MarketWatch

[BLUEMONEY]

Originally Posted by mattino

I hope the time frame the market makers would be given to return the money would be long enough to allow a relatively strong market stability and investor's confidence;and they would employ a good stategy to sell the stocks they've acquired when they are required to pay back,so that their exit would not cause another market panic.
I think enough time has been spent on the 1% maximum downward price movement interim rule.I think we should start discussing the yet to be implemented initiatives especially the "market makers" and the "share buy back" initiatives,send in data from different sources and discuss their possible impact on the market both in the immediate and long-term before guidlines for their implementation are announced.These are some things i have on market makers(sources not included,however)-i think they should set the ball rolling on this subject-
The market maker assures that there will be a market for the security; however, they don’t guarantee it will be at the price you want.

Market-makers generally must be ready to buy and sell at least 100 shares of a stock they make a market in. As a result, a large order from an investor may have to be filled by a number of market-makers at potentially different prices.
Market Maker Revenues and Stock Market Liquidity
We use an 11-year panel of daily specialist revenues on individual NYSE stocks to explore the relationship between market-maker revenues and liquidity. If market makers suffer substantial trading losses, lenders may respond by increasing funding costs or reducing credit lines, and market makers should respond by reducing liquidity provision. The data indicate that when specialists in aggregate lose money on their inventories, market-wide effective spreads widen in the days or weeks that follow, even after controlling for stock returns, volatility, and volume. This suggests an important role for market-maker financial performance in explaining liquidity time-variation. Revenues at the specialist firm level explain liquidity changes in that firm's assigned stocks. Revenues at the individual stock level do not explain changes in individual stock liquidity, consistent with a financial constraints model with broadly diversified intermediaries. Aggregate specialist revenues are increasing in conditional return volatility, as is revenue volatility. Specialist margins (specialist revenue per dollar of trading volume) are essentially constant across stocks, implying limited scope for cross-subsidization.
market maker
Definition
A brokerage or bank that maintains a firm bid and ask price in a given security by standing ready, willing, and able to buy or sell at publicly quoted prices (called making a market). These firms display bid and offer prices for specific numbers of specific securities, and if these prices are met, they will immediately buy for or sell from their own accounts. Market makers are very important for maintaining liquidity and efficiencyfor the particular securities that they make markets in. At most firms, there is a strict separation of the market-making side and the brokerage side, since otherwise there might be an incentive for brokers to recommend securities simply because the firm makes a market in that security.

Of Course the fund is for the long term though it is not free. So I believe the Government will benefit if they handle it properly. The fund is meant to be a standby backup fund so if thier exit cuases panic in the market, it will still be there to cushion the effect.

[donchisel]

Another heavy decline today to the tune of 0.34%. Value of trades stood at N8m +. May be due to Afribank volumes.

[BLUEMONEY]

Originally Posted by donchisel

Another heavy decline today to the tune of 0.34%. Value of trades stood at N8m +. May be due to Afribank volumes.

N8 million + or N8 Billion + ?????

[billions]

It seems d index did not change today or maybe they hv not updated d NSE site.

[billions]

The index decreased by 0.34%(proshare).

[panej]

Originally Posted by mattino

I hope the time frame the market makers would be given to return the money would be long enough to allow a relatively strong market stability and investor's confidence;and they would employ a good stategy to sell the stocks they've acquired when they are required to pay back,so that their exit would not cause another market panic.
I think enough time has been spent on the 1% maximum downward price movement interim rule.I think we should start discussing the yet to be implemented initiatives especially the "market makers" and the "share buy back" initiatives,send in data from different sources and discuss their possible impact on the market both in the immediate and long-term before guidlines for their implementation are announced.These are some things i have on market makers(sources not included,however)-i think they should set the ball rolling on this subject-
The market maker assures that there will be a market for the security; however, they don’t guarantee it will be at the price you want.

Market-makers generally must be ready to buy and sell at least 100 shares of a stock they make a market in. As a result, a large order from an investor may have to be filled by a number of market-makers at potentially different prices.
Market Maker Revenues and Stock Market Liquidity
We use an 11-year panel of daily specialist revenues on individual NYSE stocks to explore the relationship between market-maker revenues and liquidity. If market makers suffer substantial trading losses, lenders may respond by increasing funding costs or reducing credit lines, and market makers should respond by reducing liquidity provision. The data indicate that when specialists in aggregate lose money on their inventories, market-wide effective spreads widen in the days or weeks that follow, even after controlling for stock returns, volatility, and volume. This suggests an important role for market-maker financial performance in explaining liquidity time-variation. Revenues at the specialist firm level explain liquidity changes in that firm's assigned stocks. Revenues at the individual stock level do not explain changes in individual stock liquidity, consistent with a financial constraints model with broadly diversified intermediaries. Aggregate specialist revenues are increasing in conditional return volatility, as is revenue volatility. Specialist margins (specialist revenue per dollar of trading volume) are essentially constant across stocks, implying limited scope for cross-subsidization.
market maker
Definition
A brokerage or bank that maintains a firm bid and ask price in a given security by standing ready, willing, and able to buy or sell at publicly quoted prices (called making a market). These firms display bid and offer prices for specific numbers of specific securities, and if these prices are met, they will immediately buy for or sell from their own accounts. Market makers are very important for maintaining liquidity and efficiencyfor the particular securities that they make markets in. At most firms, there is a strict separation of the market-making side and the brokerage side, since otherwise there might be an incentive for brokers to recommend securities simply because the firm makes a market in that security.

How can "Market Makers" operate under the (1%) minimum loss and (5%) maximum gain environment which is very contrary to the way they operate?

[zubychyle]

Originally Posted by donchisel

Another heavy decline today to the tune of 0.34%. Value of trades stood at N8m +. May be due to Afribank volumes.

That should be expected, it's a friday and the market usually looses steam towards the end of the week. anyway just a trend i noticed when the market was "normal", lets see how next week will play out.

[hispy99]

Originally Posted by panej

How can "Market Makers" operate under the (1%) minimum loss and (5%) maximum gain environment which is very contrary to the way they operate?

that is the $1B question. I'm waiting for the regulators to release the guidelines for market makers.

[hispy99]

Originally Posted by BLUEMONEY

Of Course the fund is for the long term though it is not free. So I believe the Government will benefit if they handle it properly. The fund is meant to be a standby backup fund so if thier exit cuases panic in the market, it will still be there to cushion the effect.

A situation where govt provides funding (bears the risk) and private individuals invest (market makers) is a recipe for disaster. It is a case of privatizing the profits and socialising the losses (tax payers bear the losses). That is the scenario playing out in the U.S morgage industry.

[hispy99]

Originally Posted by billions

The index decreased by 0.34%(proshare).

For thos interested, the index closed at 49,615.55

[zubychyle]

Originally Posted by hispy99

A situation where govt provides funding (bears the risk) and private individuals invest (market makers) is a recipe for disaster. It is a case of privatizing the profits and socialising the losses (tax payers bear the losses). That is the scenario playing out in the U.S morgage industry.

i don't think they've come up with the blue print for the stabilization fund, until they do that we can't speculate the way it will work. but one thing is for sure they can't bear the reisk in the market sheepishly unless they have some self centred people formulating the policy.

anyway,lets see what they come up with.

[BLUEMONEY]

[quote=hispy99;29761]A situation where govt provides funding (bears the risk) and private individuals invest (market makers) is a recipe for disaster. It is a case of privatizing the profits and socialising the losses (tax payers bear the losses). That is the scenario playing out in the U.S morgage industry.[/QUOTE]



We are still waiting for the Modalities on how they will go about with the Fund but I do believe that is not how they will go about it. Common Sense that is not so common should tell them that Profits should not be privatize since the people are the ones that will bear the losses if it arises.

I also have this feeling that this issue will be Trashed in the Senate if & when they go to seek their Approval. Again I dont know what they will come up with, but Government stands to gain a lot if they handle this very well.

How Funny things have changed, before it was the market that was supposed to Fund the 7 point Agenda of MR PRESIDENT but now the F.G is now the one to Fund the market. I am not jumping to conclusion until I see the Blueprint but if they handle this very well the F.G will Benefit from it.

[knightofdelta]

Originally Posted by waaan5

Hisppy, you know chevron stock has been climbing for weeks 'cos of this news of divestment, so you do not need a p.jet to still meet it on the high.

The point I think we should be discussing is the stubborn "manualization" of the NSE and cscs despite the internet age we are in (not taking full advantage of the internet, and IT). Most things still need you on the ground to pull thru in that market - which should not be. You do everything for example with Fidelity Brokerage Services LLC online - when can we get to that point in Nigeria?

@Waaan5
I sense some ambiguity here. How can you dash down to Naija just to sell some stocks and then go back and then claim to be in the lower middle class? If someone can be doing like that and then refer to himself as lower middle class, that means I am below poverty because before I can leave my roofless shack in the creek and swim to civilization to get a flying boat that will take me to Warri where I will board a bus to Lagos to see my stockbroker, you go don finish selling and buying and jet back to the States, while I am still midway between Warri and Lagos.

Oga, from today, your name na Trillions

[hispy99]

[quote=BLUEMONEY;29782]

Originally Posted by hispy99

A situation where govt provides funding (bears the risk) and private individuals invest (market makers) is a recipe for disaster. It is a case of privatizing the profits and socialising the losses (tax payers bear the losses). That is the scenario playing out in the U.S morgage industry.[/QUOTE]



We are still waiting for the Modalities on how they will go about with the Fund but I do believe that is not how they will go about it.

Let us hope so.....don't know how they can avoid this though if the govt provides the funds. Anyway, lets wait fr them to release the modalities.

[BLUEMONEY]

Originally Posted by panej

How can "Market Makers" operate under the (1%) minimum loss and (5%) maximum gain environment which is very contrary to the way they operate?

When these guys are ready, the 1% Cap will be definately be lifted.