Day: June 23, 2021

The interest in day trading among retail investors has been on the rise. Drawn in by easy-to-use, commission-free trading platforms, millions of young and inexperienced investors began piling into financial markets.

In January alone, rolling net inflows from retail traders in public equity markets was over 10x that of the same period last year, according to VandaTrack. Not only that, trading volumes in derivatives, which tend to be riskier than stocks, had also jumped in the past 18 to 24 months as it became easier for retail traders to trade such complex instruments.

Early last year, when the pandemic brought economies to a standstill, major stock market indices around the world experienced their sharpest falls since the 2008 financial crisis.

As confidence in the markets recovered, the S&P and Nasdaq returned a staggering 80 per cent and 100 per cent respectively from their March 2020 lows. The strength of this recovery was felt most strongly in several distinct areas of equity markets, such as in technology, e-commerce, and work-from-home related stocks.

Suddenly, equities have become a somewhat predictable source of investment returns, and news of this source of ‘easy money’ began flooding chat rooms and social media popular among young retail traders, with many sharing strategies and coordinating buying sprees into some of the most crowded individual trades on the market.

Also Read: Thai startup StockRadars raises round to democratise stock trading

All hell broke loose when a week of frenzied options trading activity led to a rapid short squeeze which sent share prices of underperforming companies like GameStop, BlackBerry, and AMC skyrocketing. Several institutional fund managers which had succumbed to massive losses from betting against these companies in a spectacular fashion were forced to seek bailouts from other funds.

At first, early gains won during the initial surprise attack on Wall Street led many retail investors to rejoice in a “successful” ‘retail rebellion’. But soon, the establishment quickly reasserted its influence over markets and retail trading platforms were forced to halt buying on their apps.

Such limitations quickly curtailed momentum and sent prices down in a spiral. Many retail investors who bought in at massively elevated prices during the short squeeze were forced to ride the share prices back to baseline, suffering heavy losses.

The debacle, dubbed ‘GameStop Saga’ by many, brought into focus the debate for and against commoditising stocks and derivatives trading. In many aspects, a surge in retail enthusiasm for the stock market is a good thing.

For one, long-term investments in the stock market have tended to be a wealth generator, not just for institutions but also for the average middle class investor. Not only that, the success of Corporate America has also been a prime example of how deep and liquid equity capital markets have helped companies build new businesses, spend on research and development, hire workers, and drive a country’s economy.

There are, however, obvious downsides. As Mohamed El-Erian of the Financial Times pointed out, retail investors represent a ‘leaderless and fragmented group that often lacks staying power’. Institutional investors can and will capitalise on the structural disadvantages inherent to retail investors’ strategy.

Such disadvantages are especially prevalent in markets of penny stocks, derivatives, and certain illiquid, less transparent assets, where information and staying power asymmetry represent significant arbitrage opportunities in favour of larger institutions.

Already, regulators are beginning to take notice. However, they face difficulty in balancing competing issues.

Retail trading now accounts for 15-20 per cent of trading volumes on an average day and has given rise to unusual market dynamics that add to market volatility and systemic risk.

Also Read: App trading — Bridging app markets across Asia

On the other hand, lawmakers, including the likes of Rep. Alexandria Ocasio-Cortez are questioning if Wall Street is to be granted exclusive rights to a market misdemeanour.

In many ways, the rise of retail trading as a force to be reckoned in financial markets was akin to a political uprising that demands inclusion and participation. The democratisation of trading has made it easier than ever for the young and average to join in the game, for better or worse.

Regardless, there may be the place for some friction in the form of tighter checks and balances at both ends of the investor spectrum.

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Many of us do entrepreneurship as though it’s merely a series of challenges that either need to be faced or swept under the rug! Even when we feel like we’re addressing them, we often worry about them much more than necessary.

Problems appear to persist because we go looking for them, even when they are not right in front of us. We filter our experiences based on the belief that we have a particular problem, and we unconsciously censor anything that doesn’t support this belief, including the fact that the problem is not actually right here in front of our face.

You might have seen this happen with someone you know. This person talks about their problem often but every time you see them, there is no indication the problem is even there. They are only telling you about it, not experiencing it directly.

On the few occasions when the problem actually does occur, they say things like “I always make a mess of things,” Or, “I never know what to do.”

Ironically, when we use words like “I never” or “I always,” we tend to grossly exaggerate the frequency of something occurring because of our emotional attachment. By doing so, we simply reinforce our problems which cause us to suffer.

Now, what if all our problems are just memories?

Most of us believe that thinking about our problems and wanting to change them will bring change, so we keep on doing it. But if you examine your own experience, I think you’ll find that positive change most often comes when you let go of all your thinking and wanting.

Also Read: Pharma entrepreneur Thomas Miklavec shares his journey on expanding his startup across SEA

The personality trait “grit” denotes the disposition to pursue long-term goals with sustained effort, zeal, and interest over time, or in short: effortful persistence.

Grittier individuals work more strenuously to achieve their long-term goals; they persist in the face of setbacks or plateaus in progress, and they maintain their focus on these goals without being easily distracted by other, more short-term, or less important goals.

For this reason, people with high grit are more successful in achieving their goals and in attaining excellence in competitive environments.

The problem arises when we need to pivot our startup strategy. Are we agile enough to let go of our “grit” and change direction, as and when the twists and turns of entrepreneurship call for it?

Letting go is not a mere decision, failure or defeat. It is not submission or punishment, neither is it resignation or the decision to be comfortable with our status quo, or forgetfulness.  Nor is it an ending or a bad thing, nor a state we can will ourselves into.

Rather,

• Yielding and letting go is a high-level capacity in psychological development.
• We could say that letting go is an emptying of oneself, toward a state of inner non-acquisition. We could say that letting go is not a strategy; it is the profound absence of strategies. We could say that it is waking up to realise that all strategies are ineffective– we don’t know how to do it and we don’t know the way. More effort, more doing or more planning might be counter-productive.
• When we truly let go, we don’t know if what’s to come will be better or worse. We accept that we cannot think or see our way through where we are.
• When we let go, we give up trying to control the situation. We all want predictability and control, even though they are impossible to attain. Without them, we experience fear. By letting go, we give up the illusion of control.
• Inevitably, we are sometimes cheated or disappointed by business partners or stakeholders, which stirs negative emotions in us.  We have to find ways to let go. Nelson Mandela said that “Not forgiving someone is like drinking poison and expecting the other person to die.” Letting go offers a neural path for forgiveness and thereby a remission from the suffering of holding on.
• In letting go, there is clarity. When our efforts are no longer aimed at controlling the future or producing a certain result, we can experience the present moment directly, in a new and fresh way. We accept that the present is the only thing we have any real say about; we might as well pay attention to it. At this point, we enter into a new level of awareness and capacity.

The “how” of letting go is so counter to ego consciousness that it has to be directly taught, and it can only be taught by those who are familiar with the obstacles and have experienced surrender as the path to overcoming them.

The entrepreneurial journey is not subject to a mere passing on of objective information. It must be practised and learned, just like playing the guitar or mastering taekwondo.

Also Read: 5 lessons from 5 years as a millennial entrepreneur

Making the transition from job to entrepreneurship is an exercise in letting go. Traditional career and life paths are beginning to disappear for younger generations.

People are less able to plan, and by default, must live more in the present. They must learn to be more flexible to change and more open to opportunity.

• Job is defined as an activity or task performed by an individual for earning salary or wages. Entrepreneurship is a calling that is carried on by a person for his entire life.
• Job is a trip, but entrepreneurship is a journey.
• In a job, you invest your time to earn money, but in entrepreneurship, you invest your time to pursue your lifelong ambition or dreams.
• Job is held for a short term while entrepreneurship is an individual’s long-term goal.
• Job requires education and skills. Entrepreneurship involves lifelong learning or continuous deepening and broadening of specialisation.
• Job is when you work for a finite time for regular and secure income. Entrepreneurship is about innovation and boundary-less learning. Sometimes you don’t know whether it is morning or afternoon or night— you sleep late at night and wake up early just to learn and explore more.
• When seeking a job, you brand yourself as a commodity. But in pursuing entrepreneurship, you are your own brand.
• Job is a means to fulfil the needs of life ie. efficiency, but entrepreneurship is an end in itself — what a person endeavours until he retires ie. human worth.

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Editor’s note: e27 aims to foster thought leadership by publishing contributions from the community. This season we are seeking op-eds, analysis and articles on food tech and sustainability. Share your opinion and earn a byline by submitting a post.

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Meet the 3 SEA startups attending MedTech Innovator’s programme

The story: MedTech Innovator, an accelerator of medical device companies, in partnership with Asia Pacific Medical Technology Association (APACMed), today announced the 20 companies selected to participate in its Asia Pacific Accelerator programme.

Who are they?:

Active Needle – Abingdon, UK
Adiuvo Diagnostics – Chennai, India
Biorithm – Singapore
BrainSightAI – Bangalore, India
Huinno – Seoul, South Korea
MedCorp Technologies – Hawthorn, Australia
Miraqules – Bhubaneswar, India
Navi Medical Technologies – Melbourne, Australia
Nayam Innovations – Mumbai, India
Nitium Technology – Selangor, Malaysia
Oncophenomics – Hyderabad, India
Opharmic Technology – Hong Kong
PB & B – Lausanne, Switzerland
PLIMES – Tsukuba, Japan
Pluss Advanced Technologies – Gurugram, India
Sonic Incytes Medical – Vancouver, Canada
SpineGuide Technologies – Shoreview, Minn. US
UpperMed – Singapore
VPIX Medical – Daejeon, South Korea
ZuoYuan Medical – Hangzhou, China

Each of the chosen companies will receive high-profile visibility to healthcare investors, stakeholders and decision-makers, as well as customised mentorship through one-on-one matching with corporate partners to help with commercialisation throughout Asia Pacific.

New incubation programme for SEA’s plastic waste startups launched

The story: Entrepreneurial support organisations across South and Southeast Asia are rolling out PXCC (Plastics X Circularity Curriculum), a programme in the region designed to fast-track startups that apply a circular economy approach to plastic waste management.

Also Read: The art of letting go and how it makes you an even better entrepreneur

Developed by The Incubation Network, The Circulate Initiative, and Sagana, it is the first-ever curriculum on circular plastic waste management for pre-seed and seed-stage startups in South and Southeast Asia.

15 entrepreneurial support organisations across South and Southeast Asia have committed to pilot PXCC, exploring opportunities to roll it out in their programs.

To support the implementation of PXCC, organisations will receive tools such as a fundraising guide, sample pitch deck, and lesson plans, to turn learning into action.

There are 31 sub-modules across  nine learning domains that can be delivered with mentorship and cross-learning from industry experts within The Incubation Network, as bite-sized on-demand learning, or in personalised lessons where entrepreneurs can focus on topics that align with their solutions.

The curriculum content and supporting materials were developed with input from entrepreneurial support organizations SocialAlpha and StartUpX, and have already been piloted by five entrepreneurs under the guidance of The Incubation Network.

Golden Gate Ventures makes Angela Toy a partner for portfolio growth

The story: Golden Gate Ventures, a venture capital fund in Southeast Asia founded by Silicon Valley natives, has announced the appointment of Angela Toy as Partner for Portfolio Growth.

The new role: In the new role, Toy will focus on Golden Gate’s platform strategy, working closely with its portfolio companies to sharpen their growth strategy, especially in the areas of talent, business development and fund-raising – three critical areas that will help entrepreneurs scale quickly and maintain their growth.

Who is Toy?: At Golden Gate, Toy started as employee number two and has been instrumental in guiding portfolio companies and the firm’s global network to help founders get the right mix of support and helping founders eliminate roadblocks in their growth path. She now builds on this track record to develop the Golden Gate Ventures’ Portfolio Growth strategy powered by a decade’s worth of data and insights from the firm.

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Image Credit: PXCC

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Justika, an Indonesia-based legal services marketplace, announced today that it has secured an undisclosed sum in seed funding round led by East Ventures, with participation from early-stage VC firm Skystar Capital.

The company intends to use the money for product development, marketing, and hiring, as well as to expand its public access platform to legal services in Indonesia.

According to the research report on Access to Justice in Indonesia, 71 per cent of Indonesians who face legal issues back out from fighting the case due to a lack of knowledge of accessing information.

Founded in 2016, Justika aims to solve this by connecting people who need legal services to lawyers and other supporting services, such as company formation agents and translators.

The way it works is that it matches clients to curated lawyers based on specialties. Once matched, clients can consult with the relevant lawyer and receive replies within a few minutes.

Depending on the necessities, lawyers can offer subsequent services, such as document review, drafting, phone consultation, aided negotiation, and court advocacy.

Also Read: Meet the 2 SEA startups joining Allens’s legaltech accelerator

Currently, it focuses on three legal areas that most people often encounter in their daily lives: family law, laws involving small and medium enterprises, and property law.

“The key is to educate the public in order to democratise access to lawyers and resolve legal issues. Justika seeks to alleviate this problem, by allowing people to get immediate and affordable legal service. Our tech innovation allows clients and lawyers to utilise technology to access legal services in a novel way and also streamlining the way lawyers work by, for example, providing document templates and inheritance calculator for Muslim clients,” Melvin Sumapung, co-founder of Justika, said.

“Low access to legal justice is a pivotal concern in Indonesia. It happens due to the complicated procedures that people have to face and the lack of information on legal access. Justika has built a platform that gathers lawyers and clients, benefiting them with various useful features. We believe that Justika will democratize legal access and help millions of Indonesian people to understand rule of law easier,” added Willson Cuaca, co-founder of East Ventures.

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Image Credit: Justika

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Almost seven months after raising US$100 million in debt facility from the alternative investmentVictory Park Capital Advisors, Indonesian digital credit platform for retail borrowers Kredivo has raised additional US$100 million from the US-based firm.

The capital will be used to fund consumer loans for Kredivo’s borrowers in Indonesia.

“The large capital pool made available via this facility increase will enable the business to scale further in 2021 and beyond and get us closer to our goal of serving up to 10 million customers in Indonesia over the next few years,” said Kredivo CEO Umang Rustagi.

Also Read: Kredivo bags US$100M from US investor to provide instant credit financing to 10M new users in Indonesia

As per a press release, it marks one of the largest asset-backed securities transactions for unsecured lending in Indonesia.

Founded in 2016 and operated by Singapore-based FinAccel, Kredivo Indonesia is a digital credit card payment platform of FinAccel that offers various payment methods to help customers to break large payments into affordable and safer payments.

It provides an option for its users to buy now pay later while doing online shopping.

Its parent FinAccel is backed by Mirae Asset, Naver, Square Peg Capital, MDI Ventures, Jungle Ventures, as well as several other investors.

Given that credit card penetration remains at three per cent in Indonesia due to limitations of conventional financial institutions in distributing unsecured credit, Kredivo claims its services are able to bridge the credit gap within the archipelago.

“The company presents a unique combination of growth, scale, risk management, and financial inclusion in one of the most exciting emerging markets in the world,” Gordon Watson, partner at VPC, said.

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Image Credit: Kredivo

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