Thursday, June 30, 2016

PSEi Price Fixing: Shocking Pump to 8,000 and then Dump back to 7,800! Has All These Been a Prearranged Inauguration Pump???

Before I present to you today’s shocking pump and dump let me first elaborate on what I said yesterday as

And each ‘correction’ has been met by even more vicious and or violent buying! And correction can’t seem to even happen within the day!

Following Brexit, global stocks suffered a meltdown which climaxed on Friday June 24th where US stocks slumped by over 3%.

The initial reaction of Philippine stocks was to intuitively echo on Wall Street’s fall. The PSEi dumped 1.8% at the opening bell.

As regional markets were bloodied, some local entities decided that losses would not be permitted for Philippine stocks. So a series of pumping took hold. 

Why would a rational investor engage in panic buying when they can buy at more reasonable prices, especially under a risk off circumstance?

Who would initiate a series of violent pumping actions if not in anticipation of immediate price increases? Or if not to fix the market? And if the former, then why should a price surge happen at all? Somebody found the fountain of youth?

And we are not talking of one or two stocks; we are talking about the headline index. And for the PSEi to respond dramatically means that there had been a concerted and coordinated buying spree across the majors! That is, the violent upside move by the PSEi represented an organized or syndicated set of actions! In short, this was all about the gaming the index.

So the PSEi reversed its 1.8% loss to close the lunch recess at all square.

Then the “afternoon delight” became operational post lunch break. Not content with the .63% gain, the price fixing operators ensured that gains had to be material—so the .5% marking the close! Total gain of the day 1.13%!

All in all the Phisix had a fantastic intraday 4.73% swing!

And note that extraordinary fluctuation came with only Php 6.8 billion inclusive of block trade!

Whoever did these wanted to make a statement: the PSEi is INDOMITABLE!!! (for whatever reasons)

Then came yesterday’s intense 1.72% pumping backed by only Php 7.6 billion of trade!

So in three days including Tuesday’s -.63% correction, the PSEi generated a return of 2.2%!

Well, today was supposed to be another follow through.


 
Riding on the coattails of a big rally in Wall Street and the inauguration of the new administration, the PSEi lunged to a flabbergasting 2.33% intraday gain at the early session which it held for most of the day!

Market participants believed that the Phisix had reached a nirvana! And at such level, it was just a little over one hundred points away from April 2015’s 8,127.48!

However things reversed coursed at the close.

Frenzied pumping turned into frantic dumping!

The PSEi found itself in down by as much as .38% at the last minute prior to the market intervention phase. The early 2.33% ramp had all vanished!


Hoping to contain the damage and rescue whatever was left of the euphoria, index managers applied CPR, they used marking the close to push the index back to just -.03% down! 
Overall, the PSEi had another monumental pendulum swing totaling 5.39%!

This is no stock market. This is a rigged casino!

All major indices were down. Yet price fixers used several firms representing the respective mainstream industries:

Banking: MBT had a shocking 5.2% marking the close to suddenly end up by .39%! Yes this means MBT was down by 4.81% and had to be bailed out!
Services: TEL suddenly soared to close up by 1.9% following a stunning 2.2% maneuver!
Property: SMPH also abruptly closed 1.11% from a 2.82% push! Yes SMPH was also down by 1.71% prior to the close!

And peso volume was at a hefty 15.36 billion! This means that sellers suddenly emerged!!!

If all these represented “part of the prearranged inauguration backdrop for the new administration” as I said last night then what happens now?

There is no such thing as a free lunch.

Since the post election, specifically May 10, a total of Php 360 billion of peso turnover (or Php 9.5 billion in 38 days) had been involved in the pump the PSEi to 7,800.

Who financed this? And how was such stunning meltup been financed? Have these been through bank credit?

And what happens to all those who bought from the top if financed by credit? If the PSEi falls, will such loans be called upon? Will these trigger liquidations that would set about an avalanche of selling?

This seems like déjà vu.

At the post April’s 2015 record, aside from a wish for 10,000 at the end of his term, the former president paid a visit to the PSE.

I pointed at the foreboding signs of mania in climax (May 3, 2015)

Here is a trivia, aside from being heads of states of two of the largest ASEAN nations, what does Philippine President Aquino and Indonesian President Widodo share in common?

Well the answer is that both presidents graced their respective stock markets in April where both indices had been at record highs. In addition, both political leaders delivered their desired targets for their respective stock markets during the said occasion.

The above was actually a follow up on my earlier warning (April 19, 2015)

I am reminded of the fateful BW bubble that turned into a scandal. BW’s preposterous 52x run climaxed with the visit of Macau’s casino mogul Stanley Ho to the PSE. This eventually was followed by the stock’s monumental collapse back to its origins!

Manipulating the markets in order to please politicians…will history repeat???



 

 

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