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Online Share Trading

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International Effects on JSE

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Antenna14
Contributor
Hi There If a Company is performing well on another stock exchange, for example the ASX, what are the chances that Comapny would be affected in the same way on the JSE? Thanks
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7 REPLIES 7
suki
Super Contributor
An arbitrage opportunity may appear when given technical, geographical, legal or administrative barriers interfere with the correct interaction between two markets trading the same security, thus preventing the security from having the same price on both markets. In a perfect world, there would be no arbitrage opportunities, and in the real world most arbitrage opportunities tend to disappear quickly, unless there are high transaction costs that hamper frequent arbitrages. Over time, inevitably, other arbitrageurs will get organized to take advantage of arbitrage opportunities, narrowing down the price difference until it disappears.The current trend in the hedge fund business is that the massive money flow towards arbitrage strategies makes it more and more difficult for managers to generate interesting returns.*Most of the low-hanging fruits have already been picked!* By: Investment Strategies of Hedge Funds: Filippo Stefanini
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orange68
Super Contributor
why not trade that share itself or a cfd on the share with an international broker? costs are everywhere but if its a doing well costs will be recovered and profits will pour in. keeps things simple
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suki
Super Contributor
check Glencor for JSE, Hong Kong and London to get a better picture.
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IAM
Contributor
Slightly off topic, but if you buy a share on the JSE, is that share good on another exchange? Or can you only sell it on the JSE?
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SimonPB
Valued Contributor
mostly you can sell on the other exchange but the money has to return to SA in Rands and it a monster process. ADRs etc. you cannot, they have to be fungible
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suki
Super Contributor
the book i mentioned above explains how this works?
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Antenna14
Contributor
Thanks I will have a look at that. I was looking at CZA that had a 45% Spike yesterday on the ASX and was wondering if that Spike would affect CZA on the Jse, But what you are saying makes sense.
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