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eboomerang
#21 Posted : Monday, October 08, 2012 10:15:12 PM
Rank: Member

Joined: 6/27/2011
Posts: 301
Location: Nairobi
ChessMaster wrote:
In such a situation short selling is ideal to reflect the true value of the company because it's not based so much on speculation.

Assuming you are talking about shorting, what do you mean that its not based on speculation?
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eboomerang
#22 Posted : Monday, October 08, 2012 10:22:42 PM
Rank: Member

Joined: 6/27/2011
Posts: 301
Location: Nairobi
maka wrote:
Will need so many facilities to be put in place e.g securities lending firms to help in covering short positions,central counterpaties to avoid settlement fails etc,the CMA Act will also require various ammendments its a long shot for now,lets deal with the traditional equity and bond trading that we are used to for now...but in due time you,l be shorting all the way to the bank.


In addition, high performance infrastructure is a key requirement to have this kind of trading.
Extremely fast computers, optical speed & bandwidth and extremely low latencies are required.

However I still think that keeping it banned is more reasonable for the kind of society and market that we have.
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ChessMaster
#23 Posted : Tuesday, October 09, 2012 1:29:07 PM
Rank: Elder

Joined: 2/23/2009
Posts: 1,626
I meant short selling can be a good mechanism to correct the price of a share if it's overvalued.By speculation,I'd have to say trades initiated not based on solid valuation. Although speculation is a very tricky concept to define in markets.

What do you think about margin trading in Kenya?
Uncertainty is certain.Let go
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maka
#24 Posted : Tuesday, October 09, 2012 2:04:35 PM
Rank: Elder

Joined: 4/22/2010
Posts: 11,522
Location: Nairobi
ChessMaster wrote:
I meant short selling can be a good mechanism to correct the price of a share if it's overvalued.By speculation,I'd have to say trades initiated not based on solid valuation. Although speculation is a very tricky concept to define in markets.

What do you think about margin trading in Kenya?

...defenders of the practice of short selling see it as a necessary and desirable feature of the market that plays an important role in providing liquidity and accelerating price corrections.Some believe that short sellers tend to stabilise prices in a declining market by covering their short sale positions often opened at the start of a downturn on the other hand critics argue that it increases share price volatility,exaggerates share price declines and forces the price of individual stocks down to levels that might not otherwise be reached...in extreme cases,short selling may depress the price of a security so much that it could create problems for the company in question,either by undermining commercial confidence or making fundraising more difficult...
possunt quia posse videntur
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ChessMaster
#25 Posted : Tuesday, October 09, 2012 2:10:42 PM
Rank: Elder

Joined: 2/23/2009
Posts: 1,626
Spot on
Uncertainty is certain.Let go
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maka
#26 Posted : Tuesday, October 09, 2012 2:24:35 PM
Rank: Elder

Joined: 4/22/2010
Posts: 11,522
Location: Nairobi
As said before our market needs to evolve more,the right infrastructure put in place,internet execution brokers,multilateral trading facilities etc to start benefitting from some of this trading platforms...margin trading is to risky especially with the kind of companies we have listed on the NSE,profits flactuate a lot,i know it can be a double edged sword but who is ready to loose everything,i dont think any broker would be willing to lend money to a margin trader,kwanza the profits they make are already minimal...mtapatia CMA lots of work to do...not nice,2030 maybe
possunt quia posse videntur
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ChessMaster
#27 Posted : Tuesday, October 09, 2012 3:02:14 PM
Rank: Elder

Joined: 2/23/2009
Posts: 1,626
Maka let the people work.Might mean jobs for some wazuans.
Uncertainty is certain.Let go
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ChessMaster
#28 Posted : Wednesday, October 10, 2012 1:55:21 PM
Rank: Elder

Joined: 2/23/2009
Posts: 1,626
What financial products can we as Kenya develop to fit our current and future markets?
Uncertainty is certain.Let go
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guru267
#29 Posted : Thursday, October 11, 2012 6:21:09 AM
Rank: Elder

Joined: 1/21/2010
Posts: 6,675
Location: Nairobi
ChessMaster wrote:
What financial products can we as Kenya develop to fit our current and future markets?


ETFs!!!
Mark 12:29
Deuteronomy 4:16
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ChessMaster
#30 Posted : Thursday, October 11, 2012 9:53:14 PM
Rank: Elder

Joined: 2/23/2009
Posts: 1,626
I agree.We need to up our game when it comes to online trading and the likes.
Uncertainty is certain.Let go
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