Saturday, May 19, 2012

Status update: Facebook an "unlike" on first trading day

In the dotcom boom more than a decade ago, technology companies became known for their "stag" listings when they hit the sharemarket on day one.

Investors who took big allocations in the floats bet large, driving share prices exponentially higher before eventually cashing out at the top.

A few pundits thought Facebook might repeat history.

But it was not to be.

The social network closed US$0.23 above its listing price of US$38 per share after hitting a brief high of around US$45 per share.

Facebook dragged along the bottom towards the close and was perilously close to going underwater at one point.

So is there a wealth building future for Facebook, and can it convince investors that it can monetise the product beyond a fad?

One shouldn't forget a Nasdaq computer glitch that delayed orders and degassed the fizz, but Nasdaq's boss says it made little or no difference to the share price performance.

Investors want to know if Facebook is more sizzle than sausage.

Thursday, May 17, 2012

Europe Central Bank cuts Greek financial lifeline as fears of Eurozone exit loom

Global stocks have taken another fall on the increasingly likelihood that Greece will be forced to exit the Eurozone.

The European Central Bank has decided to temporarily stop lending to Greek banks to limit its exposure.

The currently jitters are set to worsen in the countdown to fresh Greek elections in mid-June.

Listen to my analysis of the breaking developments from this morning's edition of AM.

Wednesday, May 16, 2012

Corporate watchdog reveals more cases of insider trading

The Australian Securities and Investments Commission says there have been more breaches of insider trading in the past three years than in the entire preceding decade.

Listen to my interview with ASIC deputy chairman Belinda Gibson broadcast on this morning's edition of AM.

In the three years to December last year, ASIC won 11 convictions for insider trading, with another seven cases yet to be decided.

In the prior decade to 2008, ASIC won 10 insider trading cases and lost five.

In a sign of a rise in illegal trading, ASIC says it is receiving around 200 alerts a day in relation to suspicious trading activity regarding the use of privileged information unavailable to the general market.

ASIC deputy chairman Belinda Gibson told AM and ABC News 24that the rise in prosecutions can be put down to greater surveillance by the regulator and in some cases greater temptations for investors.

"We're much better at looking for those cases and prosecuting them. What we have done since 2008 is really focus on the integrity of the markets and focus on detecting bad conduct and bringing the perpetrators to account," Ms Gibson said.

"I think that there is more opportunity as the market deepens. There is more opportunity where transactions become more sophisticated and more of the people we call gatekeepers have access to otherwise confidential information.

"Many of the cases we've brought are against employees of gatekeepers who are seeing other people's information and trading on it. are accountants, There are the investment advisors, there are the stock market registry providers - all those people that are intermediaries in bringing a corporation to the market."

Ms Gibson refused to rule out the use of telephone taps to trap insider traders under new powers given to the corporate watchdog in 2010.

Tuesday, May 15, 2012

Heads begin to roll at JP Morgan after US$2 billion trading loss

Heads have started to roll at the Wall Street banking giant JP Morgan Chase after revelations that it lost two billion US dollars in a failed trading strategy.

One of the bank's most senior executives is retiring after the London-based division she oversaw took bets that went horribly wrong.

Listen to my story broadcast on The World Today.

The heavy losses have raised serious concerns about excessive risk taking by banks and whether greater regulation is needed.

President Obama has also weighed in and he urged Wall Street to impose tighter regulations on risk.

Monday, May 14, 2012

Australian dollar heading back to earth, but dramatic correction not expected

The Australian dollar has dropped to its lowest level against the US currency this year as investors return their money to safe-haven currencies amid fears that Greece will exit the eurozone.

Here's my analysis from this morning's edition of AM, and I took a closer look at the various factors on The World Today.

Source: Bloomberg

Financial markets and European banks are preparing for Greece to leave the 17-member currency bloc as its struggles to form a coalition government weigh on global equity and currency markets.

The Australian dollar is trading just above parity with the greenback, and at 9:50am (AEST) was worth 100.2 US cents.

It was last below parity in December, when the collapse of the eurozone appeared likely.

Although the dollar is weakening, Thomson Reuters senior currency analyst John Noonan says he does not expect it to fall below 98 US cents.