UBS client in the spotlight

THE corporate watchdog is analysing the trades of a client of global investment bank UBS following last Thursday's flash spike of several blue-chip stocks.

THE corporate watchdog is analysing the trades of a client of global investment bank UBS following last Thursday's flash spike of several blue-chip stocks.

It emerged yesterday that UBS placed the initial $200 million sell order of several major ASX stocks in the 30 minutes before the sharemarket opened on Thursday. Just seconds before the market opened at 10am, that $200 million share order was revised to just $56 million.

The $144 million change caught the market napping and large fluctuations hit the share prices of ANZ, Ansell, Aristocrat, Brambles and AGL, while Commonwealth Bank and Bank of Queensland also spiked when the market opened.

The mystery trades in ANZ pushed the share price up $1.67, or 6.5 per cent, when trading began at 10am. The stock soared to $27.63 a share on the opening bell before falling back to $25.79 when the market closed.

BusinessDay believes UBS has handed over details of the client who placed the orders to the Australian Securities and Investments Commission, which is conducting inquiries.

The fact that last Thursday was the closing day for XJO Index Options - options traded on the S&P/ASX 200 Index - has raised suspicions that market manipulation was behind the spike.

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