I think you are misguided if you think there will be no more manipulation (or reduced manipulation). The whole cycle will start again where the price will slowly be pumped up to provide a steady gain until there is re-admittance to the ASX 200. Many made a huge killing with that process last time and while we are 'in limbo' with regard to announcements, the process is highly likely to be replicated by those who can. There is price manipulation in the short term but market manipulation in the long term. I have stated previously that I believe shorters have acquired large borrowed holdings in order to manipulate price and the market as they see fit. The climate is ripe now to push the price up steadily until an announcement. One hypothesis is that the shorters have used their borrowed holding to manipulate prices in order to accumulate (others have alluded to this as well). I don't believe it is in the shorters best interests to see WBT go out of the ASX 300 but they have a strong interest in getting back into the ASX 200 before there are too many positive announcements from the company. Given that many index funds leave it to the last minute to make their adjustments (we saw that in the auction prior to the ASX 200 entry and I suspect the recent drop is for the same reason. Meanwhile, those who can (shorters and big players) are now in a position to manipulate prices so we can expect to see more games from them, certainly in the short term.
Of note is the fact that the 4 exits from the ASX 200 are amongst the highest on the rankings of shorted stock (as of a week ago):
CXO (No. 8) at 7.65%
SYA (No. 11) at 7.44%
WBT (No. 12) at 7.23%
CHN (No. 14) at 7.11%
Coincidence? I think not. Shorters have a plan which I suspect is to propel these back into the ASX 200 making a tidy profit from shares accumulated by manipulating prices whilst 'things are quiet' with the companies and by manipulating the market to get them back into the ASX 200 so that they can repeat the process. Index funds and investment banks have done nicely through lending shares out over the period but there are other sources for borrowing shares (which are somewhat unethical, if not illegal) as well as the index funds covering the ASX 300. We have seen a small drop in the number of shorted stock recently with the rebalance, but I would be surprised if it drops below the 6.5% mark without significant announcements.
This is all in my opinion, hypothesized on the evidence available. I will be assembling evidence to test this hypothesis over the next few months, but will NOT be parting with my shares, first purchased in Sep 2017 and added to at opportune times since and will continue to add at opportune times.
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Open | High | Low | Value | Volume |
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Price($) | Vol. | No. |
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5 | 13855 | 1.940 |
2 | 4924 | 1.935 |
5 | 8960 | 1.930 |
4 | 30934 | 1.925 |
Price($) | Vol. | No. |
---|---|---|
1.980 | 3374 | 1 |
1.985 | 3374 | 1 |
1.990 | 3374 | 1 |
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