Several things first.
1 The convulsion of interbank rates of China (SHIBOR) and Hong Kong (USD CNH HIBOR) continues, that’s with the exception of the overnight rates, both which appears to have partially retrenched. In short, banks in China and Hong Kong continue to experience, not only unresolved liquidity issues but which strains appears to be worsening.
2 US stock markets have gone virtually vertical. Such actions appear to have tracked the post-election run in the Philippines, or could even possibly transform into a BW-SSO blow off phase.
3 Ironically, such post-election meltup have occurred even as US LIBOR rates continue to soar across the curve 1 month, 3 month, 6 month and 12 month.
Like China, these are signs of liquidity strains, which have been ignored by the stock markets.
4 US stock market meltup appears to have spilled over to Europe, Japan and to some emerging markets.
5 This morning I wrote to you to say that the meltup in the US may be taken as a cue to PRICE FIX the index
Oh, have you seen how the PSEi was pumped yesterday? Like clockwork, immediately right after lunch, the afternoon delight went into operations. So from unchanged, the PSEi rocketed to .71% just right before the runoff. The marking pump brought the end of the day gains to .89%. This would have been larger considering huge pumps on SMPH and GTCAP, except that there had been offsetting forces. With US stocks on a meltup, more of this can be expected today.
It's more evidence how the stock market function of PSE has been lost and perverted. And in its place, a price fixing mechanism.
My suspicion had been confirmed.
First, today’s action was almost a complete replica of yesterday.
Synchronized pumping occurred immediately post lunch [see technistock charts with .89% (December 7) and 2.27% (December 8) close.]
And it’s not just yesterday but in most sessions that encountered wild pumping.
Second, unlike yesterday’s muted marking the close, today’s .73% could be ranked among the top 20 biggest since 2014!
Third, the meat of the .73% pump came from 5 out of the top 12 largest market cap issues (see rightmost window).
Fourth, if I am not mistaken this week’s price fixing pump could be the largest for a FOUR Day operation ever! And notice that the pump and dump occurred on the same issues the last few days.
The daily breakdown of mark the close: Monday -18.57, Tuesday +35.9, Wednesday +12.57 and today (Thursday) +49.51
The total four day (3 pumps and 1 dump) was 116.57 points or 1.7% of Friday’s close at 6,886.74.
The pump for the three days was 97.98 points or 1.4%. The net pump for the four days was 79.4 points or 1.2%
For the four-day week, the PSEi has soared by +1.97% (from last Friday). With a net pump of 1.2% this means that 61% of the four-day gain was due to PRICE FIXING!!!!!
Need more proof that the Philippine stock market has degenerated into a price fixing mechanism????
Yet technicalities (trading program) can’t be used to justify present actions. The magnitude and frequency of these synchronized and collusive actions should prove of the deliberate design to game the system.
Moreover, as explained here before, bourses that carry the same Nasdaq OMX trading platform as the PSE (e.g. Malaysia, Bahrain, Turkey, Latvia and more) hardly experiences the same phenomenon. It would seem that these activities occur with startling regularity only in the Philippines.
And because the cost of price fixing is low, hence price fixing has become ever more rampant. Current developments suggest of acceleration of intensity compared to 2015.
And as any student of the market would understand, price fixing essentially demolishes the very essence or function of the markets. And this is what the PSE has regressed into…the pursuit of prosperity through deception, manipulation, and fraud.
Finally, when the PSEi has been sold, media would say “most expensive in Asia”. Curiously, people never seem to ask WHY the PSEi is expensive.
Yet the answer unfolds right before their eyes, day in and day out.
I know, I may be a small voice in the wilderness. Nonetheless, as the Jewish philosopher, Rabbi Moshe ben Maimon wrote in “The Guide for the Perplexed Book 2”
Truth does not become more true by virtue of the fact that the entire world agrees with it, nor less so even if the whole world disagrees with it."
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