BANKERS are, at times, a sensitive lot. A number of choice adjectives have been used to describe the ASX's decision to grant WAM Capital a two-day trading halt to allow it to sell just 8.3 million shares on the new ASX BookBuild facility.
"It smells," was the view of one banker, with the ASX's new facility threatening his business by charging companies just $25,000 to raise money. But that's not the point, says the banker, eager to vent his spleen.
The ASX typically does not grant trading halts for small capital raisings that would not be material to the share price. Such deals have to be done after the market closes and completed before trading begins the next day.
That's because trading halts are issuer friendly, not investor friendly. Trading halts deprive investors of liquidity, and some stock exchanges, such as those in Britain and Canada, prohibit trading halts.
"The ASX clearly has a commercial interest with its new book-build facility but, as the market policemen, you can't have two sets of rules," says one banker, perhaps not surprisingly requesting anonymity. "It's a little bit galling they are doing something that contravenes their own guidelines but is in their own commercial interest."
Ouch. Of course, the flipside is that to many the ASX BookBuild innovation makes IPOs much more transparent, as well as cheaper. And the banks are losing something of a cartel.
Let the competition, and games, begin.