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31 August 2012 (AFR) – Chi-X makes its mark

(31 August 2012, AFR, p21, George Liondis) ‘Alternative market operator Chi-X has increased its share of trading volume to more than 5 per cent for the first time, stepping up the competition against the Australian Securities Exchange.’ ‘The group, which launched as a rival to the ASX last year, broke through the mark on Wednesday … Continue reading

31 August 2012 (AFR) – Boart plunges 36pc on downgrade

(31 August 2012, AFR, p15, Perry Williams) ‘Boart Longyear, the world’s largest mineral exploration drilling company, has painted a bleak outlook for the global mining industry and warned that more projects will be shelved as miners cut back on development.’ ‘Shares in Australia’s largest contract driller plunged 36 per cent yesterday as the Utah-based company … Continue reading

31 August 2012 (AFR) – China’s steel forecasts belie miners’ optimism

(31 August 2012, AFR, p10, Angus Grigg Shanghai) ‘China’s steel-making peak body has slashed its outlook for long-term demand and forecasts the world’s second-biggest economy will need 40 per cent less steel by 2025 than estimates by Australia’s big three miners.’ ‘The downbeat forecast will put more pressure on the already battered iron ore price, … Continue reading

31 August 2012 (AFR) – China steel purge poses threat to boom

(31 August 2012, AFR, p1, Ayesha de Kretser, Jamie Freed and Michael Hobbs) ‘China’s biggest steel makers are planning to shut unprofitable capacity ­permanently over the second half of 2012 as the impact of slowing Chinese growth continues to shake iron ore markets.’ ‘The iron ore price plunged a further 5 per cent to $US90.30 in … Continue reading

30 August 2012 – MF Global update

Written update from Deloitte on the MF Global case and recovery of client funds – read it here.

30 August 2012 (AFR) – Catalonia test case for Spain

(30 August 2012, AFR, p17, Raphael Minder, Madrid, and New York Times) Shut Out of the Debt Markets, Catalonia Asks Madrid for Emergency Aid ‘MADRID — The most economically important region of Spain, Catalonia, asked the national government on Tuesday for more than 5 billion euros in emergency financing, underscoring a growing regional debt burden … Continue reading

28 August 2012 (The Australian) – All still a matter of timing

[COMMENT: Great article by Don Stammer which is another attempt to convince buy-and-hold investors that there are times when stocks need to be sold – even so-called Blue Chips. The “time in the market” adage that continues to be pedalled by the “professionals” in the finance industry is hog wash. It is time the real … Continue reading

29 August 2012 (The Age) – Dark clouds return to the market for new homes

(29 August 2012, The Age, BusinessDay, p1, Chris Zappone) ‘NEW home sales plunged to their second-lowest level in 11 years last month, ending three months of gains and pointing to more weakness in the real estate sector.’ ‘The Housing Industry Association’s new home sales report showed a 5.6 per cent fall, to 5682 homes, in … Continue reading

25 August 2012 (AFR) – Goods pile up across China

(25 August 2012, AFR, p14, Keith Bradsher, Guangzhou) ‘After three decades of torrid growth, China is encountering an unfamiliar problem with its newly struggling economy: a huge buildup of unsold goods that is cluttering shop floors, clogging car dealerships and filling factory warehouses.’ ‘The glut of everything from steel and household appliances to cars and … Continue reading

24 August 2012 (The Age) – China lines up supplies much closer to home

(24 August 2012, The Age, BusinessDay, Michael Komesaroff) ‘BHP’S decision to abandon the expansion of its Olympic Dam copper-uranium mine is said to be another sign that the commodity boom is coming to an end.’ ‘Commodity booms occur when there is a prolonged increase in prices and supply cannot respond fast enough to rapidly escalating … Continue reading

23 August 2012 (CNN) – Chinese manufacturing slumps to 9-month low

(23 August 2012, By Chris Isidore @CNNMoney) ‘NEW YORK (CNNMoney) — China’s factories continued to struggle in August, as a key manufacturing reading fell to a nine-month low.’ ‘HSBC’s initial purchasing manager’s Index for Chinese manufacturing fell to 47.8 from 49.3 in July, the bank said Thursday. Any reading below 50 indicates that factory activity … Continue reading

23 August 2012 (AFR) – A-REITs’ optimism surprises

(23 August 2012, AFR, p46, Zoë Fielding and Ben Wilmot) ‘Australian real estate investment trusts expect to earn more and pay higher distributions to shareholders in the 2013 financial year than they did in 2012.’ ‘Most trusts to have reported their results so far have issued guidance figures for earnings and distributions above their 2012 … Continue reading

23 August 2012 (AFR) – Battle of the inventory bulge begins

(23 August 2012, AFR, p21, Simon Rabinovitch Beijing) ‘Memories of the London Olympics are already beginning to fade.’ ‘Li Ning, a Chinese sportswear maker, had better hope that they last a while longer.’ ‘Like thousands of Chinese companies, from property developers to car manufacturers, Li Ning is sitting on a mountain of unsold products. Whether … Continue reading

23 August 2012 (The Age) – Russian gas giant gets go-ahead for Europe’s tallest tower

(23 August 2012, The Age, p13, Moscow, from AFP) ‘NATURAL gas giant Gazprom’s long-delayed and controversial ambitions of building Europe’s tallest skyscraper in Russia’s heritage-proud cultural capital of Saint Petersburg have been revived.’ ‘The project operator has revealed quietly on its website that President Vladimir Putin’s native city had given it the go-ahead to build … Continue reading

23 Aug 2012 (Herald-Sun) – Russia bid for Europe’s tallest skyscraper

[COMMENT: These plans to bid the next “world’s tallest buildings” usually do the rounds in the last couple of years of the building boom cycle, just before a major bust. The timing of this one seems to be a bit odd.] (23 August 2012, Herald-Sun, p34) ‘NATURAL gas giant Gazprom’s long-delayed and controversial ambitions of … Continue reading

21 August 2012 (AFR) – China drops a clanger with steel

[COMMENT: Great story, including the bar graph and chart of steel consumption.] (21 August 2012, AFR, p19, Angus Grigg) ‘When the words “Ponzi scheme” and China are used in the same sentence, there’s a good chance it’s a reference to the steel industry.’ ‘Like communist regimes of old, Beijing has long viewed steel production as … Continue reading

20 August 2012 (AFR) – ASX delivers retail investors a workover

[COMMENT: An interesting Letter to the Editor of the AFR, talking about the three parts of the Aussie market:- Pure Match, Volume Match and Trade Match. Worthy of more research…] (20 August 2012, AFR, p32, James Powell letter) ‘The Australian Securities Exchange’s views on the ugly sisters, high frequency trading and dark pools, demand closer … Continue reading

20 August 2012 (AFR) – Construction groups face tough times

(20 August 2012, AFR, p41, Ben Hurley) ‘Poor building conditions are driving a steady stream of companies in the construction sector to the wall.’ ‘The trend is alarming industry groups and causing major companies such as cement maker Adelaide Brighton to lower their profit expectations.’ ‘West Australian crane hire company D&G Verticon became one of … Continue reading

20 August 2012 (AFR) – Go with big money flows in commodities – buy hope

(20 August 2012, AFR, p29, Stephen Wyatt) ‘Commodities are moving higher. Rotation is under way. Investors are moving from more defensive high-yielding stocks like the banks and Telstra back into cyclicals like commodities and resource equities.’ ‘This may well be a last hurrah for commodities because of the steady ramp-up in supply after a decade … Continue reading

20 August 2012 (AFR) – Chinese home prices begin to recover

(20 August 2012, AFR, p11, Lisa Murray) ‘China’s housing market is showing some signs of life as prices rose in 50 of its 70 major cities last month, suggesting that the government’s interest rate cuts are starting to take effect.’ ‘The result is a marked improvement from June, when prices rose in 25 of the … Continue reading

16 August 2012 (AFR) – UK index slides

(16 August 2012, AFR, p49, Jennifer Ryan, Bloomberg) U.K. Home-Price Index Falls to Lowest in a Year as Sales Decline ‘A U.K. house-price index dropped to the lowest in a year as property transactions fell for a fourth month, the Royal Institution of Chartered Surveyors said.’ ‘The price gauge fell to minus 24 from minus … Continue reading

16 August 2012 (AFR) – High-frequency trading: is faster better?

(16 August, 2012, AFR, p2, Jennifer Hewett) ‘The fight over the pros and cons of the growing use of high-frequency trading in the Australian market is getting serious in public as well as in private.’ ‘The consultation paper put out by the Australian Securities and Investments Commission this week is part of the official response … Continue reading

15 August 2012 (The Age) – Europe’s slump deepens

(15 August 2012, The Age, BusinessDay, p5, Simone Meier) ‘The euro-area economy contracted in the second quarter after the worsening debt crisis and tougher budget cuts forced at least five nations into recessions.’ ‘Gross domestic product in the 17-nation currency bloc fell 0.2 per cent from the first quarter, when it stagnated, the European Union’s … Continue reading

15 August 2012 (AFR) – Robo trading v old school

(15 August 2012, AFR, p33, Stephen Shore) ‘Twelve seconds after 10 o’clock yesterday morning a computer program ordered a single Brickworks share, pushing the stock up 3.5 per cent. Then nothing happened for 80 minutes.’ ‘Algorithms often order single shares to set new price points. In an infrequently traded stock like Brickworks, it can sometime … Continue reading

15 August 2012 (AFR) – Don’t get tripped up chasing dividends

[COMMENT: Many conventional traditional investors still buy-and-hold and use the “excuse” that they are holding underperforming so-called blue chip stocks for the dividends. This AFR article provides evidence that this income producing strategy can be severely flawed. That is, investors might be better off selling under-performing stocks, and investing either in better performers or in … Continue reading

15 August 2012 (AFR) – NAB risk man warns of shadow sector

(15 August 2012, AFR, p23, John Kehoe) ‘The influx of global regulations in response to the financial crisis risks pushing some activities into the shadow banking sector and sowing the seeds of the next financial catastrophe, a senior National Australia Bank risk officer has warned.’ ‘Lindesay Brine, head of controls and reporting at the bank’s … Continue reading

15 August 2012 (AFR) – HFT crackdown needed, funds say

(15 August 2012, AFR, p15, Michael Smith, Bianca Hartge-Hazelman and Stephen Shore) ‘Leading fund managers are calling for greater regulation of high frequency trading which they warn is resulting in market manipulation and insider trading at the expense of retail shareholders.’ ‘Perpetual Investments said yesterday it would join Schroders Australia and Antares Capital in questioning … Continue reading

14 August 2012 (AFR) – ASIC confronts a trading monster

(14 August 2012, AFR, p52, Chanticleer, Tony Boyd) ‘The computer-driven trading monster that is overtaking the world’s sharemarkets and harming the interests of ­traditional pension fund investors has another black mark against its name.’ ‘The latest market supervision report from the Australian Securities and Investments Commission (ASIC) shows alleged breaches of market integrity rules by … Continue reading

14 August 2012 (AFR) – Japan slumps on Europe woes

(14 August, 2012, p13, Keiko Ujikane, Tokyo, and Bloomberg) Japan Post-Quake Rebound Wanes as Spending Nears Stall: Economy ‘Japan’s reconstruction-fueled rebound waned in the second quarter as consumer spending growth almost stalled and export gains diminished, increasing the chance for monetary and fiscal stimulus.’ ‘Gross domestic product advanced an annualized 1.4 percent in the three … Continue reading

11 August 2012 (AFR) – Gross spells out doomsday scenario for investors

[COMMENT: Exploding the Myths (to borrow a phrase from Frank Watkins) – where “conventional wisdom” has said that equities provide the best returns “in the long run”; but is it really true? Read on…] (11 August 2012, AFR, p20, Anna Bernasek) ‘Bill Gross, billionaire king of the bond market, could be the biggest party pooper … Continue reading