Greater market openness needed

Published in the Geelong Advertiser, October 2011 by Dale Gillham

ASIC is well and truly in the driver's seat as regulator of the Australian share market.

So one would expect all remaining road blocks preventing a fair and transparent market place have been removed.

However, I believe there are some areas that still deserve closer scrutiny.

One area of particular importance for ordinary investors is the need for a greater degree of disclosure from market participants regarding short selling, especially in bear markets.

Few would disagree that for a market to be truly transparent all transactions must be reported, including those created and then closed out on the same day.

Currently, as is disclosed on the ASIC website, there is no responsibility on the part of ASIC to ensure all transactions are reported by market participants, or institutions, carrying out short selling activity.

What do we expect in the market?

The Australian share market made a strong start to the week on Monday with a gain of about 80 points.

But conditions quickly deteriorated as news emerged that Europe seems no closer to reaching a decision on the debt crisis.

This saw the All Ordinaries index wipe out Monday's gains before sliding lower for the rest of the week to break support at the 4200 point level.

From here it is probable the Australian share market will find support at about 4100 points, a critical level that if held could provide a launching pad for the next rise to about 4500 points.

If the market does find support here before breaking back above 4300 points, the probability of a further rise increases, and this would give us a target between 4450 to 4500 points.

Alternatively, if the market were to decline below the 4000-point level, the balance will shift back in favour of the bears and therefore further falls would be expected.