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MI has recovered sharply from last week's lows, up 15.6% over seven days to MYR 6.08, yet the borrow market is sending an unusual signal in the opposite direction: availability has exploded to levels that suggest short sellers are returning stock, not adding to positions, just eleven days before earnings.
The lending picture has changed materially since the previous note. Availability climbed from roughly 955% of short interest on September 2, the tightest point of the past year, to an extraordinary 9,999% by October 8. That means more than 14 million shares are now sitting in the lending pool relative to current short interest, a near-complete unwinding of the borrow demand that had been building through August and early September. Cost to borrow remains elevated at around 17.7%, a level it has held for most of the past two months, but with availability this loose the rate reflects legacy positioning rather than fresh demand. The ORTEX short score has also eased, slipping from 40.6 to 39.6 over the past week. Short positioning, in other words, is less of a force heading into the October 20 results than it was a month ago.
The price recovery sits in an interesting context given what was flagged in the October 5 note. The stock was trading at MYR 5.21 at that point, and the MYR 163 million net disposal by insiders over the trailing 90 days had been done at prices between MYR 5.37 and MYR 5.76. MI has now moved above those sale prices. The September 23 filings recorded further unpriced "other" transactions for substantial shareholders Mr Oh Kuang Eng and Madam Yong Shiao Voon, affecting 6 million and 1 million shares respectively, though without price data these carry low evidential weight on direction. The only clean open-market trades in the recent record remain Director Mr Teo Chee Kheong's August sales, and those were executed at levels below where the stock now trades.
The peer group has broadly participated in the same rally. JFTECH gained 14.3% on the week, VITROX added 10%, and AEMULUS rose 12.2%. MI's 15.6% gain is at the top of that range, which marks a reversal from the pattern flagged in earlier notes where MI was lagging a sector-wide move. On valuation, the P/E has expanded to 32.3x and EV/EBITDA to 22.4x, with the EV/EBITDA multiple down about 1.4 points over 30 days despite the price recovery, suggesting earnings estimates may have been revised upward faster than the stock moved. The EV/EBIT factor ranks in the 78th percentile of the universe, and days-to-cover ranks in the 87th, two data points that frame the stock as relatively uncrowded on the short side. The mean analyst price target sits at MYR 6.06, essentially in line with the current price, though that data is 38 days old and should be treated with caution.
Recent earnings history adds texture to the October 20 setup. The last four prints produced one-day moves of minus 4.0%, plus 26.2%, plus 3.7%, and plus 13.5%, a wide range that underscores how binary these events have been for MI. The five-day moves amplified two of those four in the same direction, suggesting the initial reaction has tended to stick. The August 21 result was the only recent negative outcome, and the stock fell a further 3.9% in the days that followed.
The question heading into October 20 is whether the sharp price recovery since last week reflects genuine re-rating ahead of the print, or whether the sector tailwind has simply carried MI along with it. The explosion in borrow availability, combined with a softening short score, at least removes the squeeze dynamic as a near-term complication to watch.
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