Archive for May 28th, 2008
The Tokyo Stock Exchange is the most prominent stock exchange of Japan. The stocks that are listed under the Tokyo Stock Exchange are classified into:
1.First Section aimed for large companies
2.Second section for mid-sized companies
3.Mothers sections for the high growth start up companies.
Participation in the Tokyo Stock Exchange
89 domestic and 19 foreign securities company participate in the Tokyo Stock Exchange Trading.
Evolution of the Tokyo Stock Exchange
- The Tokyo Stock Exchange started as Tokyo Kabushiki Torihikijo on May 15, 1878.
- In 1943 the Tokyo Kabushiki Torihikijo merged with other stock exchanges of Japan to form the Japanese Stock Exchange.
- After Nagasaki was bombed the Tokyo Stock Exchange was closed but it was reorganized soon.
- In the post war era the Tokyo Stock Exchange reopened in 1949 with its current name.
- Between the period 1983 to 1990 the Tokyo Stock Exchange witnessed an extraordinary growth. As far as the market capitalization was concerned the Tokyo Stock Exchange occupied about 60% of the market capitalization of the whole world. Although the performance of the Tokyo Stock Exchange has fallen since then, even now it ranks the third largest in terms of the market capitalization of the listed shares.
- In 2001, the Tokyo Stock Exchange took the form of a corporation.
Initially the Tokyo Stock Exchange was a physical stock exchange where trading took place by the open outcry system. But in April 30, 1999 the Tokyo Stock Exchange closed and switched over to an electronic mode of transaction.
Indices used in Tokyo Stock Exchange
The indices that are mainly used in to track down the performance of the Tokyo Stock Exchange are:
- Nikkei 225 of companies that is selected by Japan’s largest business newspaper- the Nihon Keizai Shimbun
- Topix Index: This index is based on the share prices of the First Section Companies.
- J30 Index: This index caters to the large industrial companies that are maintained by Japan’s major broadsheet newspapers.
The Tokyo Stock Exchange is the most prominent stock exchange of Japan. The stocks that are listed under the Tokyo Stock Exchange are classified into:
1.First Section aimed for large companies
2.Second section for mid-sized companies
3.Mothers sections for the high growth start up companies.
Participation in the Tokyo Stock Exchange
89 domestic and 19 foreign securities company participate in the Tokyo Stock Exchange Trading.
Evolution of the Tokyo Stock Exchange
- The Tokyo Stock Exchange started as Tokyo Kabushiki Torihikijo on May 15, 1878.
- In 1943 the Tokyo Kabushiki Torihikijo merged with other stock exchanges of Japan to form the Japanese Stock Exchange.
- After Nagasaki was bombed the Tokyo Stock Exchange was closed but it was reorganized soon.
- In the post war era the Tokyo Stock Exchange reopened in 1949 with its current name.
- Between the period 1983 to 1990 the Tokyo Stock Exchange witnessed an extraordinary growth. As far as the market capitalization was concerned the Tokyo Stock Exchange occupied about 60% of the market capitalization of the whole world. Although the performance of the Tokyo Stock Exchange has fallen since then, even now it ranks the third largest in terms of the market capitalization of the listed shares.
- In 2001, the Tokyo Stock Exchange took the form of a corporation.
Initially the Tokyo Stock Exchange was a physical stock exchange where trading took place by the open outcry system. But in April 30, 1999 the Tokyo Stock Exchange closed and switched over to an electronic mode of transaction.
Indices used in Tokyo Stock Exchange
The indices that are mainly used in to track down the performance of the Tokyo Stock Exchange are:
- Nikkei 225 of companies that is selected by Japan’s largest business newspaper- the Nihon Keizai Shimbun
- Topix Index: This index is based on the share prices of the First Section Companies.
- J30 Index: This index caters to the large industrial companies that are maintained by Japan’s major broadsheet newspapers.
Issues relating to Information Technology
A new transaction system was installed by Fujitsu to manage large scale transactions. But due to bugs in the system the Tokyo Stock Exchange could operate only for 90 minutes on November 1, 2005. Trading was stopped for four and a half hours. Again while the Initial Public Offering of J-Com, an employee of the Mizoho Securities Co. Ltd made a typing error due to which there was a net loss of 347 million US dollars. This loss was shared between the exchange and the Mizoho Securities Co. Ltd. Such incidents simply reflect the lacunae of the Tokyo Stock Exchange relating to error checking, adequate safeguards, reliability, transparency, testing, confidence and profits
May 28th, 2008
The Hong Kong Stock Exchange, as the name suggests, is the stock exchange of Hong Kong. With a market capitalization of over US $1.87 trillion the Hong Kong Stock Exchange ranks seventh in the world stock exchanges.The Evolution of the Hong Kong Stock Exchange may be tracked under the following head:
Evolution of Hong Kong Stock Exchange:
The Association of Brokers was founded in 1891.
In 1914 the Association of brokers was renamed as the Hong Kong Stock Exchange
The Hong Kong Shareholders Association Ltd was established in 1978 for the sharing of information between the Hong Kong Stock Exchange and the other exchanges.
In 1986 the Hong Kong Stock Exchange merged with the other exchanges but continued to be known as the Hong Kong Stock Exchange. The other exchanges were Far East Exchange Limited, Kam Ngan Stock Exchange Limited and the Kowloon Stock Exchange Ltd. It also presented itself as the Stock Exchange of Hong Kong.
In 2000 the Hong Kong Exchanges and Clearing became the holding company of the Hong Kong Stock Exchange. The held the Hong Kong Futures Exchange established in 1976 and the Hong Kong Securities Clearing Company Ltd established in 1989.Products of the Hong Kong Stock Exchange
The products offered by the Hong Kong Stock Exchange are issued by the securities and the derivatives market.
The following are the products of the Hong Kong Securities Market
- Equity: The equity securities are basically of two types that are issued by the Hong Kong Stock Exchange. They are ordinary and preference shares.
- Derivative Warrant Resource Center
The Derivative Warrant Resource Center confirms the information provided by the Derivative market. They are not responsible for any loss that may arise out of inaccuracy of information.
- Callable Bear or Bull Contracts The Callable Bear or Bull Contracts are structured products. This keeps track of the performances of the underlying asset. This does not require the investors to pay the full price that is required to purchase the actual asset. The investors who enter such a contract take either a bullish or a bearish position. These contracts have fixed expiry dates that are issued by a third party, generally an investment bank.
- Listed Equity Linked Instruments
The Listed Equity Linked Instruments are structured products that are issued by banks and other financial institutions. These products are tailored for retail and institutional investors who want to earn an interest rate higher than the rate of the ordinary time deposits. There are three types of ELIs that are traded in the Hong Kong Stock Exchange and they are Bull , Bear and Range.
- Exchange Traded Funds
- Unit Trust or Mutual Funds
- Bonds
- Pilot Program for trading US securities
The derivative market products include the Risk Disclosure Statement, Equity Index Products, Equity Products, Fixed income and interest rate products.
May 28th, 2008
The Australian Stock Exchange is the most prominent stock exchange of Australia. The Australian Stock Exchange was renamed as the Australian Securities Exchange from December 5, 2005.
Evolution of the Australian Stock Exchange
- The Australian Options Market was established in 1976 specialized in trading call options.
- The Australian Stock Exchange Indices substituted the Melbourne and Sydney Stock Exchange Indices in 1980.
- The broker commission rates were deregulated in 1984.
- The warrant market was established in 1990.
- Fixed interest securities began in 1993.
- The Australian Stock Exchange finally merged with the Sydney Futures Exchange in 2006.
Stocks traded, market indices and the major listed companies under the Australian Stock Exchange
The major stocks traded in terms of their market capitalization are BHP Billiton, Commonwealth Bank of Australia, Telstra Corporation, National Australian Bank, Australia and New Zealand Banking Group.
The most important index that is used in the Australian Stock Exchange is the S&P/ASX 200 which is an index made up of the top 200 shares. This substituted the All Ordinaries Index.
The listed companies under the Australian Stock Exchange are not regulated by them but by the Australian Investments and Securities Commission.
Trading takes place by the integrated trading system also known as the Click-XT system. There are two types of orders that are accepted, one is the market order required to buy or sell at the market and the second is the Limit order.
Short selling of shares us permitted but is restricted to the designated stocks.
The market maker has a choice between a set of 18 options or an option that expires in nine months. Low exercise price option is also available.
The interest rate market in the Australian Stock Exchange consists of corporate bonds, floating rate notes and bond-like preference shares.
The futures that are traded in the Australian Stock Exchange include the ASX 50, ASX 200 and the ASX property indices.
May 28th, 2008
Most usual stock market strategies follow the same approach that goes along the lines of researching extensively potential stock picks and sectors then buy the stock and sit back and hope that the market moves in your favour.
What most people (especially amateur investors) fail to discover is that professional traders (the ones who you hear about getting multi million dollar bonuses each year) do not follow this approach/strategy.
What not to do
The dot com crash of 2001 caught out many of these amateur investors that had blindly followed the stock tips of newspapers, internet forums and colleagues with equally little knowledge of successful trading strategy.
Directional Trading does not work
The big mistake with this strategy is that it is essentially a directional strategy. In simple terms it is only successful if the stock bought rises in value. Using the dot com crash example above, as soon as the market begins to fall (as it always does every few years), so too does the value of your investments. Many individuals lost thousands and thousands by making this mistake in 2001.
The big secret
All of the large investment banks that post millions of dollars of profit per year have automated trading systems. Trading strategies are written into computer programs that will automatically analyse stocks, market data and choose a list of ones to invest in. The entire strategy is run and performed on a computer.
You may want to read that again. What it says is that successful traders actually have computer programs that do all the hard work for them and find stocks to invest in.
It gets even better
Successful traders can make money from stocks falling in value. This sounds crazy however it is true. It is possible to easily profit from a stock when it is value is falling. The more it falls, the more you can profit.
This type of trading then is not dependant on stock prices rising. Think about that for a minute. You can make money whether a stock rises or falls in value. Is it any wonder your broker has never mentioned this to you?
What is this trading strategy?
This type of trading (not reliant on rising prices) is called volatility trading. What you need a stock to do is move in value. As already discussed it does not matter if it rises or falls in value, what the strategy needs is volatility. Volatility lets you position yourself to make a profit no matter what the direction of the price is.
How do you learn to trade this way?
Well the best way is to learn from the professional. There are many ex traders out there willing to show you how to profit from a volatility trading strategy. The best bit is that once you have implemented such a strategy, because the computer does most of the work you won’t need to spend hours pouring over charts, graphs and table of data.
Instead all you will need to do is take the stock selection from the system, check for some indicators, check you broker offers the stock then pick up the phone to your broker. It is that easy.
Enjoy your trading and good luck!
May 28th, 2008
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