Apr 8 2008, 12:41 AM
QUOTE(cherroy @ Mar 11 2008, 11:22 PM)
The lower the commission, the better is, but excessively encourage people to do intra-day trading is not a way to promote healthy investment habit in stock market. After all short term gain is peanut compared to long term gain. I had seen plenty of 'dead body' around especially those with margin trade and short term trade one.
The more people do with short term trade like intraday trade, the higher the market volatility is, which investment banks and Bursa are the ultimate winner of it.
We need volume to drive the market, speculators create the perfect volaitlity to get teh market moving. Look at the market now 10 mths before and after, bearly anyone wants to trade in the KLSE.The more people do with short term trade like intraday trade, the higher the market volatility is, which investment banks and Bursa are the ultimate winner of it.
The market is completely directionless and illiquid to begin with, no one is bothered looking at equity market.
This is after all a free market, there is only so much you can control the market and this is the only path to a mature market not guided by greed and emotion but by thinking.
Without volatility you alo expose your market to foreign institutions whom have the money to buy in to local stocks, which in the end the losers are Malaysian investors. They are free to manipulate the market at their whim and fancy.
Look at the FCPO market, BMDB has raised the initial margin rates through the ceiling to control the market at RM 15,000 per contract.
Which sane investor would dump Rm 15,000 into the market?
For locals this maybe the truth, but from what I see on my daily papaer work it seems like foreign hedge funds are having their own party! Rm 15,000 is nothing, so is losing it cause its clients money and their clients r loaded.
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