DANAVEST

BURSA Malaysia Bhd is investigating claims of unauthorised short-selling activities and said it would take appropriate actions if rules were broken.

Bursa was responding to a report by an English financial daily that there was an unusual and massive short selling in the stock market at the end of last week.

Investors involved in the initial heavy selling last Thursday were trapped in their short positions by the quick recovery of the market and could not deliver the shares that they did not possess.

Bursa Malaysia chief regulatory officer Selvarany Rasiah said the failure of delivery of shares last week involved a single client of a participating organisation.

“As a result of this delivery failure, the buying-in mechanism instituted by the Bursa Malaysia Clearing House was effected promptly, ensuring the delivery of the securities to the buyer on time and caused no impact to the market,” she said in a statement issued last night.

Short selling, which was re-introduced last year after a 10-year ban, involves selling borrowed shares and buying it back at lower prices. Investors pocket the difference as profit.

Business Times