Wednesday, September 17, 2008

Settlement issues at the HKEx?

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.



  1. 柏文兄,你指政府入市干預?

  2. 唔明喎,乜野係 settlement issue 呀?

  3. I guess it should be related to how to arrange Lehman sells their security and stocks on market orderly for cash.

  4. 柏文兄,系咪有人沒錢買單!

  5. Or what about hedge funds who can't settle trade as securites are stuck in Lehman's prime brokerage accounts?

  6. 任何睹例都由d官厘定,

  7. The other exchange has the same issue. What do they do? For example Lehmen in Jpn...

    I think pakman is talking about the T+2 arrangement....

  8. 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...

  9. Here is the FORMULA & We are just started !! Mr. Sinclair, Master of Gold...Ref, I learn alot from him in regards to Gold & Silver and it is very very important that you read and follows..I learn from him since 2004...

    1. The quoted amount of OTC derivatives on Lehman's books are not notional value, but some silly mark to no market. The real number is trillions. When either party to an OTC derivative fails the value of that derivative instantaneously become the size of what was previously called notional value. With one quadrillion, one thousand one hundred and forty four trillion (BIS) in notional value, there is NO means to stop this financial cataclysm.
    2. The shit has hit the fan because trillions of dollars of OTC derivatives failed Monday.
    3. The entity to fail is not the winner on those fraudulent pieces of paper but the loser. Otherwise it would not have failed.
    4. Many other counter parties to those derivatives have fallen into potential bankruptcy.
    5. The long spoken about "domino effect" is active and I now believe the Fed did not consider how a derivative becomes full value (formerly called notional value) when one side goes into bankruptcy. Yes, Pandora's Box opened Monday morning.
    6. For years I was laughed out when this present condition was clearly described.
    7. Gold is going to $1200 and $1650. Laugh at me again if you must.
    8. Those that demand a date already have one - on or before January 14th, 2011.
    9. This is it and it is now.
    10. The greatest damage done to gold shares and gold came directly from those that were over-margined. Yes shorts got it down but those on margin got them here. Shame on you who demanded margin!
    11. Continue to ignore all the means of protecting yourself and you do not deserve to be protected.
    12. If you fail to retain proper parties such as an attorney to read your custodian agreement you do not deserve to be protected. Cheap out NOW and you crap out later, and that won’t be much later…

  10. This afternoon, small brokers did buy back the shares they bought from Lehman that cannot settle on T+2.