KUALA LUMPUR — The country‘s securities regulator and the stock exchange has cautioned investors against participating in social media chatrooms that promote trading of certain stocks after online forums fuelled a surge in local glove makers, similar to the phenomenon seen in the United States in recent days.
Shares of Top Glove, the world’s largest medical glove maker, rose 8.5 per cent on Friday after a call by local retail investors to drive up its share prices and squeeze out short sellers.
In a Reddit forum, Malaysian investors said they were drawing inspiration from another Reddit forum called WallStreetBets that is believed to have fuelled a surge in US company GameStop.
In a joint statement, both the Securities Commission Malaysia (SC) and Bursa Malaysia Berhad (Bursa Malaysia) said on Friday they were closely monitoring domestic trading after the US stock moves.
“Where warranted, the SC and Bursa Malaysia will take the necessary measures to curb disruptive trading practices and market abuse,” they said in a joint statement.
They said investors should be wary of discussions in social media chatrooms that may trigger securities breaches such as the provisions on investment advice or stock recommendations without a licence.
Any person found guilty may be liable to a penalty of up to RM10 million or imprisonment not exceeding ten years or both, they said.
BursaBets, the Malaysia Reddit forum discussing glove stocks, has attracted more than 7,600 members since its creation on Thursday.
Discussions in the forum have centered around Top Glove and short positions in the sector, which rallied to record highs last year as the Covid-19 pandemic boosted demand for latex gloves but has since pared gains.
Other glove makers Supermax Corporation, Hartalega Holdings and Kossan Rubber Industries also rose on Friday even as the benchmark index fell.
— Reuters
