Here's some more information to back up my thoughts re possible Short Selling of THR and and many other Stocks on the A.S.X. by the use of Borrowed Shares from various Sources like Nominee Companies;Quote:-
asx said no to short sale data offer (trader_10) Post: 214211 (Start of thread) Views: 51 Posted: 23/03/08 23:16 Sentiment: Buy Disclosure: Stock Held From: 20.139.xxx.xxx New Post Post Reply Thread View Back << Previous Post Next Post >>
ASX 'said no' to short sale data offer
THE Australian Securities Exchange rejected an offer made in November by some key "stock lenders" to provide more disclosure on the $200 billion stock lending industry, which has come under attack for allowing hedge fund speculators to sell shares short and push companies close to collapse. The Weekend Australian understands that the ASX met a small group of key lenders four months ago. The lenders, who all work in broking or custodian businesses, reportedly offered to provide the ASX with share lending data, including how much stock was available for loan on various stocks and how much had been lent out. They say the ASX response was along the lines of, "What are we supposed to do with it?" A year earlier the Australian Share Lenders Association (ASLA) requested a meeting with the ASX to discuss the role of securities lending. Some of the topics discussed included transparency and process. ASLA chairman Natalie Floate confirmed the meeting took place and said ASLA's lending members had volunteered to publish their on-loan positions. But the consensus at the meeting was that the information provided might not be valuable to the market. Some suggest the ASX decided not to accept the offer because it benefits from volatility. Share lending is an integral part of short selling, a way by which sophisticated investors make money in falling markets. Selling short is selling shares you do not own. To do so in safety, short sellers borrow shares from owners or custodians, which also means they are not compelled to label the sales as short sales, even though the stock lenders know. Critics say that the ASX could make the market more transparent by asking participants using the CHESS system to code any share lending on the buy and sell side so that it is automatically logged at the end of the day. "As an industry, we agree there should be more transparency. Securities lending has been around for a long time and there are many uses for share lending, with short selling being just one of them," Ms Floate said. These revelations come just days after the ASX protested that it had warned ASIC and Treasury officials in April last year and again in February that a legislative loophole was leaving stock market investors uninformed about the amount of short selling taking place. When asked about the meetings, and why the ASX reportedly declined a request to get more information from stock lenders, a spokesman for the ASX said: "The ASX is frequently in communication with the stock lending association (including as recently as today) and we do share information." Borrowed shares can be used to take long or short positions, betting on whether shares will rise or fall, or to manipulate voting at companies' annual meetings. The transactions are exempt from capital gains tax. A short seller borrows a share and then sells it in the hope of buying it back more cheaply later. The practice can put downward pressure on shares, triggering margin calls for investors who have borrowed to buy stock, potentially driving shares even lower. ASX chief executive Rob Elstone said recently that it was not short selling that was the issue, but the related stock lending activity. "It lacks transparency and, depending upon how many links there are in the stock-lending chain, that has the potential to raise systematic risk issues," he said. Industry sources say the reason for the ASX's finger pointing at ASIC last week over what it said was the need to regulate short selling, was to discredit ASIC ahead of a submission that the latter has made to the Government on whether to issue new exchange licences and therefore break open the ASX's monopoly. "ASIC has put in its paper and that will now be left for the Government to make a decision," the source said. The practice of "stock lending" is at the centre of a regulatory and legislative review due to the recent abuses. Third parties, such as international hedge funds, have been borrowing shares that they then short sell and buy back later at a cheaper price. Stock lending cannot be traced and the ASX admits it has no idea what proportion of shares have been "lent" to traders. Ms Floate said the share lending industry was growing. "All activity on the market is increasing. The share lending market is also growing, particularly with the mandatory contributions of 9 per cent -- our traditional lenders are growing 9 per cent year on year," she said. She said that after the negative publicity on share lending in recent weeks, the industry was planning to issue a joint message in the next 10 days. Share lending is a key tool that allows hedge funds to short stocks. If they cannot borrow stock, short selling becomes a lot more difficult. In Australia, at any point in time, up to $200 billion of Australian shares, or more than 20 per cent of the entire stock market, are on loan to traders. The ASX recently put out a press release trying to end "ambiguity" over the issue, telling stockbrokers they had a duty to report all short selling by clients, even those using borrowed stock, or risk heavy fines or up to six months in jail. The Treasurer called on the ASX and the corporate regulator, the Australian Securities and Investments Commission, to report on the adequacy of regulation covering stock lending, to determine if changes to the Corporations Act were required. //End Quote
Smaller Companies like THR can be Blasted Down by Short Selling and become completely Undervalued. This looks to be the case with THR!
No responbsibility taken for any losses in association with this Posting.
Regards,
moly
THR Price at posting:
0.0¢ Sentiment: ST Buy Disclosure: Held
