Why Sources Must Be Quoted In A Financial News.

The following are comments posted on the blog posting, Rumours Why Gamuda Shares Is Moving Higher!

1. bursatradingideas said...
My friend,Seriously, if it's misleading to the uninformed, it's irresponsible reporting.

2. Victor AY said...
The quality of reporting by The Edge had become bad to worse. This is not the 1st time they had cite unnamed sources about the issue. Another perfect example of buy on rumour and sell on fact...let's hope whoever done this be investigated by SC...where's the justice ?

3. Fesserie said...
From my experience with Bursa and several counters that are in the midst of corporate restructuring. There is no smoke without fire!Usually, the prices and details of the deal that you read in the media is a watered down version

4. Fesserie said...
Dear Moola,The press is a medium for various parties to further their interests.Insider trading is evident everywhere,just that is is more rampant in Malaysia.Moreover, publishing such "rumours" in the press will jack up the share price, thus giving the seller more bargaining chips.

5. Fesserie said...
From what I can see, the regulatory authorities has not initiated any actions against the various prepetuators. Perharps everyone is making good $$ from it?

6. The Great Game said...
Ever since Moola highlited this "according to sources" issue, I have paid attention on this unnamed sources on the international financial papers that I read regularly. No real surprise, even Wall Streets Journal and Financial Times do use this unnamed sources for imminent / possible M&As from time to time.The only publications that I have yet found any "unnamed source" is Economist, which is understandable since it's a weekly publication.

Talking about rumours, there's this conspiracy theory behind Bear Stern's collapse by Byran Burrough (the author of 'Barbarians at the Gate'), where claimed Bear Stern was literally killed by rumours.

http://www.vanityfair.com/politics/features/2008/08/bear_stearns200808

Rumours are just part and parcel of the game.Maybe some person with the relevant legal knowledge could correct me; but one only consitutes 'insider trading' if he actually use the information for profiteering; actual leaking in itself does not constitute any 'insider trading'

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I would like to respond to The Great Game's reply here for it feels extremely crowded in the reply page for the original posting.

Dear Great Game,

1. I do not see the need to compare yet again.

Yes, rumours always existed but why should our financial press be used as a tool to distribute the rumours?

2. My issue is on these Unnamed sources.

If the financial press insists on publishing a news based on rumours, why aren't they brave enough to quote their sources? Why? Are they afraid they the story carries no weight?

So all I am asking is 'Where's the credibility to the news when the source is NOT named'?

Take a political news. Is there any credibility to a political news when it's quoted based on unnamed sources? The answer is none.

So why should it be different from the stock market?

In the financial market, when a stock is driven higher because of news from some unnamed sources, how would we know if the story is NOT cooked for one's personal interest?

In the financial market, when a stock is driven higher because of news from some unnamed sources, how do we know if the story is not fabricated and used as tool to drive stock higher?