Don't ask where I heard this from...
But there could be 'settlement issues' at the HKEx due to the global financial crisis.
You read it here first (if it's true)...
Lehman can't settle its trade at T+2. Because its assets are frozen.
So like all responsible exchanges, HKEx stepped in to pay cash for Lehman accounts that has bought. And Stepped in to buy stocks today, so that at 4:00pm, all those accounts that sold stocks needs stock to settle their trades.
Amazing.
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柏文兄，你指政府入市干預？
ReplyDelete實中晒大行Ｄ招
唔明喎，乜野係 settlement issue 呀?
ReplyDeleteI guess it should be related to how to arrange Lehman sells their security and stocks on market orderly for cash.
ReplyDelete柏文兄，系咪有人沒錢買單！
ReplyDeleteOr what about hedge funds who can't settle trade as securites are stuck in Lehman's prime brokerage accounts?
ReplyDelete任何睹例都由d官厘定,
ReplyDeleteD睹仔睇例來跟睹.
明唔明?
let me update this entry
ReplyDeleteThe other exchange has the same issue. What do they do? For example Lehmen in Jpn...
ReplyDeleteI think pakman is talking about the T+2 arrangement....
T+2 is a term for settlement upon any Stocks,Investment Units, MPF and any investment vehicles except Cash or Foreign Deposits. T + 2 is widely used all over the world's exchanges when one side facilitate a trade and one side settles the trade. For example, lets say you are the BUY side and buy 10,000 shares of 0857, you placed an order and it gets executed. The bank will freeze your funds in order to settle that trade thru the HKEX exchange and the other side sends the money to the SELLER and the SELLER collects back the money they sell for total - commissions & fees. When Lehman went into Chapter 11, those buy orders still ON their computer screen and it NEVER STOP or SETTLES..That means even the market drops and the guy placed a 1 million shares buy order still active on HKEX, so for the past days, it dropped alot and if the guy at Lehman keep buying when the market is dropping, HKEX do NOT know it until Lehman comes up with the funds 1 days after the trading day. So, the story that Pakman told us is, Lehman already have no money to settle all those shares and if the SELL side wants money, Lehman cant pay them anymore thru HKEX. So, HKEX has use their authority (should be approved by Yam & Tsang) to settle all of these Lehman's orders using Govt money and there is a possiblity that the government may or may not be able to get any money back...
ReplyDeleteThis afternoon, small brokers did buy back the shares they bought from Lehman that cannot settle on T+2.
ReplyDelete