Market Responce to Credit Clearance - 50% by March 2011

milanka

milanka

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http://www.sec.gov.lk/DERRIVATIVES%2029-11-2010.htm

SEC Directive says : Brokers are required to clear credit 50% by March 31st and 100% by June 30th.

Margin Trading facilities are now provided by most of the banks now but requires average portfolio value of 1M and with interest rates higher than O/D rates.

Pl. discuss the effect on the CSE in coming months due to cledit clearance.

kpinvest

kpinvest

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its good that you bring this topic.

when T+5 rule was implemented, brokers were asked force sell shares after T+5. And for transactions done before 31.12.2010, they have be settled before 31.01.2011.

SO

as at now, theoretically there shouldn't be any credit given from broker beyond T+5.

If that is the case, there wont be any credit to be cleared on 31.03.2011 and 30.06.2011.

xmart

xmart

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O-key.. investors who are having more than 1M portfolio surely go for the margin option. even during last Oct- Dec blackout season most of credits were cleared. but there are few(but in Bn) of credits remains inside the market. since huge portion of credit from mid cap investors, they had enough time for margin. then problem remain with small retail investors.

when SEC impose T+5 rules, no credits were allowed to accumulate during this year. so, we can hold credits which carry forward from last year. that is simple expression. but as i know, when you buy on credit in this year and settling on T+5, you are settling previous accumulated credits. you cannot leave last year credits as it is and settle this year credits. simply, you had 500,000 credit which brought forward from last year. then on 1st of Jan you bought another 500,000 on credit. then 6th Jan you have to settle 500,000. but when you settle this amount, automatically you are settling early 500,000. not later one. this came across me. I don't know about others. in this case finally I had to settle all 1 Mn. so I don't have to bother about credit now. mean time I got margin too. but use it wisely. never use margin more than 90% of it.

so, I don't think market may react it. somehow investors may bit more cautious and stay away from the market. so, I don't expect market to perform after the 1st week of March. but market will heavily react to June 31st clearance. it is the doomed day.

thank you

RDS

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Actually T+5 clearance not happen 100% as per my experience, This is vary according to brokering firm.
Some brokering firms already cleared credit last year(Oct, Nov), mainly affected to small investors.
Some brokering firms already moved yr credits(as @ 31.12.2010) to marginal accounts,They still maintain that amount. So they are not forcing that much clear credits.
Hence there is a risk of credit clearance by March.

It is better if we can discuss about marginal trading & which banks give that,minimum PF to maintain.

- Combank
Early they state 2M PF enough, but according new management decision they have increased minimum PF value to 10M)

Welcome value ideas & minimum interest rates from those who have that facility.

RDS

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Xmart - Can i know yr bank. Are they opening new CDS account for that?

kpinvest

kpinvest

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xmart wrote:

when SEC impose T+5 rules, no credits were allowed to accumulate during this year. so, we can hold credits which carry forward from last year.

aren't these credit got cleared on 31Jan 2011?

Monster

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kpinvest wrote:

xmart wrote:

when SEC impose T+5 rules, no credits were allowed to accumulate during this year. so, we can hold credits which carry forward from last year.

aren't these credit got cleared on 31Jan 2011?

I think brokers are strict on T + 5 rule. I had a call from my broker on 31st Jan and asked me to clear my credit and that day itself. But I was able to negotiate with them and deposit the money on 1st of Feb.

Gaja

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compare to early days now they are very careful, also in those days they allowed to purchased 50% of my PF on credit, now they reduce that also

ShareShares

ShareShares

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Credit will not be a serious issue this year. Most of the credit were cleared with force selling last year, If there were any credit left most of them were diverted to margin facilities recently, from the remaining small fraction of credit only fifty percent will have to be cleared at the end of March. Bullish market conditions prevailing in the market gives most of the investors an opportunity to clear remaining credit without a loss. T 5 rule does not give much room to accumulate any new credit from this year. Credit issue is mostly diluted reaming issues may also be solved gradually.

gamaya · 10 Margin Sun Feb 13, 2011 7:55 pm

gamaya

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Guys,

It would be useful to know which brokers supply margin trading in future. This will be useful to asses the situation. If most brokers are providing the facility without much hassle then less reason to worry.

From my side, I deal with 3 Brokers.

1.Capital Alliance is to provide margin trading through one of their related company. I signed one agreement with them.

2.Capital Trust is to provide margin facility. I have below 1 mill portfolio with them but they still provide margin. They got me to sign the Commercial Bank Application. It seems Com Bank provide provide this to small investors with Cap. Trust. An BTW Cap. Trust has there own Licences margin provider company.

3.SC Securities are not supplying. however they asked me to get the facility through a Bank.

Appreciate your inputs.

.

abc

abc

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Hi all,
Don't mislead retail investors for the sake of clearing your or big investor's credit.

san1985

san1985

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xmart wrote:O-key.. investors who are having more than 1M portfolio surely go for the margin option. even during last Oct- Dec blackout season most of credits were cleared. but there are few(but in Bn) of credits remains inside the market. since huge portion of credit from mid cap investors, they had enough time for margin. then problem remain with small retail investors.

when SEC impose T+5 rules, no credits were allowed to accumulate during this year. so, we can hold credits which carry forward from last year. that is simple expression. but as i know, when you buy on credit in this year and settling on T+5, you are settling previous accumulated credits. you cannot leave last year credits as it is and settle this year credits. simply, you had 500,000 credit which brought forward from last year. then on 1st of Jan you bought another 500,000 on credit. then 6th Jan you have to settle 500,000. but when you settle this amount, automatically you are settling early 500,000. not later one. this came across me. I don't know about others. in this case finally I had to settle all 1 Mn. so I don't have to bother about credit now. mean time I got margin too. but use it wisely. never use margin more than 90% of it.

so, I don't think market may react it. somehow investors may bit more cautious and stay away from the market. so, I don't expect market to perform after the 1st week of March. but market will heavily react to June 31st clearance. it is the doomed day.

thank you

My first post here...
Im also planning to get the margin trading facility..
Which is da place that gives the best rates as u guys know??

milanka · 13 I activatd this link in Early Feb. Tue Mar 15, 2011 3:07 pm

milanka

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I activatd this link in Early Feb , And now as at 15th March 2011 we are going thru the clredit clearance. Most members said there is no credit to be cleared . We may go through the same process by End June. So be ready.

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Market Responce to Credit Clearance - 50% by March 2011

1 Market Responce to Credit Clearance - 50% by March 2011 Sun Feb 13, 2011 11:43 am

milanka

2 Re: Market Responce to Credit Clearance - 50% by March 2011 Sun Feb 13, 2011 12:00 pm

kpinvest

3 Re: Market Responce to Credit Clearance - 50% by March 2011 Sun Feb 13, 2011 12:21 pm

xmart

4 Re: Market Responce to Credit Clearance - 50% by March 2011 Sun Feb 13, 2011 12:34 pm

RDS

5 Re: Market Responce to Credit Clearance - 50% by March 2011 Sun Feb 13, 2011 12:37 pm

RDS

6 Re: Market Responce to Credit Clearance - 50% by March 2011 Sun Feb 13, 2011 5:48 pm

kpinvest

7 Re: Market Responce to Credit Clearance - 50% by March 2011 Sun Feb 13, 2011 6:01 pm

Monster

8 Re: Market Responce to Credit Clearance - 50% by March 2011 Sun Feb 13, 2011 6:05 pm

Gaja

9 Re: Market Responce to Credit Clearance - 50% by March 2011 Sun Feb 13, 2011 6:12 pm

ShareShares

10 Margin Sun Feb 13, 2011 7:55 pm

gamaya

11 Re: Market Responce to Credit Clearance - 50% by March 2011 Sun Feb 13, 2011 11:14 pm

abc

12 Re: Market Responce to Credit Clearance - 50% by March 2011 Mon Feb 14, 2011 1:57 am

san1985

13 I activatd this link in Early Feb. Tue Mar 15, 2011 3:07 pm

milanka

14 Re: Market Responce to Credit Clearance - 50% by March 2011

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