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Mystery trades hit ANZ, CBA stocks

Date
October 18, 2012 - 8:41AM



Mark Hawthorne



Stockbrokers across the country fear that the share prices of a number of major ASX200 stocks - including ANZ Bank - were manipulated when trade opened this morning.

Mystery trades in ANZ pushed the share price of ANZ up $1.67, or 6.5 per cent, when trading began at 10am.

ANZ, which closed at $25.79 yesterday, soared to $27.63 per share on the opening bell, before the stock collapsed to $26.16.

In the first few minutes of trading about a third of the average daily number shares in ANZ changed hands. Large fluctuations also hit the share prices of Ansell, Aristocrat and AGL. Commonwealth Bank and Bank of Queensland also spiked when the ASX opened.


"I've had five of my brokers contact the ASX and they are clueless as to what has gone on," said one of Australia's leading stockbrokers.

"They are saying the trades fall within a reasonable range, but if a broker pushed a stock up five per cent we'd cop a $25,000 fine. Right now, I'd say this is in the 'too hard' basket for market control at the ASX."

Such is the size of the trades that they affected the price of options traded on the S&P/ASX 200 Index - commonly referred to in the investment world as XJO Index Options. The index tracks shares that form the S&P/ASX 200. The XJO Index rose to 4606 on the back of the moves, before settling back to 4575.

A number of brokers noted that those options expire at the close of trade today.

"I hope ASIC and the ASX investigate the ANZ open at $27.63 this morning," posted one reader on the BusinessDay markets blog. "It might just be a coincidence that index options expire today."

Brokers have called for the trades to be investigated immediately because they caused volatility on markets and could cause substantial losses.

"Someone has made big money on the Index trades this morning," said one major broker.

"Either that or an algorithm has gone haywire, a mistake has been made, or these trades are deliberate.' Either way, do we have an orderly market?"

Many brokers complained that the shift in responsibility for control of the market from the ASX to ASIC meant that nothing was done when trades of this nature caused alarm bells to ring.

"We rang the ASX, they said 'Ring ASIC'. We rang ASIC, they said 'Ring the ASX'," said one Melbourne-based broker.

Read more: http://www.watoday.com.au/business/mystery-trades-hit-anz-cba-stocks-20121018-27ssj.html#ixzz29bi6U2t3