Credit clearing over?

tubal · 1 Credit clearing over? Thu Mar 31, 2011 7:00 am

tubal

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Good news and bad news. While lots of people said there was not much credit to be cleared, I took the contrary view and argued that there maybe a lot of credit to be cleared. Looks like I may have been wrong and I am not ashamed to admit it. This conclusion was reached after looking at the way retailers tucked into UBC. While big investors dumped parcels as big as 500,000 shares, retailers happily lapped up all of it. So they are obviously not having credit issues.

Now the bad news. Inspite of the credit issue being a non issue the market is still very weak. Yesterday the ASI had a 0.75% drop but some philanthropist bought large quantities of SLTL, JKH, COMB, DIAL and CFIN at high prices and pushed the index back into the green territory. Even then the close was 0.21% down. The day before a very similar thing happened. Wouldn't be surprised if we see a repeat today.

anu · 2 Re: Credit clearing over? Thu Mar 31, 2011 7:45 am

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For me:

1. Credit clearing is a "Religious issue". People will not give honest opinion and who does will become pariahs.

2. Majority of people skim the surface and take investment decisions. This is very apparent in UB case. If those bought the share at 40-45 range had a cursory glance or consulted someone who knows a bit of finance, would not have taken a plunge! The common presumption would have been this share will increase like NTB, COMB, SAMP etc. as it is a commercial bank!

3. Empty vessels like WAPO, PHAR and other warrants and rights factories will keep on amusing retailers and they will continue to be sucker punches.

Value investors like us will keep on praying for sanity to prevail; as fundametally sound, promising stocks do not have the glamour and cosmetic attraction what empty vessels posses.....!

Soundchips · 3 Re: Credit clearing over? Thu Mar 31, 2011 8:16 am

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All investors would now return to the CSE. Credit clearance was an unnecessary psychological fear which keeps the investors away. Now onwards there is nothing to create a panic situation. Market needs all sorts of investors, fundamentally sound investors, speculators, billionaires, Foreigners, retailers and so on. I think all of them will reenter the CSE soon.

duke · 4 Re: Credit clearing over? Thu Mar 31, 2011 8:53 am

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well i saw dumping large chunks at low prices in 2 stocks yesterday again. one was a bank and other a illiquid stock. but what i also see is there are people waiting to buy.
yes the market will be weak driven by retailers. don't buy on credit expecting rallies. but casino will prevail.

Academic · 5 Re: Credit clearing over? Thu Mar 31, 2011 9:51 am

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tubal wrote:Good news and bad news. While lots of people said there was not much credit to be cleared, I took the contrary view and argued that there maybe a lot of credit to be cleared. Looks like I may have been wrong and I am not ashamed to admit it. This conclusion was reached after looking at the way retailers tucked into UBC. While big investors dumped parcels as big as 500,000 shares, retailers happily lapped up all of it. So they are obviously not having credit issues.

Now the bad news. Inspite of the credit issue being a non issue the market is still very weak. Yesterday the ASI had a 0.75% drop but some philanthropist bought large quantities of SLTL, JKH, COMB, DIAL and CFIN at high prices and pushed the index back into the green territory. Even then the close was 0.21% down. The day before a very similar thing happened. Wouldn't be surprised if we see a repeat today.

Your position on credit clearance is not entirely wrong. We saw some yesterday too. However , as I wrote on 21st march, market was touching its bottom as panic/force selling was finishing.

But may be knowing the trend brokers may kept some uncleared debts to sell at higher prices latter/end of the month.

If this is the case we may experience huge drop latter part of the today's session (I have a small buying power reserve for this).

Academic · 6 Re: Credit clearing over? Thu Mar 31, 2011 9:56 am

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Already RED.

Rajitha · 7 Re: Credit clearing over? Thu Mar 31, 2011 4:01 pm

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I already have gotten over - 20 votes posting about this on this forum! So guess no point posting anymore about it to some narrow minded people! Best thing to do is to do what Mono is doing these days!
All of credit clearing from last year was there for people to see! Just think smart and spend ! Its your Its your own decisions and money in the end!

Academic · 8 Re: Credit clearing over? Thu Mar 31, 2011 5:14 pm

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Rajitha wrote:I already have gotten over - 20 votes posting about this on this forum! So guess no point posting anymore about it to some narrow minded people! Best thing to do is to do what Mono is doing these days!
All of credit clearing from last year was there for people to see! Just think smart and spend ! Its your Its your own decisions and money in the end!

Yes. You and Mono were instrumental in saying this. + from me. I also observed this by 21st (but was not sure of that).

BTW, do you have any explanation/idea why market did not come up till 31 if no debt clearance was there? Just share with us.

Is that because investors expected market go down further or market is over priced?

Anyway, seems today's market up is due to foreign buying. Will this be sustainable?

Meta Trader · 9 Re: Credit clearing over? Thu Mar 31, 2011 6:29 pm

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Academic wrote:

Rajitha wrote:I already have gotten over - 20 votes posting about this on this forum! So guess no point posting anymore about it to some narrow minded people! Best thing to do is to do what Mono is doing these days!
All of credit clearing from last year was there for people to see! Just think smart and spend ! Its your Its your own decisions and money in the end!

Yes. You and Mono were instrumental in saying this. + from me. I also observed this by 21st (but was not sure of that).

BTW, do you have any explanation/idea why market did not come up till 31 if no debt clearance was there? Just share with us.

Is that because investors expected market go down further or market is over priced?

Anyway, seems today's market up is due to foreign buying. Will this be sustainable?

oh...
while u guys were arguing and wondering about the market i spent all my trading hours to watch some of my favorite movies and reading some of my fictions and biographys .

looks like my vacation is over by today Twisted Evil

on tomorrow i am going to monitor the market as usual. Twisted Evil

godswen · 10 Re: Credit clearing over? Thu Mar 31, 2011 7:34 pm

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And yes there were much credit cleared today till the last minute, I was there at two brokerages today from 11 am to 2.30 pm and I saw big red retail portfolios being washed up.

tubal · 11 Re: Credit clearing over? Thu Mar 31, 2011 7:56 pm

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Acadamic, that foreign buying is becaue of a SAMP crossing. I don't think we will see foreign funds rushing in any time soon.

Godswen, I feel so sorry for the retailers you mentioned.

Rajitha thumbs up to you buddy. Rep from me tomorrow.

To everyone: I think the reason that the market has been up today (and wasn't down in a big way for the last few days) is because of an 'artificial demand' (to borrow the phrase from a recent NDB stock brokers review).

Remember folks, today is the last day of the financial year. Most companies are now beginning to value share holdings in their balance sheet at market price rather than cost basis.

Having said that, many of you guys know that I am overly pessimistic so I could be wrong.

Last edited by tubal on Thu Mar 31, 2011 8:35 pm; edited 1 time in total

duke · 12 Re: Credit clearing over? Thu Mar 31, 2011 8:21 pm

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i have a feeling even the next few weeks will be used for credit clearing of what's remaining. besides regulators don't want to see the market drop steeply so they would have turned a blind eye just for a while. we saw the market was going flat. knowing that the people will think credit clearing was over would be a nice time to clear the credit.

now the million rupee question will this repeat in june? is there another 50%? will the brokers wait until the last weeks?

smallville · 13 Re: Credit clearing over? Thu Mar 31, 2011 9:49 pm

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Now one set is over.. another set to go..
I was thinking, if there was that much of credit to clear, the point the market dip could've was at least ASI 6500.. We never arrive there means its not that big..
On the contrary, there are two points to consider in my view;
1) now who can say we've cleared 50% either.. was there a measure of it from individual portfolios by brokers to really come to this 50% mark? I doubt.. There can be instances usual retailers are asked to clear more than 50% so the big fish can still enjoy the ride..
So my guess is still there will be uncleared credit which brokers will drag till June 30 the settle.. after all they gotta survive thru their big fishes too.. so without a doubt they have to treat these ppl nice Wink

2) If this 50% is done, another 50% is left.. so are we really waiting to see another market dip in June or will it be cleared off along the way in a controlled way?

chamith · 14 Re: Credit clearing over? Thu Mar 31, 2011 9:50 pm

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my broker told me tht market will be up from tomorrow and may go down a bit during the festival season.
But i believe this is the time to buy...
What do u guys think ?

Academic · 15 Information Asymmetry Thu Mar 31, 2011 10:18 pm

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Different people post here different views based on one or both of following reasons

1. It is the best unbiased opinion they arrive with available information
2. Intention of manipulating market or share/s

Second point is not easy to control, however we can identify those posters without much efforts. The real challenge is addressing the first one.

In fact, that we can. If we collect relevant information on the problem at hand into one place (a knowledge base), then we may make better decisions using those information. For instance, if we could determine amount of outstanding debts, and margin facilities covered old debt, the impact of debt clearance could have been determined. I tried to address this through participants' expectation in the following thread.

http://forum.srilankaequity.com/t1837-predicting-the-turning-point-a-poll-please-contribute?vote=viewresult

However, comparison of market behavior and voting reveals, they do not have high correlation.

I believe all these necessary information is among us, but scattered. If any of you can come up with an innovative idea/mechanism to address this issue, it would be mutually beneficial exercise that will up lift this forum to next higher level.

Rajitha · 16 Re: Credit clearing over? Thu Mar 31, 2011 10:49 pm

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Academic wrote:

Yes. You and Mono were instrumental in saying this. + from me. I also observed this by 21st (but was not sure of that).

BTW, do you have any explanation/idea why market did not come up till 31 if no debt clearance was there? Just share with us.

Is that because investors expected market go down further or market is over priced?

Anyway, seems today's market up is due to foreign buying. Will this be sustainable?

Yes I said this after doing some research and only mono backed me up back then! What I think regarding what happened is in this tread! (Last tread that went on about this hardly had anything good )
http://forum.srilankaequity.com/t1858-some-brokers-debts-are-in-the-billions-of-rupees

BTW for your last post! Market turning point was MARCH 15th So the correct answer is on or before 18 th which so few people voted! Most possibly optimists ! I also voted 25th as I thought there will be quite a lot of panicked people and some too scared to buy on credit!