broker report

As promised, I took a look at the broker reports. This data if for the 3 weeks from 1/7 to 21/7, which is the latest data I have.

Before I launch into it, I just wanted to clarify that we use the volume through CommSec, Westpac, eTrade and a handful of others as a proxy for the 'retail' investor and/or day traders. All of the other major brokers tend to trade either on their own proprietary book of for insto clients and/or high net worth individuals. I appreciate this is not an exact science, but in the absence of very granular data, it gives the 'feel' of what is happening.

As Keynes said, "it's better to be approximately right, than exactly wrong".

CNP

On the net-buyer side, CommSec continued to dominate the action. Of the 190m shares traded, CommSec accounted for 74.7m. Their clients increased CNP holdings by 12.1m during the period. The way to think about this is that 2 of every 5 CNP shares that you see changing hands are doing so through CommSec. Second place was Grange Securities who net-bought 3.6m shares, followed by ABN Amro (3m), Citi (2m), BellPotter (1.9m), Merrils (1.4m), Morgan Stanley (1.2m). Next was Fimat Australia who bought a cool 1m shares in just 2 transactions.

On the seller side, ABS topped the list with 8m CNP shares, Macquarie 6.6m, Goldman Sachs 6.2m. Next, surprisingly was Westpac whose clients net-sold almost 2m shares during the period.

As I have said on previous reports, the CNP dynamic has changed in the last couple of months. Previously we say retail brokers appearing consistently as net-buyers in positions 1,2 and 3. This is no longer the case. We are also seeing a lot less short-selling as evidenced by the data I posted earlier. Seeing some of the larger brokers at the top of the list is starting to give me more comfort but this of course is countered in part to see big names topping the sell list.


CER

CER is a completely different beast. During the period around 97m shares changed hands. EL&C Baillieu take pole position picking up 5.2m shares during the period, followed by our friends at ABN Amro (4.7m), UBS (3.5m) and Morgan Stanley (2.7m). This is a stock dominated by insto buyers.

On the net-sell side, Macquarie dropped 6.6m, Merrils 4.8m, Credit Suisse 5.6m and JP Morgan 3.6m.

The numbers for Deutsche Bank potentially need some adjustment. They are showing 24.7m buy / 26m sell. This is almost certainly due to the fact that they are buying on-market for Orbis and the crossing the shares out to the client in subsequent large transactions. To put this into perspective, over 25% of the volume you see changing hands on the CER screen (i.e. 1 in 4 shares) is Deutsche buying for Orbis. As I said yesterday, the numbers involved are HUGE and to achieve what they have without spooking the market is quite remarkable.