Market turnover hits record

Published in the Herald Sun, July 2013 by Karina Barrymore 

Investors traded harder and faster during June than ever before.

There was a massive 41 per cent increase in daily trading volume on the Australian Securities Exchange (ASX) and a 17 per cent jump in the average daily value, compared with a year ago.

The latest monthly activity report from the ASX, released yesterday, found there was almost 1 million trades a day during June a record for the final month of any financial year with a daily trading value of $4.84 billion.

While June was a record month, the full financial year had a split result with a record number of trades but the value was still well below the peak, prior to the financial crisis.

ASX spokesman Matthew Gibbs said there were 174.75 million trades on the exchange during the year to June, up 5 per cent on the previous year.

By dollar value, however, the result has hit a new low, following steady declines in the value of trades since the crisis.

ASX trading value:

  • 2013 $1046b 
  • 2012 $1185b 
  • 2011 $1339b 
  • 2010 $1359b 
  • 2009 $1129b 
  • 2008 $1616b 

Trading turnover on the ASX was $1045 billion this financial year, down 12 per cent from last year and still significantly below the $1.616 billion in June 2008, prior to the crisis.

Volumes are up because of high frequency trading, which is where institutions are buying and selling shares within milliseconds to make fast short term profits, Wealth Within fund manager Dale Gillham said.

High frequency is not about investing it’s about making very quick profits and this also explains why the value is down.

The value of trades is expected to take several years before it regains the level of previous years, Mr. Gillham said. 

We are still anywhere between two and four years away before values get back up and that’s mainly because investors are still not confident about our market and world markets.

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