What is Really Happening with CSE Currently

During the current week, We have seen many Up s and Downs ......with massive volumes.
What is really driving the market? Let s get all our thoughts together and see where we are heading.......

a. Credit Relaxation : This caused the market to have a run last Tuesday, But the Less Clarity over the new system seems to be bothering both Brokers and Traders. Or the other thing we could think of is HNWI s are keeping the market down at this level till they collect what they want. Mean time keep a couple of counters running to keep small traders interested.
b. Massive Volumes : We have seen massive volume transactions during the week , with a average 4 Bn per day. Means investors are taking things positively. When the market is Dull, most likely it s inactive. By looking at the volumes transferred....a hope is there for future.
c . Foreign Outflow : This is something which we need to keep an eye on, By looking at the weeks figures…Foreign investors seem to be happy with what they have got. But if you really look at the figures, It s only a negligible percentage compared to the total market capitalization. Mind you ...It s the perception what matters at CSE.
d . Massive Runs : The other thing we have seen during the week is speculative runs by several counters. This was helped by the credit relaxing announcement which kept the traders hunting behind speculations. Although some would call this “PUMP and DUMP “ I personally believe speculative buying keep the market alive. You will never find a 100% Perfect Fundamental driven markets in real world. Always keep in mind that Next month’s” Pumpers” are the ones who got hold of “Dumps” this month
By looking at these factors, can we really come to a conclusion….
My personal view is that CSE will have a solid run in the few weeks to come.
All your views are Welcome!!!!!!

Has the much awaited SEC directive changed the market behavior?
Still the brokers call and ask to clear the credits which results in a force selling day on each market day.
SEC should have relaxed the T+5 to T+10 or T+15, which would give sufficient time to settle credits. I believe this is one of the major factors effecting a smooth run of a share price.

On top of this too many manipulations happen which is quite visible to the naked eye, but not to SEC or CSE or to the surveillance software which I believe is in place.

If the current trend continues small investors like us (with limited cash) will be eliminated from the market.
I wonder whether that is the agenda of the SEC. This is my personal point of view.

Technically there should not be any T+5 force selling. Thats also what my Broker said. But.. there is a big but here..

10 or so brokers does not still qualify for the Liquidy test still. So what do they do until they raise liquid assets . What happens to their client when they buy or already bought on credit. This is a confusing question and can result in the various actions.

CSE is still trying to find its feet after SEC announcement as things are unclear and the credit issue depends on your brokers situation.

Seems there is more Regulator/Broker work to be done to make things precise and smoother.

I think SEC passed the "ball" to brokers. Now no one can blame SEC or CSE for not giving credit or force selling. Seems like SEC is clever than I thought. Wonder why they couldn't come up with this system at the first place.

slstock wrote:
Technically there should not be any T+5 force selling. Thats also what my Broker said. But.. there is a big but here..

10 or so brokers does not still qualify for the Liquidy test still. So what do they do until they raise liquid assets . What happens to their client when they buy or already bought on credit. This is a confusing question and can result in the various actions.

CSE is still trying to find its feet after SEC announcement as things are unclear and the credit issue depends on your brokers situation.

Seems there is more Regulator/Broker work to be done to make things precise and smoother.

Okay , just found supporting material for what I said above :-)


http://www.ft.lk/2011/08/19/brokers-to-seek-variance-of-sec-credit-rule/

The retailer are giving a second chance for the big guns to 'pump and dump' with good profits. I don't think there is anything called 'credit relaxation', it's put in a such a way that everyone believes that there is a 'credit relaxation'. around the world stock market's are crashing, isn't there any impact to most of the counters. We'll the big guns know all this and I feel they are exiting the market dumping the burden to the retailers with a profit for them.

Most of the counters had a run and who's holding these shares now? we see many posts asking will this and that go up next week?

something is not right with PCH as well, when you look at the order book, it's evident that the retailers are buying .1 or .2 above the big order and someone was selling big chunks.

We should thank Tubal who tried to open the eyes of the forum members few days back after such a long period of silence. no point, people don't learn until they burn there fingers. most of the seniors still silent ...

it's upto you, please think twice and don't be greedy... if the market sentiment is not good lets except it and take precautions

I am not worried about the responses I am gonna receive for this post, if it's an eye opener for atleast one retailer who is investing his hard earned money.

also lets not forget the survival of the brokers I am sure they are partying these days.

If our small investors missed the train do you know what they do?
They think this is the last train and it cannt be missed.
So they pay for a taxi and follow the train.
Eventually they get on to the train from a station near to its final destination...!!

Funny thing is they like to do this again and again. Only the taxi guys earn a fortune.

UKboy wrote:If our small investors missed the train do you know what they do?
They think this is the last train and it cannt be missed.
So they pay for a taxi and follow the train.
Eventually they get on to the train from a station near to its final destination...!!

Funny thing is they like to do this again and again. Only the taxi guys earn a fortune.

slstock wrote:
Technically there should not be any T+5 force selling. Thats also what my Broker said. But.. there is a big but here..

10 or so brokers does not still qualify for the Liquidy test still. So what do they do until they raise liquid assets . What happens to their client when they buy or already bought on credit. This is a confusing question and can result in the various actions.

CSE is still trying to find its feet after SEC announcement as things are unclear and the credit issue depends on your brokers situation.

Seems there is more Regulator/Broker work to be done to make things precise and smoother.

Well Yes.. Cant' disagree at all.. I think CT Smith & Capital Trust can pass this liquidity test so their clients will be saved, but again when counters go down n down n down all investors get heart attacks.. Now what brokers gonna go????

Light of Hope wrote:The retailer are giving a second chance for the big guns to 'pump and dump' with good profits. I don't think there is anything called 'credit relaxation', it's put in a such a way that everyone believes that there is a 'credit relaxation'. around the world stock market's are crashing, isn't there any impact to most of the counters. We'll the big guns know all this and I feel they are exiting the market dumping the burden to the retailers with a profit for them.

Most of the counters had a run and who's holding these shares now? we see many posts asking will this and that go up next week?

something is not right with PCH as well, when you look at the order book, it's evident that the retailers are buying .1 or .2 above the big order and someone was selling big chunks.

We should thank Tubal who tried to open the eyes of the forum members few days back after such a long period of silence. no point, people don't learn until they burn there fingers. most of the seniors still silent ...

it's upto you, please think twice and don't be greedy... if the market sentiment is not good lets except it and take precautions

I am not worried about the responses I am gonna receive for this post, if it's an eye opener for atleast one retailer who is investing his hard earned money.

also lets not forget the survival of the brokers I am sure they are partying these days.

Nice elaboration.. Quite spot on..
With the news most of the HNWIs could've dumped shares and if this red market continues, we can see some more crossings in days to come.. That means they started buying back.. We still didnt get an official announcement of NP & DJ's buying of PCH shares @ 20 cuz they were not directors of the said company I think.. Only directors needed to announce ne..
Today 20Mn traded as I remember that means twise their buying, sSo if they've also dumped, that's the end of this story

In my opinion there were a few undervalued shares in the market. These shares were collected by HNWI (players) and long term investors and as the credit rules were relaxed the HNWI created a demand for these shares and push the share price up. Retail investors driven by greed grab these shares and the HNWI dumped their shares and retails investors bought these shares at high prices. That why we see many rallies I think we will see few more rallies in the coming weeks.

Best example I can give is HVA my broker told me to buy HVA when it was trading around Rs. 12 as HVA was undervalued and trading below IPO price and a good counter for a long term investor.

Light of Hope wrote:The retailer are giving a second chance for the big guns to 'pump and dump' with good profits. I don't think there is anything called 'credit relaxation', it's put in a such a way that everyone believes that there is a 'credit relaxation'. around the world stock market's are crashing, isn't there any impact to most of the counters. We'll the big guns know all this and I feel they are exiting the market dumping the burden to the retailers with a profit for them.

Most of the counters had a run and who's holding these shares now? we see many posts asking will this and that go up next week?

something is not right with PCH as well, when you look at the order book, it's evident that the retailers are buying .1 or .2 above the big order and someone was selling big chunks.

We should thank Tubal who tried to open the eyes of the forum members few days back after such a long period of silence. no point, people don't learn until they burn there fingers. most of the seniors still silent ...

it's upto you, please think twice and don't be greedy... if the market sentiment is not good lets except it and take precautions

I am not worried about the responses I am gonna receive for this post, if it's an eye opener for atleast one retailer who is investing his hard earned money.

also lets not forget the survival of the brokers I am sure they are partying these days.

Friend really appreciate your work but a small information for you, don't waste your valuable time!

Till greediness and foolishness get eradicated this cycle will repeat.

UKboy wrote:If our small investors missed the train do you know what they do?
They think this is the last train and it cannt be missed.
So they pay for a taxi and follow the train.
Eventually they get on to the train from a station near to its final destination...!!

Funny thing is they like to do this again and again. Only the taxi guys earn a fortune.

Well said. I don't know why small investors wont get any benefit from credit relaxation.

UKboy wrote:If our small investors missed the train do you know what they do?
They think this is the last train and it cannt be missed.
So they pay for a taxi and follow the train.
Eventually they get on to the train from a station near to its final destination...!!

Funny thing is they like to do this again and again. Only the taxi guys earn a fortune.

Nicely put UKboy.
I feel that it's the newcomers to the market that fall pray to this because they are not familiar with the trap. The massive campaign by the CSE to get new investors drives a lot of them to the market without proper education on these matters. Every Sunday, CSE and Brokers on Rupavahini paints a very rosy picture. No one guides them on how to pick shares and how to avoid these traps.
This forum fills that void. I have learned a lot since I've been here thanks to these learned friends. I encourage you to continue this work in order to save the newcomers and guide them to do proper analysis and most importantly to avoid the traps set by the HNWIs and Brokers.

What is really happening in CSE is many investors buying into highly overvalued shares and getting trapped and fooling themselves and say its good for long term investments.

This run will go on until the credit relaxation news cools down then market will start its down trend. There will be many to blame SEC, Smart Investors (manipulators), and government. This party mood will end before long.