when will the games end, page-20

Well it looks like there is now proof that our stock is being manipulated down and there is some things that we can do today to stop this practice immediately. Find below a copy of the article in Yesterdays Sunday Times in Perth.

SELLING YOU SHORT
Latest Rort
by Noel Whittaker

An inniovative but unethical trading practice has reared its ugly head for Australian investors.
Though this quick-wealth rort has the same greed-is-good stench as the 80's film Wall Street, it is a new spin spawned by market volatility and investor uncertainty.

And it is making speculative traders millions, as it scares the living daylights out of investors.
If you are a major trader in the world stock markets and want to make a fast buck out of the present uncertainty, it works like this;
First, go to an institution and pay a fee to borrow a few million dollars worth of shares in a heavily traded company such as BHP, Rio or the Commonwealth Bank.
You then dump these on the market and deposit the sale proceeds into an interest bearing account, where it earns a safe 7%.
This is called short selling because you are effectively selling shares you don't own, in the expectation that their price will be cheaper in the future and you can buy them back.
If all goes to plan, the selling pressure you have created will drive the price of the shares down and, in a week or monthor so, you can buy them back at a cheaper price and return them to the institution you borrowed them from in the first place.
Fund managers tell me that traders who play this game will not hesitate to spread rumours in places such as internet chat rooms to hasten the fall of the stock.
After all, if the share doesn't drop or, worse still, goes up in price , the traders stand to suffer a hefty loss.
When they eventually buy back the shares, the price will jump, again, because of the buying demand.
The growing popularity of margin lending is another factor that works in favour of these traders.
The traders prefer short-selling shares that are the favourites of investors who use margin lending, becasue they know that the selling pressure and price slumps caused by the tactic will trigger margin calls from the investors who are heavily geared.
The borrowers are forced to dump their shares on a falling manipulated market, adding further selling pressure and pushing the price down even further.
Again, the traders win.
But wait there's more.
If a person takes out a margin loan, the lender in many cases has control over the shares it holds as security.

During the recent market turmoil, it has been discovered that some margin loan lenders were the ones that lent the shares to the speculators who, in turn, caused the pressure that triggered the margin calls that had such a devastating effect on the portfolios of those who had borrowed.

THAT IS A MASSIVE CONFLICT OF INTEREST.

What I have just exxplained is a classic illistration of the way modern technology and trading systems allow traders to manipulate the market.

The result is unprecedented volatility in share prices and it is now not uncommon to see prices of our blue chip companies such as BHP, or our major banks jump about 5% a day.

This is ridiculous because there is nothing in their balance sheets to justify a 5% jump in amy direction.

Of course, the byproduct of this volatility is investor nervousness.
Retirees are now glued to their screens at night, watching the value of the superannuation rise and fall.
Most of them do not understand that their worries are caused by the activities of traders, not becasue of any inherent problems in our major companies.

Fortunately, the ASIC has flagged its intention to liase with the ASX to review these activities and decide if further regulatory steps are needed.

One option is to demand that short selling be publicly disclosed.
This would enable the market to know if the volatility in a company is due to trading, or to a problem in the company itself.

The message for all who have invested for the long term is sit tight and do not worry.

Price flucuations caused by traders don't have anything to do with the inherent value of the share itself.

Get some revenge on the traders by using the dips as a time to buy, not a time to sell.

Now the above article could explain why CQT's share price appears to be kept getting pushed down.

I believe that if you have a margin loan that is using CQT stock or any other stock you might be involved in you should write a letter to that lender informing them that you do not want your stock used in this way. You should fax this letter to the Margin Lender, the ASX, ASIC and also in CQT case to Bruno the company secretary so that the company is aware that this practice may be occurring.

I will post a sample letter and the relevant Fax numbers of the different departments to send these letters to later today.

If we take away their ability to use our stock to push the price down this can only be positive for the company