Kenmark- the truth must prevail

Kenmark was a badly managed company. Its financial position has deteriorated over the past three years and the group is on the verge of insolvency. Instead of working hard in a last bid effort to revive the company, the management carried out more shenanigan, possibly for their own personal benefit. For more on the charade, go here & here.

What I find most despicable is the effort to generate extremely negative publicity via the disappearing act of the MD which led to a sharp selldown of the shares. The subsequent appearance of a white knight, who apparently acquired the shares in the market at extremely depressed prices, seems to be part of a well-orchestrated move. Fred Tam, an old hand in the field of technical analysis, painted a very interesting scenario of an elaborate market operation which resulted in a selldown of the stock & the huge profit accruing to the operator or pool. To wit:

7. Last week, a little known stock called KENMARK made headlines with its sudden and sharp price plunge from 0.83 on 25/5 to 0.035 sen by 1/6 accompanied by huge selling volume that even exceeded its share capital of 181.7 million shares!
8. Then at about the lowest level of around 0.04 sen, One Datuk Ishak Ismail and company came in to mop up at least 32% of the shares between June 1 and 2 at firesale prices of between 0.035 and 0.06 sen!
9. To those of you who have studied the Wyckoff Method, this is a text book case of the Composite Man using the news media, and insider conniving strategies to cause public panic triggering all and sunder (including brokerages and banks who were holding Kenmark shares as collateral) to “dump” Kenmark shares at or near to its lowest point from 0.035 – 0.06.
10. And at about the lowest point, guess who came in to mop up the shares? The Composite Man! This Composite Man must be investigated by the Securities Commission, Bursa Malaysia and they must bring those responsible for this classical manipulation move used by the likes of Jesse Livermore since the 1900s to book. This is a long forgotten classical technique taught by Richard D. Wyckoff and it is now taught in a technical analysis course offered by the Open University Malaysia-IPD.

For more, go here for Fred Tam's post on Kenmark.

From the study of Kenmark's financial statements & the news of the disappearance of its MD and subsequent resignation of its Deputy GM & Finance-cum-Admin Manager, my opinion is that Kenmark is a lost cause. The appearance of Datuk Ishak Ismail as a white knight gives a ray of hope that all was not lost, which I hope to be true. It would be extremely cynical & cruel if Datuk Ishak Ismail is part of the elaborate play to defraud investors, via what Fred Tam called the Wyckoff Method.

I hope the authority would do as Fred Tam has suggested, which is to suspend the counter & investigate all the trades carried out over the past few days relating to this stock. If Datuk Ishak Ismail is a genuine white knight, he should have no objection to the suspension. However, if his motive is to continue to trade on the shares (in order to realize the profit), then we must suspend the stock to plug the escape. Finally, if there is any evidence of fraud, the authority should not hesitate to throw the book at the perpetrators for such an outrageous scam.