ASX - ASX Limited

reece55 said:

Prawn
There are many variants on how you determine your method to profit from using T/A, but almost all use the old saying "Buy into strength, sell into weakness". For an investor, this seems silly, because you are focusing on the fact that a particular business is sound and has a good outlook and therefore is undervalued by the market. If you are trading, you are seeking quick moves and place tight stops to minimize losses. We are looking to capitalise on upward momentum in the case of a long position and stocks that are going down don't qualify under this criteria.... ASX might be a great Company, but T/A doesn't place any bias on this opinion.

Kauri may also be trading using leverage, which may further lead him to maintain a tight stop.....

Cheers

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Julia said:

Prawn, you have expressed my question on the pure TA approach, and Reece you've answered it. Whilst I understand the principle and it makes complete sense with respect to companies which might be considered, umm, insubstantial, with a monopoly like the ASX which is bound to have dips in an overall uptrend, I just don't get why you'd incur tax and brokerage, just to buy back in when the trend resumes.

As Prawn says, not having a go at all, but it just puzzles me.
Kauri, have you considered taking into account the fundamental situation as a sort of modification to your pure TA?

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Julia said:

Apologies if there is already a thread on ASX. I can't find one.

I heard something about another couple of exchanges shortly becoming available. So ASX would no longer have a monopoly.

Does anyone know anything about this?

With thanks.

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ghostworld said:

This has been on the papers recently. I think i originally read about this in AFR. Here's a link from investordaily website.

http://www.investordaily.com/cps/rde/xchg/id/style/2547.htm?rdeCOQ=SID-3F579BCE-40504D87


ASX monopoly threatened
Powerful brokers vie for trading licences
By Madeleine Collins
Tue 24 Jul 2007

Large brokerage houses are challenging the ASX's monopoly on equity markets.

Alternative trading platforms could carve up the monopoly of the Australian Securities Exchange (ASX) if bids to win new market licenses succeed.

ASIC is considering applications for licences from the AXE ECN (AXE) and US-based institutional broker Liquidnet that would introduce two electronic securities platforms into the Australian financial market.

The AXE ECN, formerly known as the Australian electronic communications network, is a joint venture between New Zealand Exchange and brokerage houses Citigroup, CommSec, Goldman Sachs JBWere, Macquarie Bank and Merrill Lynch.

Both would trade in ASX-listed securities but its method of doing so and the kind of trades would differ from that of the ASX.

Bear Stearns Securities Corp would provide Liquidnet's clearing and settlement services.

ECNs are designed to be low cost, high speed platforms that separate listing from trading functions.

They are popular overeseas and competition between trading platforms is common in the United States and Europe.

"These applications represent a significant development in Australian securities markets," ASIC chairman Tony D'Aloisio said.

"They raise policy issues that our regulatory regime has not dealt with before."

In an ASIC-commissioned economic assessment of the bids, consultancy firm CRA International said the regulator needed to weigh up the upside and downside of introducing new platforms.

It said increased competition could undermine liquidity and result in inefficient pricing. It said in turn this could affect the viability of the alternative platforms.

"While competition between trading venues may foster innovation, improved services and lower trading costs, it can also undermine liquidity in existing exchanges and result in inefficient pricing outcomes," CRA said.

However, the report also said increased competition could reduce or avoid monopoly mark-ups, especially in execution and indirect trading costs.

ASIC said it has not yet formed a view about the applications.

It will consult with the Australian Competition and Consumer Commission, which will take recommendations to the Parliamentary Secretary to the Treasurer Chris Pearce.

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Julia said:

Many thanks, Ghostworld. It sounds from that as though it's by no means definite. Meantime, two directors plus CBA have sold their holdings which doesn't inspire a lot of confidence in the stock.

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reece55 said:

In my opinion, it's only going to get worse for them, because whilst volumes are up, the loss in fees from listed entities, which is based on market capitalisation (significant reduced now due to the downturn) and one off initial listing fees from floats now removed, the impact is being felt on their bottom line.

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Julia said:

Thanks, Reece. I'd overlooked the fact that their fees are based on market caps. Doesn't seem to be anything positive in their outlook.

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osmosis said:

The share price has really reflected your concern. The share price is really sliding. Where will it end?

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chilliaa said:

Does anyone have any updates on ASX?
Its starting to look, at least from my naive point of view, quite cheap?
Anyhelp appreciated.

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vishalt said:

I bought in at $35.

I'm not really worried unless it goes below $15.

The business from what I understand it is simple: the more trades, the more money made and there have been record amount of trades as investors fled from the market in the first few months.

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