Speaking of confusion with Nominees it is interesting to reflect...

Speaking of confusion with Nominees it is interesting to reflect upon the relatively static looking holdings of one of the company's largest holders. As it turns out, HSBC looked after the Dundee/Goodman holding that cut and run last year just as the company was starting to gain some traction in the market.

The Top 30 register holdings for HSBC Custody Nominees, over the course of this year with an emphasis on very recently, are summarized below.

ENTITY: HSBC Custody Nominees

Mar-04, 2010: 5,266,691 shares
Apr-20, 2010: 6,233,752 shares
Jun-15, 2010: 5,369,524 shares
Aug-17, 2010: 5,543,003 shares
Aug-24, 2010: 5,091,889 shares
Aug-25, 2010: 5,133,649 shares

HSBC is usually placed No 1 on the register although a few recent sales has moved it back into the No 2 position.

A couple of questions to consider:

- Does a slide down the register to No 2 from No 1 indicate that the clients of HSBC are losing interest?

- Does their static holding demonstrate that they are content with their holding and are just happy to sit back and see what happens with Rocklands?

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SOME ANSWERS

Firstly their holding hasn't fluctuated in size much at all, after a blip in April, so there definitely isn't any slide that is in evidence. They are neck and neck with a company supporter in C4 Pty Ltd which has a holding of 5,272,644 shares which hasn't changed all year. In fact none of the easy to identify company supporters in the Top 30 have made any changes to their holdings.

Secondly, as for their static 'looking' holding, the HSBC Noms trading for the months of May, June and July is actually quite interesting.

May Register Movements:

There are 4 separate accounts in evidence representing HSBC CUSTODY NOMINEES

HSBC CUSTODY NOMINEES 1
Opening: Balance: 5,951,972
Closing Balance: 5,131,131
Off the Register:1,020,118
On the Register: 199,277
Net Gain: -820,841

The above transactions are tagged to ANZ Nominees (how convenient, 'Nominees on behalf of Nominees', why would they do that and make transparency difficult?)


HSBC CUSTODY NOMINEES 2
Opening: Balance: 221,642
Closing Balance: 80,321
Off the Register: 488,212
On the Register: 346,891
Net Gain: -141,321

(The above transactions are tagged to Cleland Projects)

HSBC CUSTODY NOMINEES 3 (Tagged to a Private Holder)
Opening: Balance: 181,376
Closing Balance: 176,084
Off the Register: 83,166
On the Register: 77,874
Net Gain: -5,292

HSBC CUSTODY NOMINEES 4 (Referenced to State One Nominees)
Opening: Balance: 40,808
Closing Balance: 42,809
Off the Register: 77,631
On the Register: 79,632
Net Gain: 2,001


SUMMARY ACROSS ALL ACCOUNTS for MAY

HSBC CUSTODY NOMINEES (AUST)
Off the Register: 703,674
On the Register: 1,669,127
Net Gain: -965,453

(There is a reference back to ANZ Nominees attached to the above summary of transactions )

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The static Top 30 numbers for HSBC CUSTODY NOMINEES, is one thing but there is actually a lot of activity associated with the holding that impacts the register. We all are aware of the price manipulation and capping that has taken place for years in the market now, and numbers such as the above do help to identify how the volumes can originate.

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June Register Movements: SUMMARY for just the Major HSBC Account

HSBC CUSTODY NOMINEES 1
Opening: Balance: 5,131,131
Closing Balance: 5,474,459
Off the Register: 253,457
On the Register: 596,785
Net Gain: 343,328

(The above transactions are tagged to Deauville Investments.)


SUMMARY ACROSS ALL ACCOUNTS for JUNE:

HSBC CUSTODY NOMINEES (AUST)
Off the Register: 626,674
On the Register: 961,390
Net Gain: 334,716

Interestingly the transactions for the June Summary above are tagged to NATIONAL MARGIN



July Register Movement: SUMMARY of the Major Accounts

HSBC CUSTODY NOMINEES 1
Opening: Balance: 5,474,459
Closing Balance: 5,420,318
Off the Register: 494,843
On the Register: 440,702
Net Gain: -54,141

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The above transactions are tagged to a University. I am wondering if the holdings in these Nominee Accounts are in fact lent out for margin lending purposes. I actually noticed to a link in my own account that pointed to an Asian entity and again wondered about margin lending in respect to custodial accounts, where holdings could be pooled and lent out unbeknown to the beneficial owners. It doesn't sound right to me and I will me making further enquiries......maybe it is in the fine print that doesn't get read thoroughly when an account is opened?

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HSBC CUSTODY NOMINEES 2
Opening: Balance: 81,092
Closing Balance: 9,067
Off the Register: 292,244
On the Register: 220,219
Net Gain: -72,025

(The above transactions are tagged to Lippo Securities, another entity that has consistently appeared in the Top 30 in its own right)


SUMMARY ACROSS ALL ACCOUNTS for JULY:

HSBC CUSTODY NOMINEES (AUST)
Off the Register: 1,103,045
On the Register: 984,591
Net Gain: -118,454


Again Looking at the Top 30 holdings is a little deceiving, as the HSBC CUSTODY NOMINEES are a lot more active in the market for their various clients than their virtually static register numbers suggest. Over the three months something like 3.23 million shares were sold and around 2.47 mill shares were bought through the HSBC Nominnee Accounts yet their actual holding as per the Top 30 statements hardly budged over that time.

Interestingly, the very large nominee holding that is part of the HSBC Group has links to two holders that have appeared in the Top of the Register in their own right. I refer to Lippo Securities and Deauville Investments.

Lippo Securities appeared back in June with 674,307 shares but has dropped back a little and I suspect that it is now just beneath the current Top 30, while Deauville Investments quite recently entered the Top 30. Deauville Investments made its appearance for the first time this month with 850,000 shares accumulated in its own right.

Probably another coincidence but then again......Who knows?


The point about all the above is that the static looking HSBC Custody Nominees holdings as per the TOP 30 lists, is actually the source of a lot of stock that gets churned through the market. Well we do know that the algobots are always active. But why, because if it is related to Deutsche Bank trading, it isn't making any money with a gap between the average buying price and the average selling price in the red and getting larger.

Forgetting about HSBC Noms, the Deutsche Bank trading is interesting in itself. For this year the trading stats between March 6 and August 24 are as follows.

March 6, 2010 - Year to date Numbers
Total value: $13.4 mill
Shares Bought: 1,298,000
Shares Sold: 2,176,000
Shares Net Sold: -878,000
Avg Buy Price: $3.85
Avg Sell Price: $3.87

August 24, 20010 - Year to date Numbers
Total value: $118.7 mill
Shares Bought: 14,101,250
Shares Sold: 15,587,063
Shares Net Sold: -1,485,813
Avg Buy Price: $4.07
Avg Sell Price: $3.93

The above does provide some perspective as to what is playing out, even if it doesn't explain why!

Cheers
Nev

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