JSE doesn’t protect long-term investors
THE JSE’S MANAGEMENT shows a lack of leadership when it comes to protecting long-term investors. Since the JSE generates its income from each trade, the more volatile the market, the greater their income. That creates a conflict of interest.
Short sellers contribute to the fall of the market. There’s a fundamental difference in motivation between shareholders who sell and short sellers. The latter want to push the share price down: the more panic selling they can cause, the better. The additional selling makes it more likely that holders of derivative products, such as CFDs, are forced to close out their positions. They’re forced to sell into a market with few buyers.
The primary role of a stock market is to obtain long-term capital and it shouldn’t be dominated by short-term speculators.