When the press publish an article insinuating a takeover based on 'un-named sources' and the stock flies to the orbit, how does one know if the journalist writing that article is NOT profiting from their mischievous 'financial' article which does not nothing but drives the stock up?
Yes, how do we know?
Now if this is the case, won't you want to be the journalist?
Hey, let's put it crudely, you buy the stock, you write junk based on 'According To Sources', the stock flies, you sell and you profit. And the following week, you repeat again.
How? Life is good or what?
Take this following 'real' and 'live' posting made the other day. The posting was made just before lunch break when I saw the news feed pop up in my screen and I then proceeded to make the posting: Should Our Financial Media Continue To Spin News To Drive A Stock Up?
- Newspaper publishes 'speculation' and the stock flies!
If it was a coffee shop market talk, perhaps it's understandable. However, when the weekly Financial papers keep churning out 'according to sources' stories and the stock flies the next day, don't you ever wonder?
Yeah... exactly! Apparently our financial media is just a tool to push stocks up!
However I do hope I am wrong on that!
EPIC surges on proposed privatisation report
The Edge Weekly reported Terengganu Inc approached some of the other large shareholders of EPIC to buy over their equity, which will then trigger a mandatory general offer that would ultimately lead to privatisation.
The stock chart...
The spike in volume on the 4th and 5th of August or on Wednesday and Thursday was very interesting eh?
Look at the chart below.
EPCI wasn't a very happening stock 'previously' yes?
So what would account for the spike in volume on the 4th and 5th? What was causing the interest on the stock on Wednesday and on Thursday?
Yeah, the inquiry mind really wants to know why!
Then on Friday, the 6th of August, the stock's volume and momentum picked up even more?
Was it known that the Edge Weekly was going to post a seductive letter insinuating a privatisation offer for EPIC?
How?
On the 9th August, Monday, the stock FLIES into orbit. The morning Financial Edge stokes up the fire by publishing EPIC surges on proposed privatisation report! (Nice or what? Their own weekly editiion publishes the seductive report and the daily edition fans the fire!)
EPIC the stock closes on Monday at 2.30.
And this stock on Wednesday and Thursday was bought by the bucketload between 1.88 and 1.98!
Like I said nice or what!
But then... for the chasers or the unsuspecting punters, EPIC denied the whole shenanigans!
- Bursa Securities has requested for an announcement to be released by the Company on the article appearing in The Edge Financial Daily, Page 12 dated 9 August 2010 titled “EPIC to be privatised?” to clarify on the following areas:“State-controlled Terengganu Incorporated Sdn Bhd (“Terengganu Inc”) is planning to privatise its 40.13% unit Eastern Pacific Industrial Corporation Berhad ("EPIC" or "the Company"), sources say.”“The Edge understands that Terengganu Inc has approached some of the other larger shareholders of EPIC to buy their equity, which will trigger a mandatory general offer and lead to a privatisation.” In this respect, the Board of Directors would like to inform that the Company is not aware of the privatization exercise by its shareholders, who have reiterated their respective denials pertaining to the said matter. The same matter was announced by the Company on 23 February 2009.
This news of denied was published on the Star.
- EPIC: No change in shareholding
Tuesday August 10, 2010EPIC: No change in shareholding
KUALA TERENGGANU: Petroleum supply base operator Eastern Pacific Industrial Corp Bhd (EPIC) has denied there will be a change in the company’s major shareholding soon.Chief executive officer Ramli Shahul Hameed said that since last Thursday, the company’s share price on Bursa Malaysia had increased from RM1.80 to RM2.30 a piece.
“We are happy about the rise in share prices. We deny that the increase has to do with a report in a newspaper last Thursday of an impending change in the company’s major shareholding,” he told Bernama yesterday.
Ramli said the rise in share price was due to the performance of the company, which achieved a 21% growth in revenue to RM109mil for the first half of this year compared with the same period last year.
“Pre-tax profit rose 31% to RM36.4mil from RM27.8mil previously,” he said.He said the good results were due to improvement in the company’s operations. — Bernama
How?
Are you impressed or not?
And then on the Business Times today...
- No offer to buy out Epic stake: AZRB
By Francis Fernandez Published: 2010/08/11
Eastern Pacific Industrial Corp is a strategic stake for Ahmad Zaki Resources and has provided good returns, says a source
Ahmad Zaki Resources Bhd (AZRB) has not been approached by state-controlled Terengganu Inc Sdn Bhd to buy out its 21.3 per cent stake in Eastern Pacific Industrial Corp Bhd (Epic), a top company official said yesterday.
Sources close to AZRB said that if and when there was an offer, it would let the shareholders vote on it at a special shareholders' meeting.
AZRB managing director Datuk Wan Zakariah Wan Muda could not be reached for comment.
"Epic is a strategic stake for us and has provided us good returns," one of the sources said.
In its annual report, AZRB said that its investment in Epic had contributed generously to the group's earnings with an RM8.9 million profit.
In the financial year ended December 31 2009, AZRB made RM20.95 million net profit compared with RM15.73 million previously, its highest ever.
AZRB bought into Epic in 2007 for about RM2.40 a share. The purchase, costing some RM83 million, was largely funded with loans secured from OCBC Bank.
The source said that when AZRB bought Epic shares, the latter was in the midst of being cleaned up.
"Epic has been cleaned up now. It's a grossly undervalued company. I think, at the current level, even if there is an offer on the table, we will not be inclined to accept it," the source said.
He added that it would only make sense for AZRB to consider exiting Epic if there was a sound profit, taking into account the number of years it has held on to the shares.
Epic has interests in the oil and gas services industry and port services.
It owns the Kemaman Supply Base (KSB), a leading petroleum supply base in the Petroleum Development Zone in Terengganu.
KSB hosts more than 250 services companies supporting the petroleum industry with services such as fabrication, engineering works, manufacturing and assembly, wire line and rigging, equipment testing and inspection, handling and supplies, among others.
Epic, which has about RM27.21 million debt and asset size of RM433 million, made a net profit of RM24.5 million on the back of RM109 million revenue last year.
Bernama reports: Epic has denied that there will be a change in its major shareholding soon.
Its chief executive officer Ramli Shahul Hameed said that since last Thursday, its share price on Bursa Malaysia has increased from RM1.80 to RM2.30 apiece.
"We are happy over the rise in share price. We deny that the increase in the price has to do with the report in a weekly newspaper last Thursday of an impending change in the company's major shareholding," he said in Kuala Lumpur yesterday.
Ramli attributed the rise in Epic's share price to its performance. Its revenue increased 21 per cent to RM109 million in the first half of this year compared to the same period last year.
"Pre-tax profit rose 31 per cent to RM36.4 million from RM27.8 million previously," he said.
I was truly baffled by the following two statements in that article above.
- Ahmad Zaki Resources Bhd (AZRB) has not been approached by state-controlled Terengganu Inc Sdn Bhd to buy out its 21.3 per cent stake in Eastern Pacific Industrial Corp Bhd (Epic), a top company official said yesterday.
Sources close to AZRB said that if and when there was an offer, it would let the shareholders vote on it at a special shareholders' meeting
Huh?
What's the journalist trying say?
One minute he states out clearly that AZRB has denied the approach to buy out EPIC's stake. And apparently the journalist said that this denial came from 'a top company official'.
However, the next line, the journalist put on the devil suit and threw the readers a curve ball saying "Sources close to AZRB said that if and when there was an offer"!!!!
Now the inquiry mind wants to know who this 'sources' is now!!!!!
One minute the journalist said top official denied the buyout rumour. Next he brings out the mysterious 'sources'!!!!
Gleee!
'Pusing here, pusing there!'
What a nice set of financial news!
Sigh.
Posts
4 comments:
How easy to make a great fortune for being a financial journalist by repeating the process of publishing research reports to drive certain stock flying to orbit. So don’t choose to be an in your next life because you might end up spending whole life in analyzing numbers from 0 to 9.
Being a financial journalist is more influential since you might possess a powerful magical pen to create an illusion in manipulating readers. Many readers would believe in you to drive stock sky high through creating a series of stories and claiming it from “a top company official said” or “unknown sources”.
I respect your tracking skill. You are able to relate articles EPIC with spike in volume swiftly. It’s not simple for ordinary investors to digest the stories fully before joining the herd. In order not to miss the train, many choose to buy the dream as it looks real and they have no time to study the fundamental of the company most of the time.
I feel something needs to be done to eradicte such financial shenanigans!
tklaw: What if I would show you that a certain journalist have continued to use and use the same old 'according to sources' theme in his articles throughout the years to drive up a stock?
That's great. Moolah, I am so eager to know those irresponsible stock boosters sucking blood secretly from retail investors. It will definitely help… serve as a first level firewall to alert the blacklisted financial journalist/analyst from investment banker. They should bear the blame for low participation of retail investors in KLSE. Many thanks.
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