THOSE canny punters who bid up the sharemarket in the quarter hour before the Reserve Bank opted for its second consecutive interest rate cut yesterday might end up double losers.
Not only did shares spiral down by some 35 points in the next hour, which would suggest a loss on the trading, but the anomalous spike will no doubt have the corporate coppers running their algorithms over the activity to see if it was all above board.
The intriguing thing is that, on conventional economic theory, the 15 point run-up in the S&P/ASX200 that began 15 minutes before the official announcement of the RBA's decision, was exactly the right outcome if you knew rates were being cut.
Traditionally, shares move up when interest rates are lowered because the yield on stocks becomes more attractive. Of course, things are more complicated than that these days and the decision to drop rates indicates how anxious the Reserve Bank governors are about the level of economic activity with half of Europe in intensive care.
And inevitably, the impact differs depending on where a company does its business, in sectoral terms.
Still, there is little doubt that the Australian Securities and Investments Commission's interest may be piqued enough to examine whether those who bought were doing it on the balance of probabilities, or were better informed than everyone else.
What's in a name, Grag?
DID Grug slip some grog into Grag?
The Australian Chamber of Commerce and Industry economics chief Greg Evans was quick on the draw with a gratuitous media release in the wake of the Reserve Bank cutting interest rates.
The subject was a perfect match for lobby group ACCI, enabling Evans to urge banks to be quick about passing on some Christmas cheer with a full 0.25 percentage point cut, rather than the lag of up to two weeks after the last cut on Melbourne Cup day.
"This is unacceptable and should not be repeated as it is frustrating the intention of the Reserve Bank in helping out weaker areas of the economy," Evans thundered in his media release.
"The banks should not be backsliding on this, thinking the lack of focus and visibility in this area allows them the comfort of delay and inaction."
Evans was saved being accused of delay and inaction by quickly pumping out a second version of his announcement that did not call him "Grag Evans".
Mining's quiet deals
NATHAN Tinkler's marriage proposal to Whitehaven Coal may not be the only resources deal of scale this week. Word is there is another, with the added frequent buyer points of having an Asian connection that may see the light of day before week's end.
Tinkler's Aston Resources and Whitehaven were outed earlier this week as having re-opened talks on what could become a $5 billion merger of the two companies with big plans for the Gunnedah Basin in New South Wales.
Aston and Whitehaven reportedly discussed a deal last year, not long before Aston opted instead to list. The float was enormously successful for investors until Tinkler last month killed the share price by ousting the company's chairman, chief executive and chief financial officer. The coup at Aston followed a similar boardroom move at Coalworks by Tinkler only a week earlier.
Aston dropped from $11 to as low as $8.26 last Wednesday, in the wake of the management changes, before the shares inexplicably put in a jump in price and volume well before the talks became public.
Whitehaven shares also climbed 6 per cent and volume accelerated on Thursday and Friday last week.
To date there is no sign that the ASX had queried either company before their confessions on Monday after the announcement, although that does not preclude the trading being referred to the corporate watchdog for a closer look.
That Tinkler is contemplating a merger deal at this time is fascinating, given that his private companies have been carrying out a debt renegotiation involving prominent offshore supporters and shareholders. The debt juggle coincided with an aborted plan for the $200 million float of another Tinkler vehicle, Boardwalk Resources.
Parking firm on the move
NEW investors in former Computershare chief Chris Morris' new vehicle, Car Parking Technologies, will have been pleased to see their shares close at a premium on the first day.
Lead manager of the $15 million placement, E.L. & C. Baillieu, wrapped up the first stage of the deal on Monday, allowing CPT to re-list yesterday morning.
The issue was priced at 30?, compared with CPT's last trade on Thursday of 35?, and the shares finished at 31.5?.
CPT, which has its headquarters in New Zealand and is buying a business in Britain, also said that its directors would seek shareholder approval to participate in the share placement.
The issue of 50 million shares has been split in two to allow for the fact that only 22 million shares could be issued within the rule that allows a company to place 15 per cent of its stock without shareholder sanction. CPT is yet to name a date for its shareholder meeting to get that tick.
The money is intended to pay for the cash component and expansion of its $13.6 million acquisition of Town & City Parking, which is the largest parking company in Britain, specialising in shopping centre car parks.
CPT had to make a $3.05 million downpayment on the business, with another similar amount due in 12 months as part of the earn-out arrangements.
While Australian shoppers might not like the idea, CPT's technology can capture licence plate numbers and automatically monitor when a vehicle overstays its welcome in a parking bay sending electronic notification to traffic wardens and even issuing infringement notices.
CPT was already working with the British group to install that technology, but thinks that it can dramatically improve the performance of Town & City, and its own profitability, by owning the business and more rapidly deploying its technology among its 1100 car parks across Britain.
[ASIC's] interest may be piqued enough to examine whether those who bought were doing it on the balance of probabilities, or were better informed than everyone else.