•  
Tue, 25th April 2017

Anirudh Sethi Report

  •  

Archives of “stock market” Tag

India : P-NOTE INVTS HIT 4-MONTH HIGH OF RS 1.78L-CR IN MAR

Investments in domestic capital markets via participatory notes (P-notes) have surprisingly surged to 4-month high of Rs 1.78 lakh crore at the end of March despite stringent norms put in place by Sebi to curb inflow of illicit funds. P-notes are issued by registered Foreign Portfolio Investors to overseas investors who wish to be a part of the Indian stock markets without registering themselves directly. They however need to go through a proper due diligence process.

According to Sebi data, total value of P-note investments in Indian markets – equity, debt and derivatives -increased to 1,78,437 crore at March-end, from Rs 1,70,191 crore at the end of February. Prior to that, the total investment value through P-notes stood at Rs 1.75 lakh crore in January-end and Rs 1.57 lakh crore in December-end. In March, investments through the route had touched the highest level since November, when the cumulative value of such investments stood at Rs 1,79,648 crore.    

FTSE wipes out the year’s gains at the close

European stock market close 19 April 2017

  • FTSE-0.3 %
  • Cac +0.4%
  • Dax +0.2%
  • Ibex +1.2%
  • FTSE Mib +2.0%

European bonds

  • Italy 2.29% +3bp
  • Spain 1.68% +1bp
  • Portugal 3.82% +1bp
  • Germany 0.205% +5bp
  • Greece 6.70% -9bp

The damage was done yesterday to the FTSE but today it’s seen red YTD. The majority of that is due to the rise in the quid affecting it’s value.

SEC targets fake stock news on financial websites

The U.S. Securities and Exchange Commission is targeting stock rampers and scammers

And not too soon …
  • SEC to focus on stock promotion schemes “in which writers were secretly paid to post hundreds of bullish articles about public companies on financial websites”
  • Twenty-seven individuals and entities have been charged with misleading investors
    SEC says it found more than 450 problem articles

China’s A-shares have better shot at MSCI index

Shanghai and Shenzhen shares have a greater chance at joining a major emerging-market stock index after recent market reforms, though a smaller pool of issues under consideration means entrance will do less than investors and China’s government would like.

MSCI of the U.S. is soliciting institutional investors’ input on whether to include A-shares, or yuan-denominated shares listed on the Chinese mainland, in its Emerging Markets Index. Citigroup gives China’s bid a 51% chance of success, in light of recent reforms.

 These odds are a good deal better than when the question was first considered in 2014. A-shares have been kept out of the mix three years running amid concerns that China’s capital markets are insufficiently open.

The so-called Qualified Foreign Institutional Investor, or QFII, scheme was one key factor. This scheme was long foreign institutions’ only option for buying A-shares. Each entity’s dealings were subject to strict quotas, and the value of remittances was capped at 20% of net assets each month. MSCI naturally refused to include shares in its index that could not be freely bought and sold, and Beijing was slow to change the system to address those concerns.

The index operator has also looked askance at Chinese listed companies’ ability to halt trading of their shares at will — an option that, at one point, roughly 50% of companies had taken. A need for prior approval to create products incorporating A-shares also left MSCI leery.

Citi: Central Banks “Took Over” Markets In 2009; In December The “Unwind” Begins

Citigroup’s crack trio of credit analysts, Matt King, Stephen Antczak, and Hans Lorenzen, best known for their relentless, Austrian, at times “Zero Hedge-esque” attacks on the Fed, and persistent accusations central banks distort markets, all summarized best in the following Citi chart…

… have come out of hibernation, to dicuss what comes next for various asset classes in the context of the upcoming paradigm shift in central bank posture.

In a note released by the group’s credit team on March 27, Lorenzen writes that credit’s “infatuation with equities is coming to an end.”

 What do credit traders look at when they mark their books? Well, these days it is fair to say that they have more than one eye on the equity market.

Understandable: after all, as the FOMC Minutes revealed last week, even the Fed now openly admits its policy is directly in response to stock prices.

As the credit economist points out, “statistically, over the last couple of years both markets have been influencing (“Granger causing”) each other. But considering the relative size, depth and liquidity of (not to mention the resources dedicated to) the equity market, we’d argue that more often than not, the asset class taking the passenger seat is credit. Yet the relationship was not always so cosy.  Over the long run, the correlation in recent years is actually unusual. In the two decades before the Great Financial Crisis, three-month correlations between US credit returns and the S&P 500 returns tended to oscillate sharply and only barely managed to stay positive over the long run (Figure 3).”

China’s top securities regulator vows to punish “iron roosters” with no dividend payout

China’s top securities regulator urged listed companies to reward investors with cash dividends, vowing to punish stingy “iron roosters.”

Liu Shiyu, Chairman of the China Securities Regulatory Commission (CSRC) also warned listed firms against raising money for blind investments, or designing complicated share structures that facilitate insider trading and other malpractices.

 “Paying cash dividends is a basic way to reward investors … and the ultimate source of a stock’s intrinsic value,” Liu said in a recent speech, a transcript of which was posted on CSRC’s website on Saturday.

CSRC will take “tough measures” against those “iron roosters” who haven’t plucked a single feature for many years, even though they have the ability to pay dividends, Liu said.

Liu, installed as head of China’s securities watchdog following the 2015 stock market crash, has made investor protection his priority, having stepped up a crackdown on market manipulation and tightened disclosure rules.

12 Trading Mantras from Trading Legend Mark Douglas

Fill the “profit gap” with the right things…

In his books and seminars, Mark Douglas often refers to something he calls the “profit gap”. What he is talking about is basically the difference or “gap” between the potential profit you could achieve if you had just followed your trading method and what your actual bottom line results are.

Traders often begin trading a method with very high hopes. They want to produce an income they can rely on and get consistent results from their trading. However, this is only possible if you are trading an effective method with discipline and consistency, which most people simply do not do and as a result, they experience the profit gap that Mark refers to.

The key point that Mr. Douglas makes about this profit gap is that traders typically try to fill the gap by learning more about the market, changing methods, spending more time in front of their computers etc. However, what they really need to learn is more about themselves and how they interact with the market. Essentially, they need to acquire the “proper mental skills” to trade their method as they should and to get the most out of it, in order to properly fill the profit gap.

Winning and being a winning trader are two different things…

Anyone, and I literally mean anyone, even a 5-year-old child, can find themselves in a winning trade. It does not require any special skill to get lucky on any particular trade and hit a winner. All you have to do is open your trading platform and push a few buttons and if you get lucky, you can make a lot of money in a short amount of time.

As a result of the above, it’s natural for a trader who has not yet developed his or her trading skills to take the leap from “it’s easy to win” to “it can’t be that much harder to make a living from this”.

This is how many traders’ careers get started. Needless to say, it is also how they get on the path to losing a whole lot of money just as fast or even faster than they made it.

A winning trader has the mental skills to realize, understand and utilize the FACT that any particular trade he or she takes has basically a random outcome. That is to say, they cannot possibly know the outcome of that trade until it is over. The winning trader knows this and they also know that they must trade in-line with this belief over a large series of trades and ignore all the temptations and feelings that get kicked up on each trade they take. They are able to do this because they keep their eyes on the bigger picture. That bigger picture is the fact that IF they execute their method flawlessly, over and over, over a long enough period of time / series of trades, they will come out profitable.

Thus, do not mistake a winning trade for you being a winning trader, yet. A very easy trap to fall into.

10 Favorite Quotes from Reminiscences of a Stock Operator

Although Jessie’s life ended too early, his words of wisdom live on for discovery. The book is filled with obscure references and colorful characters long forgotten by the general public, but the key themes of the text remain as relevant as ever. Therefore, I’ve pulled out my favorite quotes, below, though I highly recommend reading the entire text.

  1. There is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again.
  2. The desire for constant action irrespective of underlying conditions is responsible for many losses in Wall Street even among professionals.
  3. I never lose my temper over the stock market. I never argue the tape. Getting sore at the market doesn’t get you anywhere.
  4. They say you can never go poor taking profits. No, you don’t. But neither do you grow rich taking a four-point profit in a bull market. Where I should have made twenty thousand I made two thousand. That was what my conservatism did for me.
  5. Remember that stocks are never too high for you to begin buying or too low to begin selling.
  6. A man may see straight and clearly and yet become impatient or doubtful when the market takes its time about doing as he figured it must do. That is why so many men in Wall Street…nevertheless lose money. The market does not beat them. They beat themselves, because though they have brains they cannot sit tight.
  7. After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was the sitting. Got that? My sitting tight!
  8. Losing money is the least of my troubles. A loss never bothers me after I take it…But being wrong—not taking the loss—that is what does the damage to the pocketbook and to the soul.
  9. Prices, like everything else, move along the line of least resistance. They will do whatever comes easiest.
  10. The speculator’s chief enemies are always boring from within. It is inseparable from human nature to hope and to fear. In speculation when the market goes against you hope that every day will be the last day—and you lose more than you should had you not listened to hope—the same ally that is so potent a success-bringer to empire builders and pioneers, big and little. And when the market goes your way you become fearful that the next day will take away your profit, and you get out—too soon. Fear keeps you from making as much money as you ought to. The successful trader has to fight these two deep-seated instincts…Instead of hoping he must fear; instead of fearing he must hope.

Nintendo shares top Tokyo trading in fiscal 2016

— Game maker Nintendo’s stock generated the highest turnover here in fiscal 2016, as shares surged on the back of the smash-hit “Pokemon Go” app and retail investors piled in, smelling growth potential in an uncertain business environment.

Nintendo’s trading value, the product of share price and trading volume, jumped fourfold in fiscal 2016 to 17.6 trillion yen ($157 billion), rising to the top of Nikkei’s charts for the first time since data became available 20 years ago. It beat typical high flyers such as Toyota Motor, which came in second at 13.9 trillion yen, and Mitsubishi UFJ Financial Group, which placed third at 13.2 trillion yen.

 “Pokemon Go” jump-started the buying. On July 20, just before the game launched in Japan but two weeks after its U.S. debut, the Kyoto-based company’s trading value hit 732.3 billion yen, the highest one-day total ever for a Tokyo stock. The fever continued later in the fiscal year as sales of the company’s new console, the Switch, beat expectations. Nintendo shares closed this month at 25,835 yen, up roughly 60% in a year.

Retail investors played the lead in the drama. One day trader going by the handle Tesuta says Nintendo shares were the ones he traded most in fiscal 2016, completing more than 4,000 transactions in the year. Tesuta was attracted by the shares’ high liquidity, he said: their price swings were wide, and they were easy to sell short.

Overnight US Market : Broader market up. Dow down.

S&P up +0.11%. Nasdaq up +0.38%

The major US stock indices are ending the session mixed with the broader markets up, while the more specialized Dow Industrial Average down.
  • S&P index is ending the day up 2.56 points or +0.11%
  • Nasdaq composite index is ending the day up 22.40 points or 0.38%
  • Dow Industrial Average is down -42.18 points or-0.20%
The Dow has been down 9 of the last 10 trading days. For the year it is still up 4.54% while the S&P is up 5.46% and the Nasdaq is up 9.56%.