End-of-June madness needs examination
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Tuesday, 3 July, 2001 - 22:00
IF you thought that 67 point rise in the index during the final few minutes of the trading year was too good to be true, that is because it was. In fact it smelled fishy.
The following morning the market opened flat and closed 50 points in the bag. Woodside was down 57 cents at $15.75 after being up 66 cents in the previous session. The big banks reversed gains of a full dollar. A 4 per cent swing in leading stocks in a matter of minutes has nothing to do with investment and everything to do with manipulation.
Much of the huge $4.5 billion turnover on June 29 was a combination of blatant pressure to force up the futures market and traditional “window dressing”.
This is the practice where some fund managers buy shares that have had a good rise so that their more abysmal stock picking looks a little better to readers of their reports.
They often sell them the next day.
Quite why investors in funds should be the unwilling partners to this dubious exercise is something that trustees should look at some time soon.
The spectacle of big players gambling on a bent roulette wheel breeds cynicism and contempt among small investors.
The ASX and the ASIC says it will examine the end-of-June madhouse. Do not hold your breath for a speedy outcome.
Beware strangers bearing gifts
IF you a receive a call from a Hong Kong broking firm called Berkley Samson – hang up. The regulators have no record of such a firm there. Ditto Singapore and Thailand, despite their glossy brochure. This outfit and others make cold calls to Australian investors offering hot deals alleged in Nasdaq listings.
WA has been targeted by these foreign boiler-room pests. Redgate Wines in Margaret River says it has been bombarded with calls from alleged brokers pedaling dodgy investments.
Redgate chief Bill Ullinger informed one caller that he was dead, and asked to be removed from the data base. Bill has a keen sense of humour. In fact he hasn’t been well lately, and Briefcase wishes him a speedy recovery.
The following morning the market opened flat and closed 50 points in the bag. Woodside was down 57 cents at $15.75 after being up 66 cents in the previous session. The big banks reversed gains of a full dollar. A 4 per cent swing in leading stocks in a matter of minutes has nothing to do with investment and everything to do with manipulation.
Much of the huge $4.5 billion turnover on June 29 was a combination of blatant pressure to force up the futures market and traditional “window dressing”.
This is the practice where some fund managers buy shares that have had a good rise so that their more abysmal stock picking looks a little better to readers of their reports.
They often sell them the next day.
Quite why investors in funds should be the unwilling partners to this dubious exercise is something that trustees should look at some time soon.
The spectacle of big players gambling on a bent roulette wheel breeds cynicism and contempt among small investors.
The ASX and the ASIC says it will examine the end-of-June madhouse. Do not hold your breath for a speedy outcome.
Beware strangers bearing gifts
IF you a receive a call from a Hong Kong broking firm called Berkley Samson – hang up. The regulators have no record of such a firm there. Ditto Singapore and Thailand, despite their glossy brochure. This outfit and others make cold calls to Australian investors offering hot deals alleged in Nasdaq listings.
WA has been targeted by these foreign boiler-room pests. Redgate Wines in Margaret River says it has been bombarded with calls from alleged brokers pedaling dodgy investments.
Redgate chief Bill Ullinger informed one caller that he was dead, and asked to be removed from the data base. Bill has a keen sense of humour. In fact he hasn’t been well lately, and Briefcase wishes him a speedy recovery.