insto - Australian financial markets

What should have been a fairly positive session for the sector ended up being an opportunity for investors to take some money off the table heading into the weekend.

With European and US markets yet to react to the surprise timing of the Fed’s lifting of the discount rate we sense a real reluctance for investors to establish new positions. 

As we know markets hate surprises and today’s Fed action was clearly a surprise.  It also shows how fragile investor sentiment really is and how quickly underlying fears can resurface.

 The public company which operates the ASX beat market expectations with a $168 million half-year profit, as revenue rose 6.4 per cent to $309 million with growth across all parts of the business.

 The market ended the week in positive territory, the ASX 200 adding 47.8 points to finish the week at 4561.1. Here’s how IG Markets’ Ben Potter saw the last session of the week:

The market is still very nervous and lacking confidence, despite the positive developments overnight in the Euro zone and the weaker-than-expected Chinese inflation numbers yesterday.

One of the more puzzling monopolies in Australia, the ASX's power to effectively regulate competition out of sight, was dismantled with a sweep of a ministerial pen, reports Bernard Kellerman.

While many companies are reluctant to admit their potential greenhouse gas costs, the number of institutional investors seeking this information has spiked, repots Bernard Kellerman.

The Carbon Disclosure Project has evolved as the pre-eminent mechanism for communication between companies and investors on climate change and carbon exposure issues. It has been run globally for 7 years, but for the fourth year has been expanded to cover the top 200 Australian and top 50 New Zealand companies.

S&P Indices and the Australian Securities Exchange have launched the new S&P/ASX Infrastructure Index, commencing Monday 16 November 2009.

The new index will add to the Australian-focused S&P/ASX suite of indices, while also forming part of the global S&P “thematic indices family”, which includes the S&P Global Infrastructure Index.

The index methodology borrows from that used by the S&P global infrastructure index while also being tailored for Australian market conditions, and will be available as an end-of-day index.

While the corporate big guns have plenty of ammo in their kit bags, many of the mid-market listed companies are still doing it tough. Insto editor Bernard Kellerman spoke to the executives running a couple of mid-market businesses and heard two very different approaches to dealing with the GFC.

DIY project finance

When the banking syndicate decided to back away from his company’s transformational infrastructure project, Pipe Networks’ Bevan Slattery bounced back with an original response.

Financial services issuers, outside of the Big Four banks, are likely to remain on a steady diet of vanilla transactions, as Elizabeth Fry explains.

Up until now retail investor interest in listed fixed interest securities in Australia has been focussed on hybrid securities and convertible notes which appear more exciting because of their equity-linked features and higher yields.

The ASX has shelved rather than abandoned its plans to tap the US private placement markets for a reported US$145m, citing market uncertainty and the demands of investors. “We spent quite a long time – 6 to 9 months - getting regulatory and tax clearances and making informal soundings of prospective investors. However, both from a pricing and particularly from a covenant point of view, we don’t believe the timing is right to proceed with the financing,” said CEO Robert Elstone at a media briefing to discuss the ASX’s FY 2008-09 results.

ASX embraces carbon

As part of its master plan to be ready for a full-blown emissions trading system, over successive weeks in July, the ASX listed thermal coal futures and options (FOB Newcastle), New Zealand electricity futures and options and Victorian gas futures. These products are the first tranche in a suite of new energy and environmental products that ASX is proposing to launch. Others include Renewable Energy Certificate futures and options and Australian Emissions Unit futures and options pending the passage of the Carbon Pollution Reduction Scheme legislation.