Invest Positively

The US stock market is rigged in favour of high-speed electronic trading firms, which use their advantages to extract billions from investors, according to Michael Lewis, author of a new book on the topic, “Flash Boys: A Wall Street Revolt.” High-frequency trading (HFT) is a practice carried out by many banks and proprietary trading firms using sophisticated computer programs to send gobs of orders into the market, executing a small portion of them when opportunities arise to capitalize on price imbalances, or to make markets. HFT makes up more than half of all US trading volume. CNN Link

Usually, an upgrade or revamp is good news because it makes everybody’s lives easier. We get upgraded smartphones with bigger screens and faster processing power, for example, so we waste less time accessing applications, squint less at words and images, and are better distracted by smoothly streaming Korean dramas on the train ride to the office.

Catalist-listed Albedo shares bounced back a tad yesterday after an injurious showing last Wednesday when its stock price plunged more than 40 per cent following a report that its lifeline-deal involving sizeable Iskandar land had fallen through.

The large operator does not, as a rule, go into a campaign unless he sees in prospect a movement of from 10 to 50 points. Livermore once told me he never touched anything unless there were at least 10 points in it according to his calculations. Link

Report in The Star Online said to have triggered plunge in share price

Singapore’s stock exchange felt it needed to clarify the issue. “Media commentaries” had noticed that the share price of agricultural trader Olam International had a nearly 40% run-up in the six weeks before a group led by Singapore state fund Temasek announced a bid for the company. Others noticed, too, including Carson Block of Muddy Waters, who had previously fingered Olam as a fraud—accusations it vociferously denied.

It appears that in the wake of last October’s penny stock crash and the measures to strengthen the market that have been proposed since, the Singapore Exchange (SGX) may be going into misplaced regulatory overkill. One case that stands out is TT International (TTI) - the company having been queried on Monday about a surge in volume traded of its shares, which was then followed by a “Trade With Caution” warning.

The commentary, “Why no SGX query on Olam price surge? (BT, March 15), mentions the perception that SGX may be less willing to query government-linked companies (GLCs).

The Singapore Exchange’s (SGX) recent attempt to enhance its regulatory might was put to its first major test this past week, when Temasek Holdings made an offer for Olam International. The jury is still out on how effective SGX’s new rule is, but the incident has definitely highlighted its practical issues.

The RMB has reached its equilibrium; currency volatility will spill. In a bold move, the PBoC announced to double the RMB trading band from 1 per cent to 2 per cent. This is a historic moment. Yet at the time of the Crimean referendum and after a few weeks of currency gyration, the reception to this significant announcement in the domestic market is somewhat underwhelming. Consensus discussions have been centred on what such a move means for monetary policy manoeuvres at a later date. Yet parsing through the PBOC’s scripted press response, we think there is much more than meets the eyes.

This will be followed by other transactions to transform loss-making Catalist firm into a larger integrated real estate player

Trading was within price ranges set by analysts, it says

Last month, when the Monetary Authority of Singapore and Singapore Exchange (SGX) proposed measures to strengthen the local securities market that included new warning signals to be incorporated in SGX’s questioning of listed firms over odd price movements, hopes were high that after years of largely ineffective - and sometimes farcical - querying, substance would finally trump form.

Singapore state investor Temasek Holdings has offered to buy all shares in Olam owned by minority shareholders in a cash deal that values the commodity trading firm at US$4.3 billion.

When it comes to short-selling disclosure in the stock market, the goal is to provide investors with a realistic and fairly accurate picture of how widespread the activity is and by extension a handle on the level of bearish sentiment either in individual stocks or the market as a whole.

The controversial practice known as contra trading has been under scrutiny ever since the penny stock crash of last October. Because of claims (as yet unproven) that contra was a contributory - or perhaps aggravating - factor during that sorry episode, there have been calls to either abolish or curb the practice because allowing punters to buy stocks with no capital upfront is outdated, risky and encourages gambling.