Traders Suspects Manipulation Behind 6.5% One-Day Rise in ANZ Share Value
Traders suspect manipulation when the Australian Stock Exchange (ASX) started trading on Thursday morning. The suspicion was triggered by a surge in share prices of a number of major ASX200 stocks, including that of ANZ Bank which logged a 6.5 per cent one-day rise.
The mystery trades caused a $1.67 boost from Wednesday's ANZ closing price of $25.79 to $27.63 when the bell opened in the morning. However, the stock eventually settled at $26.16.
Besides ANZ stocks, surges were observed also in the share prices of Ansell, Aristocrat, AGL, Commonwealth Bank and the Bank of Queensland at the opening bell, prompting a leading stockbroker to order five of his brokers to ask the ASX what is happening.
However, the stock broker company said the ASX was clueless, but pointed out the trades are within a reasonable range.
The Sydney Morning Herald quoted ASX spokesman Matthew Gibbs who explained the price jumps to result of buying orders and insisted it has nothing to do with the trading system.
The overseer for real-time trading, the Australian Securities Investment Commission, said it was aware of the share prices surge in ANZ and is holding an informal investigation into the matter.
The price surge partly caused the S&P/ASX 200 index to close up 0.7 per cent at 4,559.40. It is the highest level since July 2011 which was also reported as due to third-quarter growth data from China meeting expectations and September data for Australia providing investors reason to hope for improvement.
Meanwhile, a powerful group of investors made up of Australian and U.S. fund managers wrote the Australian Securities and Investments Commission to limit the advantages that high-frequency traders have through lightning fast trading. The group collectively oversees over $1 trillion in investable funds.
"Everyone is deeply troubled. The issue is finding the best way to bring about sustainable reform to ensure the markets are fair," The Australian quoted Zachary May, policy director of Industry Super Network.
The high-frequency traders use computer programs that places and cancels orders in a fraction of a second and also install their computer equipment as close to the ASX as possible to take advantage of tiny margins several times a second, which collectively equates to thousands of times a day.
