Ensuring order: The temporary suspension on RSS activities was lifted from Jan 1, with the enhanced control measures to ensure stability and maintain investor confidence.Across the stock market, decliners have been thrashing advancers each day of the first trading week.
The short-selling pressure began to ease in the next two days, but again picked up pace on Thursday with a total short-selling value of RM275.32mil. With market conditions remaining uncertain as Covid-19 cases breached the 3,000-mark and a snap general election appears to be possible, one wonders whether the RSS suspension should have been extended further.
“The current pressure is only coming from RSS. The intraday short-selling has yet to come in, so there is more risk there, ” he adds. The capital market regulators first introduced the temporary suspension of short-selling activities on March 24 last year, barely one week after the FBM KLCI slumped by over 200 points in the March 11-19 period.
This is because policy certainty is necessary for market participants to operate within known parameters.“The Malaysian regulators’ stance so far is therefore well-justified, ” according to Yong. “However, the market has now significantly rebounded from Covid-19 lows to hover near pre-pandemic levels in the wake of massive government and central bankers interventions by introducing fiscal and monetary measures coupled with the multiple Covid-19 vaccine breakthroughs, ” he says.Ng points out further that short-selling is necessary in order to make the stock market more vibrant and to increase market liquidity.