Is it in FI's interest to add value to the Lower End of the Market?



  • Saw some tweets about divs payout in the last few days and it got me thinking. Is it better for FI to have money concentrated in the top end of the market, or spread more evenly? Would it be to their advantage to bring prices closer towards the middle?

    The tweet below highlights the disparity. On 15/06, £21.1k paid on Rashford vs £348 on Mandi!

    In FI's risk assessment they will somewhere have a worse case scenario for their balance sheet. Sancho sweeps up on all Gold Day Star Mans with Media and IPDS. Won't happen, but this is a possibility. The point being that FI will presumably have to calculate risk that they could pay out £100k (?) + in divs in a single day, or £1k if it works in 'their favour'

    We all know how predictable how MB is, so presumably this is the most costly to FI over the long run? I appreciate they have the capital to pay these divs through issuing shares, but unlikely this is just a huge pot of money sitting in a bank.

    So, would it not be in their interest to spread money more evenly across the market and boost the lower end, so there is less variation in payouts? You'll always have variations of course in a market, but the price variations do sometimes feel extreme, especially with PB days, where winners can (and do) come from anywhere.

    As a side question, to what extent is MB pushing the top end prices up? We're set to see a long run of match days, so it will be interesting to follow this. If you hold players mostly for MB, are you concerned at all about the impact of any changes?

    Finally, worth mentioning IndexTrak, which i came across today. Not an affiliate or anything, just mentioning due to the tweets like the one below which are useful to understand costs for FI, and IndexTrak's free portfolio management tool which I've started using.

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    https://twitter.com/FIMarketCap



  • I think it is absolutely in their interest to spread value around the market. They want people trading. If the div winners are too predictable then everyone buys exactly the same players and sits on them for 3 years. That is not in FI interest. It is clearly not in their interest as you can see from their actions. IPD's, super dooper scooper points - all designed to keep people churning over shares and driving commission.

    I'd like to see them extend IPD's to 3 months eligibility. Suits their agenda, suits ours



  • @Baydog Agree. The official reason for IPDs though was for new customers if i remember correctly? Making it easy to win some dividends in your first month, and acknowledging that Match Day Dividends were too difficult to predict.

    Super Match Day Points may be an alternative? Less complicated though obviously.



  • Fine balance, last october MB and the top end were dead and IPD ruled, there was uproar that PB needed to be increased and people were leaving, port drops all over the place.
    What do FI do knowing that if they just topped up ipd’s the same scenario wouldn’t arise again....
    I feel ipd’s do need increasing to keep the balance but at the same time I know the top end needs satisfying.

    MB is obvs going through a good time as we have had double divs and a sort of mini transfer window with sancho cleaning up, this wont last though as football and match days will be back with a vengeance and players winning man of the match and scoring winners will be MB kings.

    The normal FI cycle has been ripped to pieces it’s an interesting time ahead for sure.



  • @Metropolis said in Is it in FI's interest to add value to the Lower End of the Market?:

    @Baydog Agree. The official reason for IPDs though was for new customers if i remember correctly? Making it easy to win some dividends in your first month, and acknowledging that Match Day Dividends were too difficult to predict.

    Super Match Day Points may be an alternative? Less complicated though obviously.

    The official line was to give new people div opportunities, and it does.. It helps drive match day buys, keeps the ticker busy. I think they timed it with the share split to disrupt the market a bit. There was stagnation at the top and because there was a lot of value in the bottom end post split due to ipds (amongst other things.) I suspect the IPDs were to encourage people who had amassed big holdings in top players to sell some and buy cheap tat 😂 It probably worked.

    At the time I was heavily sceptical of MB. It is a mess. Too easy to manipulate and too open to question. I have never bought into MB, I don't even look at the rankings. For me PB is clean. I always played PB because it is not really open to question. From an FI perspective, PB really has to be the focus of the dividends to keep integrity. I think the focus of divs will always remain on PB, and matrix tweaks will ensure they can move value around a bit in that sense too.

    Outside of this, I think they will continue to experiment with ways to make the whole market appealing. I think the bonus points thing was a good idea in principle. It seemed they completely rushed it out and it was a half conceived concept (it coincided with a downturn or something.) IPD being eligible for longer will ensure that there are multiple opportunities to move shares on in the IPD cycle. If it is only one month eligibility then everyone is going to be trying to use the same exit points, and without IS that is more of an issue than ever



  • 0_1592438820632_upload-4af8ef91-af6f-4b0d-845e-17a687ee3387

    @Metropolis I was incidentally studying this fascinating Twitter site in the early hours yesterday morning. Traders were wondering why there wasn't a boom in trading this week with the PL back, and it's because £1m went out the Index this week.

    0_1592439282700_upload-eeb5ac26-7101-4366-80af-cb8412e29e71

    Compare that to after football was postponed where £2m left the platform and FI acted quickly to steady the stampede. ME has enabled traders to take money out of the platform quicker. One thing that was highlighted was the low amount of money that is in GKs. DEFs have £15m held in them with MFs and Fs more that £50m. GKs have only £500k invested in them. Surely this is a massive growth area for FI to give them their own category?

    0_1592440213511_upload-a0ae2db2-f2bc-45b5-89ed-344e81ca7b0c



  • @Londoner @Metropolis. So something that jumped out at me from the data (thanks for sharing) was that over the last 7 days about £240k of dividends were paid by FI. If we're to assume FI are covering this by 2% commission on sales and purchases via ME, and or, incoming order books they would need a trading volume in those areas of approx £12m in a similar 7 day period.

    One I am assuming I'm missing a piece of the puzzle on the above and be greatful If someone could enlighten me. Two, it's absolutely in FI's interest to stimulate sales and purchases in all players on the index to maximise commissions paid via a high trading volume.



  • I don’t get why they changed IS. More people doing an IS gives them more commission. I’ve got quite a few crap players who I would have used IS on normally but now with the huge spread or no spread I’m just going to hold in the hope they come good so FI get no commission.



  • @Londoner yeah i think this highlights the fact that there were a lot of people wanting their money out during the lockdown and suspension of IS and these people will likely still need that money out or are maybe now a little more aware that they shouldn’t over stretch themselves in here.

    I dont expect to see any big growth on the index until next season now when Sell orders are added, MB has been reviewed and the Dividend table has been released. We might even have Nasdaq up and running by then but at the moment i think theres just too much change going on at a time were we are also seeing a market correction from 3 months of money being locked in.



  • @Baydog said in Is it in FI's interest to add value to the Lower End of the Market?:

    I think it is absolutely in their interest to spread value around the market. They want people trading. If the div winners are too predictable then everyone buys exactly the same players and sits on them for 3 years. That is not in FI interest. It is clearly not in their interest as you can see from their actions. IPD's, super dooper scooper points - all designed to keep people churning over shares and driving commission.

    I'd like to see them extend IPD's to 3 months eligibility. Suits their agenda, suits ours

    Not everyone will buy them, a loud portion of twitter will refuse/can't pay the top prices so will moan all year to have the rules changed so they can buy the next stars cheaper...



  • It's starting to feel a lot more like a real stock market now with lots of money coming out of both at the minute. The reason the actual stock market is staying afloat at the minute is because the federal reserve is printing money and buying into the stock market propping it up while lots of investors are taking money out.



  • @Londoner Money can’t actually leave the market as all sold shares need a buyer now.
    Indextrak just judges market cap by player prices. So if the “cap” is down a million it just means there’s been £1,000,000 worth of listings that haven’t been matched.



  • @DW In theory dividends are covered when they initially sell the share into circulation. So when the sell Sancho for £14 he needs to win £14 worth of dividends before it costs FI any more. By which time the shares have probably been regurgitated many times at an additional 2% each time.



  • @Londoner valid point about GKs. The only issue here being that they aren't especially exciting to follow on match days. They would certainly appeal more to the serious football stats type/ fantasy football enthusiast rather than punters!

    On the note of money being withdrawn, I think the £2m pre lockdown was likely withdrawn because there was still the IS option available, but the £1m now is just listing, so money still theoretically in the market.

    This is where FI saved us all by removing it. I just hope it's temporary and long term they will still provide it.



  • @Londoner glad you brought up goalkeepers, I think if FI announced that they were going to bring in a GK only category for PB (even if only 1p for the win) then it would encourage a fair bit of trading! That's my weekly mention of that done.



  • @Timothee-Atouba True, but taking into consideration the long term financial viability of FI, its unlikely they just bank this cash and payout as and when it's needed.

    Forecasting div payouts must be a huge headache for them. They did well yesterday and saved £20k (?) by Luiz winning MB rather than Rashford.

    I'll add IndexTrak details from today once it's posted on Twitter. Interested to see the payouts.

    I don't think FI have ever been asked what they do with the money we deposit but it would be interesting to know. Assume its invested elsewhere in stocks etc, but with easy access for future payouts?



  • Timothee is of course right that the market can no longer shrink and there’s only an upside now as it’s other people that buy and not FI. They only need to pay out dividends and promotions now to us if they choose. FI have made a brilliant move in my view by protecting themselves and our portfolios during Covid. If I had the same money in the FTSE 100 over the past few months then I would have lost over 10K. Instead I’ve made nearly 5K so I’m very happy with the action taken by FI thus far.



  • a problem with a GK category being added would be the crash it would cause elsewhere- Why hold the top forwards at £8~£14 when you coul hold the top GKs for 60~80p, a lot more dividends for your bucks. I think they have left it too late...unless they find a way to introduce them for only absolutely fresh money coming into the index- no selling other holds for a long period.



  • @Metropolis It would be very interesting to know what they have invested the cash reserves in. I really hope it wasn't stocks!



  • @Ben_pz hopefully not hertz


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