Friday, 18 April 2014

Australian Shares are Being Manipulated, Say Researchers

"Volatility in the end of day price is quite a problem in this marketplace," he said.

"The price is dramatically bouncing around at the end of the day."

The sharemarket index at the end of each financial period is ­typically used as a benchmark price for the valuation of companies, executive compensation, superannuation policies and capital returns to investors.

"It is way more variable than you would expect it to be based on other markets," Mr Aitkin said.

The average ratio of market dislocation to trading turnover on the ASX is 3.7 basis points, which dwarfs other markets including Hong Kong (0.06), London (0.04) and the Indian stock exchange (0.41).
The revelations put renewed pressure on the corporate regulator, which is already facing criticism over its ­failure to rein in Commonwealth Bank's rogue traders, uncover corruption allegations against Leighton ­Holdings, seek a jail sentence against former Gunns ­chairman and convicted insider trader John Gay or ­pursue a case against the David Jones board for suspicious director trades.

Investors are also still seething over voluntary fines agreed by the Australian Securities and Investments ­Commission with UBS and National Australia Bank – announced on Christmas Eve.

The fines came after NAB was revealed as the mystery client behind a shock spike in major blue-chip stocks on October 18 last year.

Retail investors and brokers have also contacted the Financial Review concerned that ASIC is now backing down from earlier comments that it would clamp down on high-frequency trading if the controversial practice grew unrestrained.

If those who are manipulating the market are violating the Law then they must be prosecuted. Unpunished corruption is the mark of many third world countries.

[Posted at the SpookyWeather blog, April 18th, 2014.]

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