WHY is the stock market behaving like a casino?

I suppose the better question would be why are the regulators allowing the market to be like a casino? Are they salivating at the prospect of super revenue and profit from the huge daily volume or are they just at a loss for what

to do?

What about investor protection, market governance, blatant manipulation, frivolous announcement just to move share price, etc?

Aren’t regulators supposed to focus on these important areas?

Being an ex-regulator with more than 20 years in the field, I have dealt with all sorts of market scenarios.

Looking at the current one, I feel it will likely end in tears for most of the inexperienced investors.

Regulators must act fast and decisively to nip these unhealthy activities in the bud by using stronger market management tools before more innocent investors get drawn into the frenzy. Otherwise, they will be blamed again for not doing anything.

Anyone looking at the volume traded these days will know it is mainly due to two reasons - excessive gambling/speculation and/or manipulation. And this is not a good reflection.

It reminds me of the property buying frenzy a few years ago when buyers were snapping up units by the floor or block, thinking that the good times would last forever. Most are now stuck with empty and negative equity units.

The same scenario is now happening in the stock market.

Admittedly, there are companies that will benefit massively from the current pandemic, and their share prices have gone up accordingly. There’s no need to issue the unusual market action query for them.

However, for the majority of the counters, there is no reason for their share price to rise, let alone have hundreds of millions of shares traded every day.

Investors need to be very aware that most of the volumes traded are not due to genuine investing but are in fact fake volumes churned up by certain parties hoping to make a quick buck.

These parties are known by various names such as proprietary traders, day traders, programme traders, high frequency traders, syndicates, punters, etc. Their main job every day is to create volume in the market, hoping to lure unsuspecting investors and profit from them.

With the real economy in bad shape, many new and inexperienced investors are attracted to the stock market rage, hoping to make some money. Little do they realise that they are swimming among sharks - and they are counting on the regulators to watch their back.

Regulators, please do something, say something, before it all collapses like a house of cards (in this case, scrips).

STRICTLY FAIR AND ORDERLY , Kajang

https://www.thestar.com.my/opinion/letters/2020/08/07/caution-for-novice-investors