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Short Sell Genting

from business times.

am i right to say that he/she didnt buy back to cover, sgx bought back for he/she at higher price than on T+3 day ???

any experts to advise?

 

don't know for sure but my guess is some big boy private investor.

the T+3 rule is flexible actually. it depends entirely on what your broker is willing to give you. so if you trade big enough, you get certain privileges retailers don't get.

the alternative is the shorting was done on a CFD account, in which case the settlement period is T+30 if i'm not mistaken. Leverage of 5x could then explain how the person could afford to short so much.   

 

Can I ask where did you get this article by R SIVANITHY?

It is how it works when your short position does not cover on the same day.

Would be interesting to know who behind this, Can somebody comment?

 

Experts, please advise me on this. How did he/she manage to hold for T+3 for naked short and keep the short open for so many days. I though we need to cover it back on the first day??? Thks Published February 16, 2007

Who would have short-sold 6.3m Genting shares last Friday? By R SIVANITHY Email this article Print article Feedback TONGUES were wagging in dealing rooms yesterday morning when the buying-in market opened and 6.3 million Genting International shares were bought-in at 90 cents each. Under the local market's current t+3 settlement rule, this means that these shares were short-sold last Friday, Feb 9, when 47 million Genting shares were traded between 96.5 cents and 99 cents. Assuming the shares were short-sold at an average price of 97 cents, this means that the short-sellers would have made a cool profit of $440,000. Not a bad business if you can get it - albeit at the cost of a tense four-day wait during which Genting's shares could have risen instead of fallen. The first interesting point to note, therefore, is that it takes a brave person or persons to keep such a large short position open - after all, it was only a short while ago that Genting traded as high as $1.20 and one can only imagine the pain to the short sellers if it had rebounded to that level. The second question is obvious - if the risks were high, from where did the confidence come to undertake such a large naked short position? Genting's shares had already plunged 10 cents to 99 cents on Jan 25 following news that the government had queried the company over its links to Macau gaming tycoon Stanley Ho, so that bit of negative news had already been in the market for two weeks by the time the short positions were undertaken. Moreover, there is no additional bad news - at least not yet - which could affect the share price, so why short-sell now? No easy answer Answers are not easy to find. Mr Ho and other investors last month said they had bought a combined 6.99 per cent stake in Genting's sister company Star Cruises. In return, Genting and Star Cruises would hold stakes in a new boutique hotel and casino to be operated by Mr Ho's company in Macau. Apparently, these dealings are now being scrutinised by the government because Genting was only recently awarded the licence to build the multi-billion dollar Sentosa integrated resort-cum-casino. Genting said in a statement on Monday that together with Star Cruises, it is 'providing clarifications to the matters sought by the Casino Regulatory Division of the Ministry of Home Affairs'. As noted earlier, this is not new and has been known for more than a fortnight. The only new development came on Tuesday when Star Cruises said it is reviewing the structure of its Macau investment but did not provide any other details. As it stands now, the market is therefore in the dark as to what exactly is going on, and as a result of this uncertainty, both Genting and Star Cruises have been weakening. What's interesting to note is that when Genting won the casino licence on Dec 8 last year, its shares actually fell in the three days following the award, from around 51 cents to 47 cents. It was only several days later that the push began in earnest, and on Dec 29 when the shares were at 85 cents, the Singapore Exchange saw fit to ask the company for reasons why its shares were in such heavy play. Insufficient explanation In other words, knowing that Genting had already won a huge contract, the SGX still levied an official query, thus suggesting that in the eyes of the regulators, the winning of the licence was possibly insufficient to explain the share price rise. Given that Genting replied that it had no idea why its shares were in play, it appears that we might never know the real reason for the gains seen throughout December and January. And it remains to be seen if we'll ever find out who short-sold last Friday and why.