hedge funds manipulating market

Miner has dig at ASX manipulation
Kevin Andrusiak
March 17, 2007

KINGSGATE chairman Ross Smyth-Kirk has again taken aim at the Australian Securities Exchange, claiming that the monopoly entity oversees a market full of manipulation and treats it as a "fact of life".
Mr Smyth-Kirk was unavailable for comment yesterday, however he again went public on Thursday with heavy claims that the ASX was turning a blind eye to market manipulation.
That followed comments in his chairman's address last November at Kingsgate's annual general meeting for which he was censored by the ASX.

At the time, the ASX refused to publish his address while it contained allegations that the share market was the most manipulated he had seen.

The comments were subsequently published on Kingsgate's website.

On Thursday, he told ABC Television's Lateline Business program that the market was still being manipulated - possibly by hedge funds.

"Despite what the ASX likes to think, there is manipulation these days because of the value of money floating around," Mr Smyth-Kirk said.

"There are often irregular trades that you can see.

"The people that are astute and are looking at it can see that they are irregular."

He cited a trading in Kingsgate shares in which a small parcel of the minerals explorer's stock was sold for well below the market price at the time.

"There was an instance where the share price was trading at $3.96 and suddenly there was a sale of a very small number that went through at $3.79," he said.

His reference appears to coincide with a situation on February 27 when Kingsgate shares opened at $3.96 before closing 16c weaker.

The size of the "small parcel" of shares Mr Smyth-Kirk referred to is not immediately clear.

However, he believed the market had not priced Kingsgate shares properly.

"There is no doubt in our mind Kingsgate is vastly under-valued," he said.

The ASX declined to wade into the debate yesterday.

However, ASX spokesman Matthew Gibbs said there was evidence that from "time to time" there was market manipulation.

ASX figures show it referred five cases of possible market manipulation to the Australian Securities & Investments Commission in the last six months of 2006.

Mr Gibbs said he could not give details of the possible breaches.

"There is not a trade on ASX we don't see," he said.

"We get about one alert a minute and overwhelmingly most of those are easily explained."

http://www.theaustralian.news.com.au:80/story/0,20867,21395476-643,00.html