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Kenya’s CDSC to launch short selling, day trading
hisah
#1 Posted : Sunday, July 21, 2013 4:10:44 AM
Rank: Chief

Joined: 8/4/2010
Posts: 8,977
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 smile
$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
symbols
#2 Posted : Sunday, July 21, 2013 4:30:34 AM
Rank: Elder

Joined: 3/19/2013
Posts: 2,552
Drool
Cde Monomotapa
#3 Posted : Sunday, July 21, 2013 6:01:18 AM
Rank: Chief

Joined: 1/13/2011
Posts: 5,964
"Na hiyo ni maendeleo.." - H.E, DTM. I'm so wowed btw, sophistication! smile #Awesome
Kenyanhustler
#4 Posted : Sunday, July 21, 2013 6:47:46 AM
Rank: New-farer

Joined: 6/7/2010
Posts: 20
Location: Nairobi
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...
Kenyanhustler
#5 Posted : Sunday, July 21, 2013 6:56:22 AM
Rank: New-farer

Joined: 6/7/2010
Posts: 20
Location: Nairobi
The 10% rule on day trading will be headache....
hisah
#6 Posted : Sunday, July 21, 2013 9:20:18 AM
Rank: Chief

Joined: 8/4/2010
Posts: 8,977
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!
maka
#7 Posted : Sunday, July 21, 2013 12:07:10 PM
Rank: Elder

Joined: 4/22/2010
Posts: 11,522
Location: Nairobi
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
Sufficiently Philanga....thropic
#8 Posted : Sunday, July 21, 2013 12:44:57 PM
Rank: Elder

Joined: 9/23/2010
Posts: 2,225
Location: Sundowner,Amboseli
This will mark the return of the prompt board,only that this time,it will be T+0smile
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
maka
#9 Posted : Sunday, July 21, 2013 12:55:53 PM
Rank: Elder

Joined: 4/22/2010
Posts: 11,522
Location: Nairobi
Sufficiently Philanga....thropic wrote:
This will mark the return of the prompt board,only that this time,it will be T+0smile
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
guru267
#10 Posted : Sunday, July 21, 2013 3:18:40 PM
Rank: Elder

Joined: 1/21/2010
Posts: 6,675
Location: Nairobi
CFA/Msc Finance have never been so relevant!

Applause Applause Applause Applause
Mark 12:29
Deuteronomy 4:16
youcan'tstopusnow
#11 Posted : Sunday, July 21, 2013 5:07:16 PM
Rank: Chief

Joined: 3/24/2010
Posts: 6,779
Location: Black Africa
Cde Monomotapa wrote:
"Na hiyo ni maendeleo.." - H.E, DTM. I'm so wowed btw, sophistication! smile #Awesome

Kazi iendelee!smile
#NextLevel
GOD BLESS YOUR LIFE
digitek1
#12 Posted : Sunday, July 21, 2013 7:55:44 PM
Rank: Veteran

Joined: 2/3/2010
Posts: 1,797
Location: Kenya
begining of the end for the bourse Sad esp when you add insider trades
I may be wrong..but then I could be right
youcan'tstopusnow
#13 Posted : Sunday, July 21, 2013 8:07:41 PM
Rank: Chief

Joined: 3/24/2010
Posts: 6,779
Location: Black Africa
Now to eliminate that pesky 10 percent rule!;-)
GOD BLESS YOUR LIFE
maka
#14 Posted : Sunday, July 21, 2013 10:57:12 PM
Rank: Elder

Joined: 4/22/2010
Posts: 11,522
Location: Nairobi
digitek1 wrote:
begining of the end for the bourse Sad 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
jmbada
#15 Posted : Monday, July 22, 2013 6:21:50 AM
Rank: Member

Joined: 1/1/2011
Posts: 396
This is excellent news and will eventually eliminate shoddy reporting practices, with vague footnotes.
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