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FINANCIAL CHRONICLE™ » FINANCIAL CHRONICLE™ » Found in Capital Trust Research Report Area

Found in Capital Trust Research Report Area

Go down  Message [Page 1 of 1]

nkuda


Manager - Equity Analytics
Manager - Equity Analytics
Following was found in Capital Trust Research Report Area,

Market Waiting For Changes In Credit Restrictions To Celebrate The Budget

Though the Budget is a growth promoting and development boosting the market will be unable to react due to the prevailing credit crunch. CSBA apparently had a cordial meeting with the CSE which was aimed at getting the latter’s support for the proposals to be presented to the SEC today.

Hope forum member's comments on this!

Important
This is not Buy or Sell Promoting, I too don't know the truth of this

rijayasooriya

rijayasooriya
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Capital Trust is retailor friendly broker firm but their research reports are not reliable.Those are too optimistic rather than realistic.

nkalansu


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
Heard a rumor yesterday that brokers had a meeting yesterday to remove credit restrictions. I don't know the truth of this.

However will relaxing of credit restriction would rectify the current downward trend?

I feel people are not interested in CSE now....

It appears they are sending the medicine and the doctors after the patient is dead.

Lets hope that we will have a good time ahead.

Slstock

Slstock
Director - Equity Analytics
Director - Equity Analytics
@nkalansu wrote:Heard a rumor yesterday that brokers had a meeting yesterday to remove credit restrictions. I don't know the truth of this.

However will relaxing of credit restriction would rectify the current downward trend?

I feel people are not interested in CSE now....

It appears they are sending the medicine and the doctors after the patient is dead.

Lets hope that we will have a good time ahead.

I have been hinting this for a while. This might be one of the 2 trump cards left to regain overall investor confidence. Other one is to remove expropriation law (from certain companies atleast) and induce massive buying from Gov institutions on consecutive days to boost the ailing market.

Else with this negative trend, margin calls and force selling on cards , ASI 5000 does not seem too far away with massive losses beyond repair for retailers. Some IPO are trading 40% less than initial price. Some overvalued one have come down drastically. What will happen to them if it hit 5000?

I think time for SEC to induce some investor confidence back before it gets too crucial and too late. We do not want a 2008 December again.


A natural market takes corrections of course. Corrections are healthy. Are we in a natural correction now or induced one due to external factors? In a healthy market when there are significant downs there will be ups also and vice versa. CSE now is going on extremes. Credit relaxation might atleast stop some panic selling and any force selling and induce investor confidence.

Here is what I see
Giving credit is no harm as far as it is regulated . Unlimited credit with no regulation is bad.
Maybe one can be given certain small percentage of their portfolio ( say10-30%) as credit depending on credit worthiness
( look at past history of payment) within a designated time frame. People who abuse credit should not be given so or given minimal credit. If they exceed the limit within the time frame they cannot buy until the credit is reduced to 50-75 % or something.
Atleast this will help to regulate the credit market somewhat and improve the probability that everyone does not have to sell due the same period to credit issue in a down market creating further panic.




Last edited by slstock on Wed Nov 23, 2011 8:18 am; edited 1 time in total

smallville

smallville
Associate Director - Equity Analytics
Associate Director - Equity Analytics
All I can see is a bunch of idiots @ SEC play wit investors at our expense.. They dont have a clear path or vision as to how this menace could be put to an end..

My guess is;

If credit clearance is stopped and credit is granted, the market may move up abut 4-5 days then again would come down.. We saw last time what happened with credit rules being revised to extend the June 30th dead line..

Aren't we gonna have the same kind of issue even if credit is allowed? Credit means, we're playing with some money which doesn't exist in the system..



Slstock

Slstock
Director - Equity Analytics
Director - Equity Analytics
@smallville wrote:All I can see is a bunch of idiots @ SEC play wit investors at our expense.. They dont have a clear path or vision as to how this menace could be put to an end..

My guess is;

If credit clearance is stopped and credit is granted, the market may move up abut 4-5 days then again would come down.. We saw last time what happened with credit rules being revised to extend the June 30th dead line..

Aren't we gonna have the same kind of issue even if credit is allowed? Credit means, we're playing with some money which doesn't exist in the system..



Small,

"If credit clearance is stopped and credit is granted, the market may move up abut 4-5 days then again would come down.. We saw last time what happened with credit rules being revised to extend the June 30th dead line..

Aren't we gonna have the same kind of issue even if credit is allowed? Credit means, we're playing with some money which doesn't exist in the system.."

There is truth in what you say.

But in the current context , there appears to be an issue with retailers being tied up with their money in IPOs and possibly lot of crap ( their fault). There is no money it appears for retailers until they can exit their holding. They can't exit their holding when prices keep coming down day by day. We know the market is retailer run now a days. There should be some remedy to resolve this issue else this is heading only in one direction. A crash for retailer beyond repair.

I understand giving credit is also a demon ( Yaka) . But comparatively maybe Yaka A will do less harm than Yaka B though they are both Yakas.

We knows that world runs on some credit. Issue is this credit needs to be regulated. Is it fair to give unlimited credit to HNWI but give none to retailers with yardsticks and force sell them in crisis. That were the regulation should come. Also HNWI should also not be given unlimited credit to manipulates market.

I know there will be lots of arguments against giving credit. But letting a market free fall like this might be very bad Yaka which might wipe out lots of small retailers. Which Yaka do we want. SEC's responsibility is also protect retailers. Maybe the child is naughty ( retailers ) but can't make them fall to a level below recovery. We should find a way to punish for bad actions but we should not reprimand them beyond recovery.

Right now the with this negative trend, how far will this market fall if it goes like this until december



Last edited by slstock on Wed Nov 23, 2011 8:37 am; edited 1 time in total

Rapaport

Rapaport
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
Like we think there are people who will re-invest if new credit is allowed, then one must also realise that there are many who are waiting to exit at the next possible market rise. Maximum volumes were seen at market peaks indicating involvement of large number of investors. Now they have either got stuck with forced selling or red portfolio's.

There are lot of investors who do not understand market dynamics and the money invested is too precious for them. They rather pull it out than wait patiently for a good profit. The long red has given them a bitter experience. Also many are stuck with IPO's and junk stocks. These guys will enter again once market is flying and stand the chance of getting stuck again.

Even i agree that credit if allowed will only artificially prop the market up.

Cheers!

Soundchips


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
may be that ..when there is no credit to clear ... real investments would be attracted....

as long as this issue remains investors may be reluctant to commit ..and to get their fingers burnt...
sensitive issues where .... can't afford to entertain serious blunders.... recovery is a slow process...

Slstock

Slstock
Director - Equity Analytics
Director - Equity Analytics
@Rapaport wrote:Like we think there are people who will re-invest if new credit is allowed, then one must also realise that there are many who are waiting to exit at the next possible market rise. Maximum volumes were seen at market peaks indicating involvement of large number of investors. Now they have either got stuck with forced selling or red portfolio's.

There are lot of investors who do not understand market dynamics and the money invested is too precious for them. They rather pull it out than wait patiently for a good profit. The long red has given them a bitter experience. Also many are stuck with IPO's and junk stocks. These guys will enter again once market is flying and stand the chance of getting stuck again.

Even i agree that credit if allowed will only artificially prop the market up.

Cheers!

Yes, some retailers will never learn and fall into the same trap again and again. Giving credit will possibly temporarily boost market. But should we let a free fall market with no retailer cash in hand like this if this trend continues.

By I think these IPOs have to be regulated. Too much in a short period is very bad as we have seen.




Anyway that's why credit should be given on a worthiness on past payment and performance. If one is given credit and if they go use all of it at once and not pay in a designated time, it shows their responsibility levels. Also if you look at Foriegn Credit card systems, the credit amounts given and your credit ratings depend on the how you are managing balances in your account. If one uses 100% credit and does not pay your rating will come down drastically. If one uses 20% credit and pay on a regualr basis their credit will go up.


Like I mentioned a free fall is imminent with all these negative factors in place now. How would SEC instill investor confidence now.

Should we let ASI to free fall wiping out retailer completely. Please read my before post and Yaka A and Yaka B and also SEC being the parent and retailers being the child. We should punish bad childred but not completely wipe them out to have no confidence .




SL.Market

SL.Market
Vice President - Equity Analytics
Vice President - Equity Analytics
Strong jack for stop the down trend to be the removing of credit restriction... No other ways...

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