On May 6 this year, the US equity markets fell dramatically and then recovered sharply in what has since become known as the ‘flash crash’. PHILIPPA YELLAND reports. In a joint report published on September 29, two US financial market regulators – the Commodity Futures Trading Commission (CFTC ) and the Securities and Exchange Commission (SEC) – identified a single order in the futures market that they claim to be the source of the unusual events observed in the stock market on this day. Instinet’s director of global trading research, Alison Crosthwait, thinks this is unlikely, but she said the incident was a warning against using algorithms that send orders based only on volume without price controls.
State Street’s China Road
Jerry Cristoforo looks and sounds like an American, which is no surprise. He is an American. But close your eyes when he’s speaking Mandarin and even a trained ear probably would not pick the difference with the real, Chinese, thing. He seems to get the complex intonations right, which foreigners find very difficult. Furthermore, he can read and write characters, although not yet to the standards he would like. This is because he works at it. After 25 years since he first went to China for a stint as a lecturer in computer science, he still gets more than 12 hours a week of coaching. He’s learnt that Chinese characters tend to tell a story in themselves. One group of four characters, for instance, Cristoforo explains, is of a snake with feet.
State Street's China Road
Jerry Cristoforo looks and sounds like an American, which is no surprise. He is an American. But close your eyes when he’s speaking Mandarin and even a trained ear probably would not pick the difference with the real, Chinese, thing. He seems to get the complex intonations right, which foreigners find very difficult. Furthermore, he can read and write characters, although not yet to the standards he would like. This is because he works at it. After 25 years since he first went to China for a stint as a lecturer in computer science, he still gets more than 12 hours a week of coaching. He’s learnt that Chinese characters tend to tell a story in themselves. One group of four characters, for instance, Cristoforo explains, is of a snake with feet.
Fund raters fight for survival
Funds ratings agencies emerged from the global financial crisis with a better reputation than credit ratings agencies – but not by much. Glowing reports on products which subsequently blew up – from Astarra Strategic to the Basis Capital Yield Alpha Fund – have been stored away in the bottom drawer by aggrieved financial planners, to be taken out again when the inevitable class actions emerge. As those planners tighten their belts, the pressures on funds raters would appear to be rising as well, with at least one dealer group chief predicting that only a couple of big global players would be able to survive in the Australian market. MICHAEL BAILEY reports.
At last, the industry spotlights insurance claims
For a long time now, the group insurance industry has been focussed on the purchasing of policies. The announcement of a new contract invariably trumpets a new, much higher, automatic acceptance level. Pride is taken in a more simplified underwriting process, which allows members to go on-line and apply for extra units of cover in seconds.
How super funds can improve capital markets – and boost returns
The Paul Woolley Centre for the Study of Capital Market Dysfunctionality was scheduled to hold its annual conference at the affiliated University of Technology Sydney late last month. GREG BRIGHT reports on the latest thoughts of founder Paul Woolley – who has proposed a series of remedies for what he sees as the major problems associated with markets.
Surviving micro-caps’ booms and busts
There are no short cuts for micro-cap equity managers. With no obvious risk positions available, they must dig for new information on underresearched stocks to find buying opportunities while keeping an eye on macroeconomic developments that could overwhelm these positions. Their investors must also have the guts to weather the notoriously volatile sector. PHILIPPA YELLAND reports.
Surviving micro-caps’ booms and busts
There are no short cuts for micro-cap equity managers. With no obvious risk positions available, they must dig for new information on underresearched stocks to find buying opportunities while keeping an eye on macroeconomic developments that could overwhelm these positions. Their investors must also have the guts to weather the notoriously volatile sector. PHILIPPA YELLAND reports.
Village life: more than bricks and mortar
Some investors in retirement villages suffered heavy losses during the financial crisis – primarily because they misunderstood the growth dynamics and needs of the market. As institutions again eye this sector with interest, they are refining their approach. SIMON MUMME and PHILIPPA YELLAND report. Pipe Dreams – How Profits and Public Policy Build Australia
Australia’s infrastructure needs are vast, and private investors are negotiating new ways of developing these nation-building assets with governments. Risk is being redistributed, and the sustainability of the current bidding process for greenfield projects is under interrogation. Investment Magazine uncovers the profit and policy interests underpinning new Australian infrastructure. 
