ASX extended hours suits big end of town

PETER HAYES: As we approach the end of what can only be described as a fairly disappointing financial year, I can only hope that the powers that be in that venerable institution, the Australian Securities Exchange, desist with their fanciful notion of extending the opening hours of the Exchange.

My prediction is that if they do proceed with this idea, the result will be a mass exodus of retail brokers from the industry.

Extending the bourse’s daily trading hours would be mental disintegration of the highest order, akin to a stint in Guantanamo Bay detention camp if you ask me.

The current situation of screen staring for six hours per weekday is tantamount to torture, and an extension of this would see me applying for a far more “cushy” job, perhaps as a war correspondent for the ABC.

Even water boring may be a more stimulating alternative.

The reasoning behind this push to extend its hours must stem from the ASX struggling with lower investor participation rates.

Source: Australian Securities Exchange

Combined with the fact the all ordinaries has been a pretty disappointing place to invest your coin since October, 2007.

Since then the Australian market has come down from an all-time high of 6748 points, to its current level where it is hovering around the 4420 point mark.

With the Minerals Resource Rent Tax, carbon tax, and now rumoured changes to superannuation contributions for high-income earners, the ASX has been laundered.

It is almost as convenient to take money from the ASX as it is for a HSU union official to…! But, I digress.

The ASX obviously is looking at the companies that populate the larger end of town to support these proposed longer trading days. It usually does.

It is a bit like the Board of the RBA, in that it is made up of people who inhabit a higher stratosphere than the likes occupied by this correspondent.

In the latest statistics, released by the Australian Financial Markets Authority (AFMA) the figures are impressive as they show that the turnover has only dropped slightly in a down market.

 

Source: Australian Securities Exchange 2010 share ownship study

In 2010/2011 the physical market turnover in shares has decreased only 1.5 per cent, but the current financial year would be a reasonably larger drop.

I know anecdotally that many retail based brokers in Perth are struggling, and the interest in small mining stocks has waned for most of the past financial year.

Hopefully July 2012 takes us to a new financial paradigm, and a new financial era for yours truly.

In all honesty I’m really looking forward to having One Off The Wood with the esteemed Editor of this publication to see the end of an annus horibils, especially if he’s buying.

 

Peter Hayes
Investment Manager