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Market manipulation? #investments

We have seen interest rates manipulation in the recent past and banking products mis-sold. On the forums, there are now accusations of stock market manipulation. There is  a petition asking for regulation of market makers.

market manipulation

Regulation

Is there a need for more regulation and oversight? I would personally like to see a future government buying a controlling interest in the stock market. Private investors could be given direct access and some practices like shorting could be looked at to see if they are detrimental to the economy. The world economy is in a mess and so it needs fixing, we can’t just sit back and let the markets decide. Banking needed regulation, all aspects of business practice need regulation and the markets are no exception.

Solo Oil

In about a week Solo Oil should report its first revenue from gas sales in Tanzania. This is good news. Right? So why is the share price dropping? Why have the market makers increased the spread to 25%? A little good news last year sent the share price soaring tripling in one day. Since then spreads have been all over the place and private investors on the boards complain of manipulation. The ‘ask’ price is 0.25 and the ‘bid’ price is 0.20 at the time of writing. Investors make a 20% paper loss as soon as they buy. Maybe someone is stockpiling before the good news is released?

M & A

With the stock market in disarray, there are bargains to be had for the private investor but we have little control over companies. There are other predators. Nissin paid 65p for shares in Premier Foods  not very long ago. Will the Japanese noodle maker make a bid? Premier Foods shares seem like a bargain at 44.75 today. There was also the recent bid from an American company that was turned down. The directors of the company paid an average of around 80p for their shares when things were looking worse than they are now. If investing was more rational and long-term I could see the share price going back up over a pound easily.

Political risks

Brexit was an event that trashed the market. It’s over and so the market should recover but we have aftershocks and political uncertainty caused by extremism. The political landscape has been reshaped by social media and the middle ground has lost its voice. The pragmatic voices of reason are drowned out by the dogmatic on the right and left of politics. The Liberal Democrats are all but destroyed and the moderates in both the Conservative party and the Labour Party are being drowned out. We might even see a new party emerge. It is not business risks that are worrying, it is a global shift to extremism that is worrying.

Market Manipulation?

If there is market manipulation is it being masked by the turmoil in the market? We need some regulation and guidance. The market at the moment seems to be similar to a riot on the streets, virtually unpredictable. We are still in the European Union, what will happen in 2 years time when we actually leave and what will happen in the meantime as treaties and agreements are renegotiated? The world economy is a mess and before we could even identify the problems, our economic failures were blamed on the EU. We needed to reform agreements not tear them up.

FTSE 250

If share prices drop really low, private investors snap up bargains and predators move in. This appears to be happening with the FTSE 250 and so there are signs of a recovery in some prices. Overall, there is a still a preference for the safety of gold and large pharmaceuticals. When will it all end? I can’t begin to predict how the market will go this afternoon, let alone in the months ahead.

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