KUALA LUMPUR, Sept 8 (Bernama) -- Bursa Malaysia closed almost flat on Tuesday as buying interest rotated away from index heavyweights towards smaller-cap construction stocks, with sentiment affected by geopolitical uncertainty, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 0.39 of a point to 1,714.40 from Monday’s close of 1,714.79. The benchmark index opened 1.65 points lower at 1,713.14 and moved between 1,710.44 and 1,714.50 throughout the trading session. The broader market was almost evenly balanced, with decliners leading gainers 548 to 546, while 598 counters were unchanged, 1,107 were untraded and 25 were suspended. Turnover expanded to 4.13 billion units valued at RM3.14 billion from 3.60 billion units valued at RM2.45 billion on Monday.
Chinese stock traders have rapidly unwound their short positions at the fastest pace since February, taking advantage of an equity selloff to close trades ahead of a regulatory deadline.
Key Points:
Short Positions Decline:
- The combined outstanding short positions in Shanghai and Shenzhen dropped by 14% from the end of last week, reaching 25.1 billion yuan ($3.5 billion) as of Thursday.
- This marks the lowest level since May 2020 and the largest weekly decline since February.
Market Movement:
- Chinese stocks initially rose in anticipation of the Communist Party’s Third Plenum earlier this month, supported by state fund purchases.
- Short trades suffered as shares surged, but the market slumped from July 22 due to disappointment over the lack of strong economic stimulus or reform plans from the meeting.
Regulatory Deadline:
- Traders need to return borrowed shares to China Securities Finance Corp., the largest stock lending provider, by a September 30 deadline.
- This deadline is part of stringent measures announced earlier this month to curb short selling and quantitative trading strategies.
The rapid unwinding of short positions indicates traders' attempts to navigate the regulatory landscape while responding to market fluctuations. The imposed restrictions are part of broader efforts to stabilize the market and control speculative trading activities.
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