If the ASX Ltd and ASIC can’t be expected to get disclosure and timely surveillance spot on, why should other companies be queried or chided for their faulty disclosure or unexplained price movements?
What we saw yesterday was the ultimate disgrace for the ASX Ltd and market regulation.
The listed company controlling the ASX had a significant bit of market disclosure forced out of it after the a newspaper report in The Australian that pointed out that the 10% rise in the ASX share price in the last week amid talk of possible deals to be announced at today’s AGM.
The news saw the shares open at $36.15, compared with yesterday’s close of $33.79, but those bids quickly disappeared with the statement.
The statement band its contents left the shares off 27c at $33.52, still up around 10% over the past week.
In fact the shares are up 16% since hitting the most recent low of $29.11 on August 31.
So much for new, aggressive market surveillance.
That a 16% rise in the share price of a leading company has gone unexplained is weak oversight of the market.
The exchange recently lost its market surveillance role over the ASX to the Australian Securities and Investments Commission, after a move by the former government to introduce new competition.
ASIC may have the reins, but on yesterday’s disclosure and the movement in the ASX share price since the end of August, it doesn’t deserve to have the role.
It’s asleep at the wheel of regulation, once again.
In its statement, ASX Ltd said it had had talks with a small number of exchange groups regarding possible business combinations, but these had not gone anywhere. :
"ASX is conscientious in evaluating its strategic and competitive options in that environment and has had discussions with a small number of exchange groups regarding possible business combinations,” the ASX said today
"None of those discussions has resulted in a disclosable transaction proposal."
The ASX, which has a market value of almost $6 billion, did not name which parties it has held discussions with.
The statement read:
"There are many factors that might have contributed to movements in the ASX share price over the recent period.
By way of update, since the release of the August 2010 Annual Report (19 August 2010) there has been a strengthening trend in some key metrics of ASX market activity compared to the same period last year, in particular in relation to derivative trading volumes.
"For the first 12 weeks of the current financial year stock option trade activity has lifted (up 7%) and the futures market activity is showing signs of a strong recovery (up 36%).
"Further commentary on activity trends will be provided at tomorrow’s AGM.
As stated in the Managing Director and CEO’s Report included in ASX Limited’s 2010 Annual Report, exchange traded markets are undergoing a period of profound structural change.
"ASX is conscientious in evaluating its strategic and competitive options in that environment and has had discussions with a small number of exchange groups regarding possible business combinations. None of those discussions has resulted in a disclosable transaction proposal"
But did someone know of them? The 16% jump in the share price since August 31 was not due solely to improving trading in options and derivatives.
Let’s hope there’s more disclosure and shareholders as some tough questions at today’s AGM.
How many people sold out of the stock from August 31 to Monday evening in ignorance?
Time for a class action?
