Tuesday, October 2, 2012

Airasia's trade: What could we have expected from EPF

The Malindo announcement caused Airasia's shares to be highly traded over the last few weeks. While some has deemed it as a downside for Airasia's future, this to others have become a buying opportunity. We know that knee-jerk typed of reaction like this could be an opportunity as sometimes a sudden drop could have caused some trades to be force sold.

Some may take this to reduce its ownership in a company due to the uncertainty for the stocks. Now, let's see what EPF has done during this period. As mentioned, EPF is a very large fund - its trades could move the market. As a result, there are lesser opportunities for EPF to take opportunity from large short term movement.

However, for this time I found that due to Airasia was a larger counter and due to the high volume traded during these period, EPF (to me) had taken some positive moves. Look at the chart below, the blue line shows that transactions which EPF has taken over the last 1 month, while the maroon line shows the trend of Airasia's share price.

I feel that the fund had taken a smart step as it has been buying from the extremely high volume opportunities. On a another table which is shown below, you can see that as the price trend turns red, the fund has been accumulating.

While I have been critical of some of EPF's purchases, this action shows that when EPF is not under stress to provide stability to the market, it has traded smartly - as I see it.

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