by Kris Sayce on November 14, 2008
During the last few months we’ve shamelessly written that we believe the market has bottomed out. But just like the patient who is on life support, it is too early to tell whether it really will improve from here or whether it will have another cardiac arrest.
The only sector of the market we have been cautious on is financials. The banks especially. But now we are tempted to start whistling a different tune.
It’s risky because the Australian banks are not out of the woods yet. In fact some of them are only just starting to admit they have been hiding in the woods. Commonwealth Bank [ASX: CBA] springs to mind.
[click to continue...]
by Kris Sayce on November 12, 2008
Here’s a headline to warm your cockles, “US car giants ‘laugh at Aussie suckers.’” The Australian newspaper tells us that “former managing director of Mitsubishi Australia Graham Spurling said the car companies would get a “free ride” from the Rudd Government on research and development.”
Obviously having a domestic manufacturing industry is important. And it is preferable that it is an Australian business so that investment and profits remain on shore. If that isn’t possible then the next best thing is for foreign businesses to invest in Australia. At least that way it creates jobs for the economy which means employees will spend their wages domestically.
The third option is that the manufacturing is done offshore and delivered to Australian distributors who then mark up the price for a profit so then again at least some of the profits remain on shore.
[click to continue...]
by Kris Sayce on November 7, 2008
We have no idea who Giovanni Spagnolo is. We don’t know whether he is a professional trader, a small investor, a fund manager or anything else.
But what we do know is the Australian Securities & Investment Commission (ASIC) has taken him to court for short selling. To be more precise, for naked short selling. You see, what Mr Spagnolo did was sell shares that he did not own. Furthermore, he didn’t borrow the stock from anyone in order to deliver it on settlement. That is what makes it a naked short sell.
[click to continue...]
by Kris Sayce on September 23, 2008
So it should hardly have come to a surprise that once the UK and US introduced limited bans that the Australian market should follow. D’Aloisio must have been preparing himself to be the hero of the markets once the announcement was made on Friday evening. Acceptance speech prepared, there wouldn’t have been a dry eye in the house.
Then the bubble burst. Reading today’s papers you would think that the mainstream press, commentators and fund managers have been supportive of short selling all along. Almost every article is either critical of the ban or quotes those that are.
It didn’t help that ASIC managed to royally stuff things up. To the extent that the ASX had to delay the market open yesterday while ASIC released a clarification of the new rules.
Bearing in mind who principally does short selling - larger or more sophisticated investors and institutions - banning the practice on the ASX will probably only have minimal effect.
[click to continue...]
