I am little irritated that DAP chairperson Lim Kit Siang (LKS) quizzed the Securities Commission on possible stock market manipulation after the KLCI fell to a 23-month low of 638.5 points earlier on March 21 before recovering at the eleventh hour strongly to close at 673.24 with massive institutional buying on the 'TMT' stocks - Telekom Malaysia Bhd, Malayan Banking Bhd and Tenaga National Berhad ([#1] Securities Commission quizzed on 'market manipulation' [/#] March 24).

This kind of phenomenon as occurred on March 21 is not new. It has been going on for some time with boring regularity and predictability whenever the (KLSE Composite Index) KLCI inclined to break a new low.

This racket is a common knowledge of all those dabbling in the stock market. This institutional shoring up of the KLCI by massive buying of TMT stocks always happens the last 10 minutes before close of market trading. LKS brought it up because on March 21 the phenomenon was a trifle too dramatic! But he shouldn't spoil the racket by exposing something everyone knows!

At least as a small punter, after having lost a fortune answering the government's call in aftermath of the 1997 currency crisis to support and invest in our stocks, I could buy TMT stocks in the earlier part of the day and hopefully sell them to the local institutions at a higher price at the last five to 10 minutes before closing to recoup my earlier losses.

Even that is not easy. The shoring up in the last five to 10 minutes is not meant for guys like me to make a contra gain. (It is also doubtful whether it is for the institutions to immediately make money because if sentiments are adverse, the TMT stock prices fall the following morning of market trading to prices below what the institutions bought the day before).

Massive buying at the eleventh hour is meant for the institutions to save and not waste so much money. But the fact that they too may also subsequently lose money does not augur well because local institutions are often the custodian of public funds and should not fritter these funds for such a purpose.

The Securities Commission's role to investigate market manipulation is to ensure a level playing field and protect investors' confidence. Has the SC any role to play in this phenomenon as suggested by LKS? I think not.

If the institutions are shoring up KLCI by massive purchase of TMT stocks, it is in line with the official policy to 'massage' confidence in the KLSE and to avert despair.

The country has taken a position to recover from the currency crisis upon our own terms and not those of the foreigners' if it means their acquisition of our strategic assets or denigrating our affirmative policy programme for the bumiputras.

Recovery of our distressed corporate borrowers and success of their restructuring and eventual repayment of loans (including that was given out by EPF to the Time Group) are all underpinned by and depends on recovery of the stock market. Let this not be forgotten.

Yet as everyone knows, the KLSE cannot recover unless, for starters, our local investors have confidence and that depends on return of foreign funds.

Foreign funds however are not coming into this region in the light of US financial markets faltering. But even if and when they surely do sometime in the future, they may take a miss on us if our investment environment does not meet their standards of corporate governance, transparency and accountability - or if the foreign media such as Asian Wall Street Journal , Far Eastern Economic Review , Asiaweek or our local Harakah or malaysiakini still harp on the lack of these, aggravated by cronyism.

The bottom line is that stock prices will depend on liquidity as well as, in a large part, on sentiments. Sentiments are in turn affected by these issues. Investors would also like to see strong political leadership and stability. They are worried when 'independent' media report or harp on sporadic racial disturbances in Petaling Jaya Selatan or elsewhere or shifting of Malay political and cultural ground to the opposition that may result in political stalemate and further in-fighting.

The so-called last five- or 10-minute 'manipulation' of TMT stocks is to stage prop and massage confidence against KLSE's plunge.

Though the entire exercise is, in my personal opinion, pathetic - and futile - it is a concerted act to shore up confidence and avert despair in the KLSE upon which the recovery of our economy in a large measure depends, and therefore arguably is an act consistent with public interest. If it is also in adherence of or consistent with official stance or guided by official directive to boost investors' confidence, it would fall outside the purview of the Security Commission.

(I say such a stage propping exercise is 'arguably' for public interest because it may well turn out not to be if public funds are frittered in this process).

But why do I say it is a pathetic or futile exercise?

The fact that the heavyweight index-linked counters push up or maintain the CI at a level of say 670 points neither provides confidence nor any consolation when in real terms the broad market has already come down to the level of (say) 300 points (this is a guess) and most investors have lost 75% to 80% of their investments in counters other than TMT.

No matter how laudable the intention is, this kind of exercise makes ultimate mockery of a free market and may even be counterproductive.

Will foreign funds enter the KLSE when there is only one major player in control - the syndicate of local funds trying to artificially 'massage' market confidence in accordance with the official policy? The market seems so unreal, if not surreal.

I am not a savvy and well-informed analyst of stocks. My record of investment losses does not support it. My advice to you guys out there is to play TMT stocks because in this depressed market, and for the aforesaid reasons, they are the only game in town!