Monday, 28 July 2014

Not all charts are the same

I read The Edge of July 21, 2014, and almost fell off my chair:

Aeon, the blue chip, one of my favourite Malaysian stocks, had dropped from about RM 16 to below RM 4. What has happened?

I quickly checked Bursa's website:

Same picture, Aeon's stock down by 75%.

Yahoo then:

Now it is getting strange, the share is indeed down a lot, but "only" around 50%.


And Wall Street:

Hmmm, nothing really happened, the price more or less going flat over the last year.

Checking Bursa's announcements site reveals the answer, a one-for-one bonus and a capital reduction from RM 1 to RM 0.50, so basically the share split in four.

If a bakery sells whole cakes for RM 20 and the next day decides to sell quarter cakes for RM 5, then the price not really fell by 75%, it stayed the same. A proper chart should reflect that.

Can The Edge, Bursa and Yahoo please update their charts?

Selamat Hari Raya to all Muslim readers and happy holidays to all.

1 comment:

  1. Good post. Total misleading to those who does not follow corporate action.