by Kris Sayce on November 13, 2008
This morning we were beaten to it by The Age newspaper. Damn the ruthless efficiency and timeliness of the printed press.
“$2 company has new meaning” reads the front page story. It tells us that 48 of the S&P/ASX200 companies are trading for less than $2. We did a similar check on the S&P/ASX100 index yesterday. Fifty-three of those companies are trading for less than $5.
Of course the actual dollar value of the share price is not always significant. The market capitalisation of the company is more relevant. But it’s certainly a far cry from the euphoria of last year. Remember when pundits were jumping up and down with excitement trying to pick which Australian share would be the first to break through the $100 barrier?
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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.
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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.
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by Kris Sayce on September 25, 2008
The ASX held its annual general meeting yesterday. Not for the first time it has been in the spotlight recently. The short selling debacle being one instance.
Aside from this and the fact that it is seeing lower trading volumes and fewer listings, it has its back to the wall over proposed competitors entering the market. Fortunately for the ASX the government has deferred making a decision that would allow three companies to set up rival exchanges - AXE, Liquidnet and Chi-X.
Outgoing chairman of the ASX Maurice Newman claimed that competition to the ASX is “not in the national interest.” When a private company invokes the “national interest” argument you know they are really in trouble. Former AIG CEO Hank Greenberg claimed that company was a “national treasure” prior to the US government’s USD$85 billion loan.
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by Kris Sayce on September 22, 2008
Not surprisingly the ASX/S&P200 looks as though it is going to get off to another strong start this morning.
We dare say you have all had the opportunity to digest plenty of information over the weekend. Newspapers and websites have been screaming about financial Armageddon. Two weeks ago very few people would have heard of Henry “Hank” Paulson. Today he is almost a household name.
A quick summary of what has happened over the last few days in chronological order.
Markets have slumped. The US government has proposed buying up bad debts from US banks. The US, UK, France, Germany, Switzerland, Canada and now Australia have implemented various bans to prevent or limit short-selling. Markets have soared.
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