowing Bursa, from the last Global Trader sell down, the findings will probably be no where in sight! MyTake: "Never invest in companies which are illiquid and especially so if they have a big number of margin accounts in its "List of 30 Largest shareholders"

* FT.com: The number of Indian companies listing on the London Stock Exchange is expected to jump by 20% (in which USD1b will be raised) as the Indian economy continued to struggle with inflation and slowing global growth.

* WSJ: General Motors is reducing its salaried head count by 5,000 or 15% of the company's white collar workforce by November as part of the planned cost cuts.

* Reuters: Taiwan's cabinet today approved China's institutional investors to buy into its market in a sign of improving business ties on both sides. "With money, you will gain respect and admiration". How true!

* AP: The US Fed said yesterday it will extend its emergency borrowing program for Wall Street firms by several months and the ECB and the Swiss National Bank will take a similar route. Also to note, the SEC has extended an emergency rule through August 12 to curb abusive short -selling in 19 financial services companies including Fannie and Freddie. Propping up the markets by force??