Thursday, June 18, 2009

Investor Information at the NSE in the Fibre Optic World

With fibre optic having landed, there is no longer any excuse for the NSE not to provide info to investors. Or the listed firms for that matter. And if neither is able to evolve in terms of using the technology, I hope that some of the firms that so enthusiastically picked up the vendor licences from the NSE can step up to the plate. It should also encourage ibs and brokers to move into better data and trading services provision. So what kind of information would I envisage the NSE and the vendors to be able to provide to investors at almost no extra cost, just extra brainpower. Note that this information would provide the NSE with a lot of upside in terms of increased trading volumes, number of transactions and improved investor knowledge:

  1. Email alerts- allow existing investors or potential investors to register with your website so you email alerts to them:
    1. When a share price reaches a particular value-this would be useful for investors who do limit orders
    2. When a share price changes by a %-this would be useful for day traders or even medium term investors
    3. When a particular firm’s director changes his shareholding-it’s usually a signal of something afoot. Director maybe leaving soon, maybe optimistic/pessimistic about the firm’s prospects.
    4. When a particular firm’s shareholders change their holding by more than 1%- usually impacts the share’s price. Would have saved a lot of small Uchumi investors who would have noticed the Kirubi trades.
    5. Any major (price moving), announcements for a particular firm-so this covers results announcements, bankruptcy filings; cancelled revenue generating contracts; divestures of loss-making operations.

  1. Holdings: For brokers and CDSC there is now absolutely no excuse for not giving investors the ability to view their cd accounts via the web during trading hours.
  2. Live trading: This is not so much the information but surely we can now trade live. If its funds, investors can send a certain amount beforehand.
The above would collectively see a 20%+ increase in NSE transactions in the short-term imho.

Lakini, there is the small barrier of required increase in transparency. Equity and Co-op have recently signed 7 year non-disclosure exmptions with CBK of their shareholders...


Ssembonge said...

Maina, There is nothing like 'provide to investors at no extra cost' when you are talking about technology. Unless you mean offering it for free. It costs a lot of money to build such systems.

It is probably cheaper for brokers to provide this service over the phone compared to the inital outlay of setting these systems up.

MainaT said...

I don't what your experience has been, but as it happens I awas talking to a proj manager woth one of the brokers here. Client base is north of 1.6m. The coding for the information bit (email alerts, portfolio view) took around half a day. Testing for volumes and integration to live prices around 2 weeks.
The live trading set up was expensive, but only because of the FSA bureaucracy.

coldtusker said...

Well... if you want to provide it for free... I will sign up.

As for day-trading... the CDSC is not set-up.

MainaT said...

I'm surprised you fellas are doubters on this thing. Si you've traded abroad. I get all this data (not the live-trading) for free already...

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