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‘BursaBets’ causes rise in Top Glove stocks as GameStop fiasco reaches Malaysia

Top Glove stocks saw a 8% rise a day after BursaBets was set up while similar companies saw gains as well.

Staff Writers
2 minute read
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Major glove producers in Malaysia saw their shares rise last year due to strong demand during the Covid-19 pandemic although these later dropped on vaccine-related news. Photo: AFP
Major glove producers in Malaysia saw their shares rise last year due to strong demand during the Covid-19 pandemic although these later dropped on vaccine-related news. Photo: AFP

Investors in Malaysia inspired by the recent GameStop mayhem have come together to push up local stocks with their own version of the WallStreetBets Reddit thread, called BursaBets.

Earlier in January, amateur US investors on Reddit found out hedge funds were short-selling stocks. Widely considered as stock manipulation, millions of investors then moved to “punish” these hedge funds by buying up as much of those stocks as they could.

This in turn sent stocks like GameStop from US$20 to US$469 in weeks and caused large hedge fund managers to lose billions of dollars to an army of Reddit folks.

Robinhood, the trade app most of these investors were using, decided to comply with regulations and suspend trading shares of GameStop when numbers were soaring.

Co-founder Vladimir Tenev explained this to CNBC as needing to “comply with regulatory net capital requirements and deposit demands from clearing-houses, the institutions that match and settle share transactions”.

Robinhood has since limited trading on GameStop and other stocks that are heavily shorted.

The Economist, on the other hand, described this as a possible threat to Robinhood, which could be losing most of its users and attracting the attention of lawmakers who will reportedly be holding hearings soon about the decision to halt trading.

Closer to home, a Malaysian discussion group for Bursa, named BursaBets, took the story of WallStreetBets as inspiration. Its 11,000 members, who were in discussions on the hows and whens, decided to buy glove stocks and to hold their shares or, in other words, to “hold the line”.

Major glove producers in Malaysia saw their shares rise last year due to the strong demand during the Covid-19 pandemic. However, news of vaccine successes caused these shares to drop later on. The recent lift of the short-selling ban by the government has made these stocks a target for short sellers.

Top Glove stock soared almost 300% last year but later fell about 40%. A day after BursaBets was set up, the charts showed an 8% increase. Similar companies such as Hartalega and Supermax also saw gains of 5% and 3.6% respectively.

“I believe the current price of gloves is very undervalued, and my personal stance is that I want to hold on to it until it gets to its fair value,” _Revenant_, the founder of BursaBets posted on Reddit.

“I just want the market to realise that the valuations are too low and that our glove companies deserve better.”