When will they close the markets?

[InsvestoBoy]

Forget "how far will the market fall".

It might be time to start thinking about "when will they close the markets", because I am starting to think the probability of this is rising rapidly.

They shuttered the Manila exchange yesterday. I just saw in the news that Macron is suspending all bills/rent and I know they suspended mortgage payments in Italy.

You think if the bank and utility company can't get their cut of your mortgage or electricity bill, you think your dividend portfolio is going to pay out like clockwork?

If you don't have enough liquidity outside your portfolio, or locked in an account which is tied to your portfolio, now is the time to start thinking about what might happen in the event they shutter the ASX.

If you might need that money, or even need the dividend streams, have a think about what is happening.

 

[InsvestoBoy]

Also, if your whole portfolio or strategy is wrapped up in the idea that you will be able to exit at a future price, think about what might happen if the exchange is closed while you have positions open that you need to exit.

 

[So_Cynical]

It's certainly possible, i was thinking that the govt will have to make free money available to business to stop them from failing, use the banks to admin it for free or deferred payment, business would get access to funds if they didn't sack anyone and kept on casuals at reduced hours, a wage freeze, mortgage and rent freeze, rent subsidies perhaps...everything is on the table

If/when unemployment explodes, RE will have to reverse.

 

[Garpal Gumnut]

One should always have some alternate assets should one enter the share market.

It is possible to lose it all.

Fear and greed.

gg

 

[jbocker]

Also, if your whole portfolio or strategy is wrapped up in the idea that you will be able to exit at a future price, think about what might happen if the exchange is closed while you have positions open that you need to exit.

Are you saying orders cannot be cancelled when a market is closed? Is it different to cancelling 'out of hours'? (sorry these are legit dumb questions)

 

[InsvestoBoy]

Are you saying orders cannot be cancelled when a market is closed? Is it different to cancelling 'out of hours'? (sorry these are legit dumb questions)

No I mean, let's say you are holding a position in a system with the system defining your exit as 20 days after entry, or 20% below the current price...the market might not be open to exit. The assumptions for your system about being able to exit will be broken.

 

[So_Cynical]

They can purge all orders - Right?

 

[UMike]

They can purge all orders - Right?

They would purge all oders.

Forget the Government giving "Free" money to businesses. Won't happen.

 

[mcgrath111]

Government doesn't know wtf to do....I don't think anyone has the answer. Markets don't look super cheap yet either. (Cheaper, not cheap, like BHP @ 28 or WOW at 39? - Someone explain this to me...I get that they won't shut down, yet does panic buying result in people buying more in total? If sales are up now, won't they drop in a few months time when this blows over?
Unemployment will explode, small businesses will default - economy's F'd; but it's only money!

And stay off wall street bets!

 

[kid hustlr]

Really good thread - one should be very careful in present times having:

- a huge portion of their wealth in listed shares
- a trading system which holds overnight positions which they expected to exit in the short term (short term being defined however you want)

I think they should shut the overnight futures I don't think that's helping the situation at present.
I also wonder if this why we keep rallying on a friday afternoon as people square up (after having a short bias all week)

 

[So_Cynical]

Forget the Government giving "Free" money to businesses. Won't happen.

They pretty much will have to, short term free, deferred interest and payment, otherwise every marginal business will close and that would mean thousands of bankruptcies, unemployment will skyrocket.

 

[Purple XS2]

I'd like to hear from the high priest of the free market, Senator Mathias Cormann. Surely he'd defend the right, integrity, beauty and truth of the market to exist without the Marxist, nanny-state, communistic socialist, anarchistic bureaucrats telling the market when they can and can't function?

Or has the good Senator joined the Dark Side...?

 

[hja]

Government doesn't know wtf to do....I don't think anyone has the answer. Markets don't look super cheap yet either. (Cheaper, not cheap, like BHP @ 28 or WOW at 39? - Someone explain this to me...I get that they won't shut down, yet does panic buying result in people buying more in total? If sales are up now, won't they drop in a few months time when this blows over?
Unemployment will explode, small businesses will default - economy's F'd; but it's only money!

And stay off wall street bets!

Oh no I'm sorry, the answer is Moops

 

[sptrawler]

They pretty much will have to, short term free, deferred interest and payment, otherwise every marginal business will close and that would mean thousands of bankruptcies, unemployment will skyrocket.

That is the key IMO, Keating had the recession we had to have, this is another opportunity to deflate the bubble without being the one holding the 'pin'.
Just a thought.

 

[banco]

How does closing the markets help though? Only way I can see it would help is in the case of companies that have some kind of bank covenants that get triggered if their share price falls below a certain level.

Otherwise if you are insolvent the fact that your shares aren't trading isn't going to save you.

 

[CBerg]

How does closing the markets help though? Only way I can see it would help is in the case of companies that have some kind of bank covenants that get triggered if their share price falls below a certain level.

Otherwise if you are insolvent the fact that your shares aren't trading isn't going to save you.

It might not help individual companies but it might calm people down to not see stocks down 10% one day, up 5% the next, down 7% the next etc etc. Not saying I particularly like the idea given I hold a broker who would lose out in this situation but I can see some people might look at that situation and think you know what, one less distraction.

 

[InsvestoBoy]

How does closing the markets help though? Only way I can see it would help is in the case of companies that have some kind of bank covenants that get triggered if their share price falls below a certain level.

Otherwise if you are insolvent the fact that your shares aren't trading isn't going to save you.

Who said anything about helping?

Did banning shorts help in 2008?

Did the last however many bps of rate cuts and repo help?

 

[frugal.rock]

Wow, they closed the market already...

Apparently they close at 4pm every trading day...

The media throw's enough spin without us adding to it here.
People do read this, and then twist it or only take what they want to hear.

This thread is akin to the vultures buying anything and everything...
except a mask.

More scare mongering on our own turf.

China has it contained, need to wear masks they say.
Here? We have the "it's totally unfashionable" to wear a mask.
Wasn't Dutton the one that said we don't need masks? then caught the virus from who knows where...

F.Rock

 

[InsvestoBoy]

How is it scaremongering when one global exchange has already been closed and there are CNBC anchors on twitter begging for it?

I'm not advocating for it, I'm just suggesting people think about it from a risk perspective.

 

[Smurf1976]

How is it scaremongering when one global exchange has already been closed and there are CNBC anchors on twitter begging for it?

It's not scaremongering, just contemplating something that is plausible but uncertain.

Probably every second discussion on this forum relates to that basic concept. Things which are plausible, they may happen, but it's not certain that they will.

A practical example of where it would matter is holding anything the price of which is influenced by overseas markets but with the actual trade performed on the ASX. For example someone buys an S&P500 index ETF or buys a US market bear fund that trades on the ASX. They then watch the US markets using a daily closing price to make decisions but when they want to exit cannot do so because the ASX is shut for a week. They are now stuck holding the position which, because the US market reverses, turns from a profit to loss.

For that matter the ASX could itself experience an extremely move upon opening if it happened to be closed for a week and circumstances change materially during that time.

How likely? No idea but the chance wouldn't be zero. It's a risk to be aware of.