Don't laugh but it sure looks like signs of panic by the capital market regulators are appearing. I wonder what we can expect to be put into effect this weekend before markets open on Monday morning. Looks like Pakistan have full fledged panic. New rules limit down days for each listing to 1%, no short selling, $702m buying fund to support market. http://www.bloomberg.com/apps/news?pid=20601087&sid=aDYwCNHYC214&refer=home Pakistan Stock Trading Falls to 10-Year Low After Support Plan By Pooja Thakur and Farhan Sharif July 11 (Bloomberg) -- Pakistan stock trading fell to the lowest level in a decade after regulators introduced measures to halt a two month slump that caused the benchmark Karachi Stock Exchange 100 Index to fall 29 percent. Trading slowed 92 percent since the Securities and Exchange Commission of Pakistan limited daily share declines to 1 percent a day on June 24. Fewer than 5.35 million shares changed hands on the Karachi Stock Exchange July 4, the lowest since May 26, 1998, according to data compiled by Bloomberg. Regulators will review today whether the curbs are needed after the exchange announced a 50 billion rupee ($702 million) fund to buy stocks after the close of trading yesterday. While the limits stopped Pakistan stocks from tumbling, they also drove away fund managers concerned about an exchange where rules change overnight. ``If investors realize that there will be regulatory interventions in the normal functioning of the market, they will always be reluctant,'' said Najam Ali, who manages the equivalent of $547 million in Pakistani stocks and bonds as chief executive officer of JS Investments Ltd. in Karachi. Regulators banned short-selling, narrowed the limit on declines from 5 percent and doubled the cap on gains to 10 percent, in measures announced late June 23. Short sellers borrow shares and sell them, hoping to replace the stock at a lower price and pocket the difference. The curbs were introduced after the Karachi Index fell to a 15-month low on concern that the ruling government coalition would collapse because of disputes about judicial appointments and the fate of President Pervez Musharraf. Zero Trading A total of thirty-two of the 100 companies in the benchmark index had zero shares traded yesterday. Turnover in MCB Bank Ltd., Pakistan's second-biggest lender, fell as low as 14,600 on July 4, compared with the average 3.9 million a day over the past year
``If investors realize that there will be regulatory interventions in the normal functioning of the market, they will always be reluctant,'' The Pakistani authorities have just informed me that there is absolutely no need to invest any time learning about the Pakistani market as I will NEVER be investing in a market with regulators who act like they do. Seeing an announcement that the game has been changed on you overnight is a very unsatisfactory aspect of trading. Regulators are incompetent idiots with no conception of markets. Over the years most of my biggest losses have come from regulator or government/central bank action. Some of my worst losses percentage wise have come from regulators supposedly acting to protect retail investors. Actually they act to protect their reputations and thus their salaries and benefits. My personal view is that action which distorts the free functioning of markets should not be allowed or should only be authoriseable at the extreme highest level and thus with accountability.
anyone notice Jamie Dimon of BSC complaining of the need for more regulation? complaining of the need for investigations into the short sellers that participated in wrecking and trashing BSC into the ground? strange, when things were going in their favor, there were no calls for more regulations or paying for the budgets to actually fund the regulators and the rules already on the books...
Does J. P Morgan have any breaches of regulations in its history? If so it is them not supposed rumour mongers who should be getting the prison sentences Dimon is calling for.
At this rate it won't be long and the US will have the same regulations Pakiston have just put in place in their market.