EPF-Killing the market softly with its song?

The dumping of shares recklessly on the local equities market by a supra player such as the EPF is of a major concern. Their action will surely cause the index to fall because they are the long term buyer and holders of blue chips.

Lately, they have been selling because they are investing particularly in properties in UK and elsewhere.

On 7 March alone, they shockingly disposed off more than 83.68 million compared only to a meager purchase of 7.4 million shares. Believe me, this represents almost half of the total shares traded that day! God have mercy on equities players!

Though most fund managers are of the opinion that EPF is profit–taking, its aggressive selling stance dragged down the FBM KLCI from achieving a greater height.

EPF's divestment of shares has been going on for the last two weeks. Fund managers believe EPF will continue selling the whole of the week ending 9 March 2012.

Under the Companies Act 1965, substantial shareholders need only notify the listed company of the shareholding transaction within seven days.

Among the biggest disposals on March 7 were 11.43 million shares in Telekom Malaysia Bhd, 10.72 million shares in Axiata Group Bhd, and 10.23 million shares in YTL Corp Bhd.

Most notably, between Feb 28 and March 1, it had disposed of about 30.3 millions shares in Maybank.
It had also early this month sold 10.7 million shares in UMW Holdings Bhd, 8.5 million shares in CIMB Group, 6.5 million shares in Telekom Bhd, six million shares in DiGi.Com Bhd, 3.7 million shares in IJM Corp Bhd, and 3.2 million shares in IOI Corp Bhd.

In true doublespeak, EPF chief executive officer Azlan Zainol is reported to have said that the EPF had not distorted the market. “It is all unintentional. We transact over three million shares at any one time; of course the market would be distorted,” he said. Talk about being sincere? Far from it!

In another development, the EPF is expected to start distributing portions of the Rubber Research Institute of Malaysia land in Sungai Buloh by June. Perhaps they need big bucks here?