Wednesday, 2 December 2015
Wantan Mee Case Study: How Investment Bank Protocols Affects Traders
Once a company not able to submit its Quarterly Report, the counter will be suspended after 5 trading days in Bursa. Take Wantan as a case study, assuming 30 Nov last day to submit and Wantan failed to do so. Add another 5 working days is 8 Dec to be suspended from trading. 7 Dec is the last day to trade. What does it mean?
If you see the price this morning, it was dived to lowest 0.045. Why? Once the counter confirmed to be suspended on 8 Dec, today all the Credit Controllers natiowide irregardless of broking houses will impose a condition which is BUY ON CASH in the Trust Account only. Cheques are not acceptable. In another word which we are familiar with is 'designated counter' (bursa term).
First issue, today cash upfront buy is T+0. next Tuesday 8 Dec is T3 so the buyer confirm must have cash in the Trust Account to pick up the shares once the counter is suspended. You will be a shareholder of a suspended listed company. The panic occurs and people dumping the shares from 0.065 to 0.045. NO CASH NO TALK WILL LIMIT THE GORENG KAKIS/TRADERS TO ENTER THE TRADE. It works the same for the PDTs.
2nd issue, this one you MUST TAKE NOTE. Once it reaches 4.pm to 4.45pm, 2nd wave comes. Those who trade/operate with Margin Accounts / Limits from Remisiers or Limits from Paid Shares in CDS will not be able to continue to roll. Once force sold you can't buy back as you do not have CASH IN THE TRUST to continue to buy. All lines will be jammed.
There are key board warriors out there saying the bosses wanted to press down the price and submit the Quarterly Report by Monday so that they collect cheap ask you continue to hold and buy more to average down. I do not have the crystal ball with me to answer this question. I suggest not to speculate base on own opinion and defamation to the bosses that pressing their own share prices. The decision to trade should be solely yours.
The article is to share the protocols of stock broking houses on controlling the credit limit at the same time for education purpose. It is not a suggestion for members to trade or not to trade certain counters.