Decision Postponed - We are screwed up yet again.

Thanks
Now market red

No Government agencies are properly worked without the intervention by the H.E. President. I know a lot of you hate Mahinda Chnitana. However, you can get a solution if and if only he intervene to this matter too just like happening everywhere.
We can convince him either to allow broker credit or to arrange margin with intuitions.

Market is gonna crash..if we go like this

Genting wrote:

windi5 wrote:Next week i think. normally they meet on Wednesdays. they need more time to study broker proposals .

They knew what brokers were proposing for some time.
Seems like they have gone to the meeting without doing any analysis. That's why they ask for more time.

This shows SEC's incompetence again!

Moka munwa path karada danne ne?

I am totally agreed with u.Furthur more it they really want time they can withhold that rule till their next meeting.I think real reason for this some big fellows may be waiting for bargain hunting.

Favorable division might come after monitoring within certain limits...... it is not an easy decision for any government...

Like our friend genting says, why the hell did they have the meeting without the proper information in the first place ? They should have gone into this meeting with all available info and then made a decision based on that without further delay.

I think it's a conflict between doing the right thing and doing what is popular. I think some forward thinking people are reluctant to do the popular decision for short term gains. Taking the right decision will not make someone popular but will be good for in the long term. But taking the popular decision will make you hero for sometime but ruin everyone in the long term. But in Sri Lanka usually popular decision usually wins.

There should be a proper methodology to do anything.Otherwise even with very good intention u can destroy everything.As an example see how the good intelligent parents grow up their child.They use proper methodolgy.Otherwise child can not understand their parents and he/she may think on parents as enemies.Good intention is very important but proper methodology is the secret of achieving that intention.SEC may be lack with this methodology or they may have more interest on HNWIs.

ඇත්තට නිදි මිනහා අවදි කරන්න පුලුවන්ලු....ඒ වුනාට හොරට නිදි මිනිහා අවදි කරන්න බැරිලු...

duke wrote:I think it's a conflict between doing the right thing and doing what is popular. I think some forward thinking people are reluctant to do the popular decision for short term gains. Taking the right decision will not make someone popular but will be good for in the long term. But taking the popular decision will make you hero for sometime but ruin everyone in the long term. But in Sri Lanka usually popular decision usually wins.

As Sri Lankans, taking popular decisions is in our blood. I hope SEC is strong eough to say no to all these broker huts.
If they desperate for credits then SEC should allow less than 25% credit facility to investors who have really good track records.
Siri Lankawe api, "kanna denawa num bonna denawa num wena mona kengediya da thawa oney kiyanne"

duke wrote:I think it's a conflict between doing the right thing and doing what is popular. I think some forward thinking people are reluctant to do the popular decision for short term gains. Taking the right decision will not make someone popular but will be good for in the long term. But taking the popular decision will make you hero for sometime but ruin everyone in the long term. But in Sri Lanka usually popular decision usually wins.

SEC might take a decision when the broker firms show some discipline, ......when they prove that they can attract new investments and when they demonstrate that market can maintain a sustainable growth then they might relax. ......They say that they are monitoring and considering favourably. .......SEC has at least taken up this issue without telling that no credit at all... investors and brokers have to demonstrate that it is worth giving some of those benefits……

UKboy wrote:

duke wrote:I think it's a conflict between doing the right thing and doing what is popular. I think some forward thinking people are reluctant to do the popular decision for short term gains. Taking the right decision will not make someone popular but will be good for in the long term. But taking the popular decision will make you hero for sometime but ruin everyone in the long term. But in Sri Lanka usually popular decision usually wins.

As Sri Lankans, taking popular decisions is in our blood. I hope SEC is strong eough to say no to all these broker huts.
If they desperate for credits then SEC should allow less than 25% credit facility to investors who have really good track records.
Siri Lankawe api, "kanna denawa num bonna denawa num wena mona kengediya da thawa oney kiyanne"

Yes 25% percent is a good figure. That is some thing any body can settle without any difficulty...throwing stones and mud is not the way to achieve those things ...prove that it is worthy. Then they may give 50% or more…

Aamiable wrote:

UKboy wrote:

duke wrote:I think it's a conflict between doing the right thing and doing what is popular. I think some forward thinking people are reluctant to do the popular decision for short term gains. Taking the right decision will not make someone popular but will be good for in the long term. But taking the popular decision will make you hero for sometime but ruin everyone in the long term. But in Sri Lanka usually popular decision usually wins.

As Sri Lankans, taking popular decisions is in our blood. I hope SEC is strong eough to say no to all these broker huts.
If they desperate for credits then SEC should allow less than 25% credit facility to investors who have really good track records.
Siri Lankawe api, "kanna denawa num bonna denawa num wena mona kengediya da thawa oney kiyanne"

Yes 25% percent is a good figure. That is some thing any body can settle without any difficulty...throwing stones and mud is not the way to achieve those things ...prove that it is worthy. Then they may give 50% or more…

25% or 50% or in between that what it should be avoided is force selling on T+5.If anyone is not worth for credit credit should not be given....But offering it and then force sell on T+5 is nonsense.

At the sametime we can not compare bank loan with broker credit.Broker credit is given only to buy shares and brokers can completely observe it and If broker want they can sell the shares and recover the debt.

But bank loans are different....When we consider the personal loans banks must be very strict with assessing worthiness.Of course there are property loans,vehicle loans,housing loans,etc which are given for definite purposes(like broker credit for buying shares) but in those loans also wothiness should be thoroughly assessed as it is not easy to recollect the debt even with mourtage.In share market brokers can easily sell the shares and recollect the money.So if brokers want to asses the worthiness it should be in a different manner.

SEC should have a proper monitoring system to check whether brokers follow the rules(definitely not this T+5 day rule.)

Can anybody enlighten the practice in other countries regarding broker credit and margin trading. I hope the SEC decision could be more in line with best practice rather than Sri Lankan practice.

Here is my proposal for Credit Issue and T+5

1) Give credit up to 100% until T+3, and if its not settle on T+3, force sell 50% on T+5 and charge a fine.
2) Give credit up to 25%-50% of portfolio value and charge interest of 2% per month, calculated and charged on daily basis after T+3.
3)The credit limit is decided by the broker depends on the credit worthiness

Good point Tiger..

@ Genting i commented on your topic..
From the above 3 Options
Option 2 is my choice..

SanjivFund - thanks for the support

2% for month is a high rate. If people being charged with a high interest rate for their unsettled credit, it will discourage people getting credit for long time. Then it will automatically reduce the credit issue without force selling.

@Tiger..Basically how it works is Brokerages offer 2 types of facilities for stocks.
1)Cash Account
2)Margin Account

This way if you want to trade on margins(good for day trading)then you have to have a Margin Trading account..and the minimum balance is generally higher than a Cash Account.
Whenever the price of a stock falls,which results in Margin Calls.
Most brokerage..90% are quite strict on payments even at the cost of the client..

Happy Trading

@Genting..exacltly..
The interest to be charged can be debated and calculated if something like this implemented..but the essence is that a high rate will eliminate trading on margin..

Guys just out of curiousness who is in favour of Credit being allowed & who is not?
Just say Yes/No

Happy Trading

2% per month is absurd. You can get money for lower rates from didgy money lenders.

In anycase, the SEC should stop playing big brother. Give the brokers a credit ceiling that is a multiple of their capital, nothing more than 1X and let the brokerages regulate themselves with strict quarterly audits. Simple.

It's a good thing the SEC is taking their time with this. I hope they analyze the whole situation properly. Everything these moneys have done so far have been knee jerk and reactionary.

SanjivFund wrote:Guys just out of curiousness who is in favour of Credit being allowed & who is not?

I am in favour of credit being allowed. Although I might not utilize it much, it is reassuring to know that the facility is available in case I need it.

Terms of credit need to be spelt out - maximum duration, recovery mechanism in case of default, interest rate, etc.

SanjivFund wrote:Guys just out of curiousness who is in favour of Credit being allowed & who is not?
Just say Yes/No

Happy Trading

I am agree with proving regulated credit by brokers because it is convenient for retail investors

Genting wrote:Here is my proposal for Credit Issue and T+5

1) Give credit up to 100% until T+3, and if its not settle on T+3, force sell 50% on T+5 and charge a fine.
2) Give credit up to 25%-50% of portfolio value and charge interest of 2% per month, calculated and charged on daily basis after T+3.
3)The credit limit is decided by the broker depends on the credit worthiness

2% per month is too much.. Ultimately these brokers will be benefited....what you need do is allow brokers to lend at very low interest rate (equal to banks or even below) so they will not much interest in generating revenue by providing credit

and establishing proper monitoring mechanism

SEC gave time for big guns to collect n big guns used there media such as DAILYFT n LBO to show the negative side today n ur loosers started selling,n i can c some guys representing big guys here tryng to say there wnt b a flvrble dicission.This forum is also a part of big guys campain n there r all the loosers who were in investnw here also expt the big 1 market watch,i challnge u all nt to delete this post.Guys dnt sell ur stocks without loss,hold tight,dnt let big guns rob u,spcilly chickens will fly to orbit.....

Hmm great posts everyone..

@Salim..This forum is for everyone Big or small..it a place for us to share market information,research,etc
It is not for a particular class of investor ie: Institutional or Retail
but for everyone

so please do not give negative comments about the forum..

salim wrote:SEC gave time for big guns to collect n big guns used there media such as DAILYFT n LBO to show the negative side today n ur loosers started selling,n i can c some guys representing big guys here tryng to say there wnt b a flvrble dicission.This forum is also a part of big guys campain n there r all the loosers who were in investnw here also expt the big 1 market watch,i challnge u all nt to delete this post.Guys dnt sell ur stocks without loss,hold tight,dnt let big guns rob u,spcilly chickens will fly to orbit.....

I do not know whether this forum is part of big guys or not.But this is an open form.So we can discuss things.Let big guys to do their comments then we should be active to give proper answers for them.Actually mods and adminstrator do mot delete post like that.Read the topics on the controversal matters like credit issue,T+5 day rule u well see lot of different ideas and very good conversations.They have not deleted such post.

Actually this form give an opportunity for retailors to express their views.Big guys always have that opportunity with or without this type of form.

rijayasooriya wrote:

salim wrote:SEC gave time for big guns to collect n big guns used there media such as DAILYFT n LBO to show the negative side today n ur loosers started selling,n i can c some guys representing big guys here tryng to say there wnt b a flvrble dicission.This forum is also a part of big guys campain n there r all the loosers who were in investnw here also expt the big 1 market watch,i challnge u all nt to delete this post.Guys dnt sell ur stocks without loss,hold tight,dnt let big guns rob u,spcilly chickens will fly to orbit.....

I do not know whether this forum is part of big guys or not.But this is an open form.So we can discuss things.Let big guys to do their comments then we should be active to give proper answers for them.Actually mods and adminstrator do mot delete post like that.Read the topics on the controversal matters like credit issue,T+5 day rule u well see lot of different ideas and very good conversations.They have not deleted such post.

Actually this form give an opportunity for retailors to express their views.Big guys always have that opportunity with or without this type of form.

Well said

salim wrote:SEC gave time for big guns to collect n big guns used there media such as DAILYFT n LBO to show the negative side today n ur loosers started selling,n i can c some guys representing big guys here tryng to say there wnt b a flvrble dicission.This forum is also a part of big guys campain n there r all the loosers who were in investnw here also expt the big 1 market watch,i challnge u all nt to delete this post.Guys dnt sell ur stocks without loss,hold tight,dnt let big guns rob u,spcilly chickens will fly to orbit.....

Aiyo, is this the same Salim guy in FB CSE gossip that promote chicken rally and illiquids???? @Moderators ... pls do keep extra attention on this guy.. we dont want this forum to spoiled as well bcoz of greedy people like this.

I think the bad omen will continue tomorrow also