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Kenya’s CDSC to launch short selling, day trading
Rank: Chief Joined: 8/4/2010 Posts: 8,977
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Quote:Day trading allows investors to make quick trades in which all positions taken are usually closed by the end of the trading session and with the bourse already automated, it could see increased turnover of securities, which could earn CDSC and brokers more
revenue.
Short selling allows an investor to borrow another’s shares, sell them if they think the price will drop, buy them back at the lower price and return the shares to the lender, keeping the difference.
Investors who like to take risks also bet on expected share price increases by borrowing money, buying shares and selling them at a higher price that covers their costs, paying off the debt and keeping the difference.
The two strategies increase the returns of the investor but are also risky, and losses are magnified in equal measure.
The introduction of day trading, settlement services for government securities and securities lending and borrowing will require the collaboration of other government agencies, including the Central Bank of Kenya, and the implementation of new laws and
changes to existing ones.
“The positive is that there is improved liquidity, more buying and selling but there are also risks in short selling and it needs to be done in a strict risk management environment,” said Paul Mwai, chief executive officer, AIB Capital.
More info - http://www.theeastafrica.../-/7ime4oz/-/index.html Waiting with a cheeky smile for this to be launched. Some stocks like paka, OCH would be places to start on the short side. Then KQ, KK and MSC. EABL and ARM could also be played on shorts but with caution since bid pressure still persists even at crazy PER levels. TA will become more handy in day trading & shorting. Cartoons are soon to become very key trading tools  $15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Elder Joined: 3/19/2013 Posts: 2,552
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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"Na hiyo ni maendeleo.." - H.E, DTM. I'm so wowed btw, sophistication! #Awesome
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Rank: New-farer Joined: 6/7/2010 Posts: 20 Location: Nairobi
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This has always been lost opportunity.. We only benefit from bear market in hunting bargains.. If we can short and ride bear looking for discounts.. That would be awesome...
Come baby come quick...
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Rank: New-farer Joined: 6/7/2010 Posts: 20 Location: Nairobi
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The 10% rule on day trading will be headache....
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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Kenyanhustler wrote:The 10% rule on day trading will be headache.... Commissions are the barrier. And capital gains tax if introduced at an expensive rate. The daily limit of 10% is good enough.
I wonder how efficient the market circuit breakers are just in case short selling goes awry. Same applies to melt ups that breach the day limit without material announcement.
It would be nasty for NSE to experience a flash crash or fat finger scenario. $15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Elder Joined: 4/22/2010 Posts: 11,522 Location: Nairobi
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hisah wrote:Kenyanhustler wrote:The 10% rule on day trading will be headache.... Commissions are the barrier. And capital gains tax if introduced at an expensive rate. The daily limit of 10% is good enough.
I wonder how efficient the market circuit breakers are just in case short selling goes awry. Same applies to melt ups that breach the day limit without material announcement.
It would be nasty for NSE to experience a flash crash or fat finger scenario. A lot of money will be required on this I have extensively read and specialisied in Investment operations,we for starters will need a Central counterparty (CCP),we will need firms that will offer lending facilities...the registrars need to be revamped...so many things need to be overhauled...we are gn places... possunt quia posse videntur
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Rank: Elder Joined: 9/23/2010 Posts: 2,220 Location: Sundowner,Amboseli
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This will mark the return of the prompt board,only that this time,it will be T+0 As for Short selling,i fear for a crash in the short run but the discounts will be beautiful. Certainly a win for traders! @SufficientlyP
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Rank: Elder Joined: 4/22/2010 Posts: 11,522 Location: Nairobi
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Sufficiently Philanga....thropic wrote:This will mark the return of the prompt board,only that this time,it will be T+0 As for Short selling,i fear for a crash in the short run but the discounts will be beautiful. Certainly a win for traders! There are measures to counter that... possunt quia posse videntur
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Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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Rank: Chief Joined: 3/24/2010 Posts: 6,779 Location: Black Africa
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Cde Monomotapa wrote:"Na hiyo ni maendeleo.." - H.E, DTM. I'm so wowed btw, sophistication! #Awesome Kazi iendelee! #NextLevel GOD BLESS YOUR LIFE
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Rank: Veteran Joined: 2/3/2010 Posts: 1,797 Location: Kenya
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begining of the end for the bourse  esp when you add insider trades I may be wrong..but then I could be right
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Rank: Chief Joined: 3/24/2010 Posts: 6,779 Location: Black Africa
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Now to eliminate that pesky 10 percent rule!;-) GOD BLESS YOUR LIFE
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Rank: Elder Joined: 4/22/2010 Posts: 11,522 Location: Nairobi
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digitek1 wrote:begining of the end for the bourse esp when you add insider trades Not really just tighten the rules and make bring in new ones to match best market practise...if you cock up jail time for you.. possunt quia posse videntur
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Rank: Member Joined: 1/1/2011 Posts: 396
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This is excellent news and will eventually eliminate shoddy reporting practices, with vague footnotes.
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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maka wrote:hisah wrote:Kenyanhustler wrote:The 10% rule on day trading will be headache.... Commissions are the barrier. And capital gains tax if introduced at an expensive rate. The daily limit of 10% is good enough.
I wonder how efficient the market circuit breakers are just in case short selling goes awry. Same applies to melt ups that breach the day limit without material announcement.
It would be nasty for NSE to experience a flash crash or fat finger scenario. A lot of money will be required on this I have extensively read and specialisied in Investment operations,we for starters will need a Central counterparty (CCP),we will need firms that will offer lending facilities...the registrars need to be revamped...so many things need to be overhauled...we are gn places... Definitely a number of things need to be setup to make it successful. Btw I hope they ban 'naked short selling'. It's an avenue, actually a 'highway' for abuse. Next the rules on margin trading or leverage need to be strict as well as the leverage liquidity providers. Leverage levels of x50, x100, x500 are just sheer madness and can introduce very wild volatility during crazy market events like GFC etc.
I do welcome this move so that all types of investors are accomodated and increases the market depth.
Next they should introduce ETF like FTSE NSE15/25. I like tracking and trading indices. They can also introduce NSE20 or NASI as local ETFs. This way you trade both the market weight in addition to your equities portfolio.
Waiting to see hedgefunds popping up soon...
*wanjikus will definitely need a major crash course as NSE does a quantum leap.
$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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NSE & Kenya are not ready for this form of sophistication...this is like the laptop project...give kids laptops when there are is no power in schools...kids are walking to school with jiggers...teachers are underpaid and have no motivation to teach...why not fix the simplest basics first i.e the NSE should upload company results on time not a day after Reuters or Business Daily...
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Rank: Elder Joined: 4/22/2010 Posts: 11,522 Location: Nairobi
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the deal wrote:NSE & Kenya are not ready for this form of sophistication...this is like the laptop project...give kids laptops when there are is no power in schools...kids are walking to school with jiggers...teachers are underpaid and have no motivation to teach...why not fix the simplest basics first i.e the NSE should upload company results on time not a day after Reuters or Business Daily... When I say this am called a pessimist... So let them just do it...compliance at the NSE is almost non existent it would be interesting to see how they will deal with thr myriad of issues that advancing to such levels will bring... Btw there remains a lot of controversy about the potential for short selling to disturb the 'normal' functioning of markets. possunt quia posse videntur
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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They should just reduce the commissions and settlement period...turnover will rise...they will make more money...instead of introducing weapons of mass destruction.
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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youcan'tstopusnow wrote:Cde Monomotapa wrote:"Na hiyo ni maendeleo.." - H.E, DTM. I'm so wowed btw, sophistication! #Awesome Kazi iendelee! #NextLevel
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