Athens Stock Exchange closes down 16% on its first day back, but the rest of Europe trades higher, ASX futures flat

After being closed for more than a month, the Greek stock market fell as much as 22.8% before closing the day down 16.23%. Banks were savaged, with the National Bank of Greece hitting its -30% daily limit and Eurobank Ergasias (which I covered a couple of months ago due to Wilbur L Ross's investment into the stock) dropping 36.62%. Greece's purchasing manager's index printed at 30.2, which is a fall from the previous level of 46.9 and illustrates how much business confidence damage was done in those last weeks of negotiating. On the flip-side, government debt default fears have eased back, with 10-year bond yields trading back below 12% from highs of 19.58% at the peak. There will be many traders tempted to trade long Greek bond positions against short German bond positions on the basis that the yield spread between the two can continue to come in and slowly march back toward lower levels; however, the question is whether we're seeing a significantly different Greece now than we were, say, back in September last year when bond yields were close to 5.5%. I suspect we are, and I suspect that bond yields will continue to trade at these levels as investors wait for the 'next' Greek event. Unfortunate, but I think inevitable. 

Today Australia has its monthly RBA interest rate policy announcement, with expectations of a 25 basis point cut sitting at just 9%. While this expectation of no change today might be sound, I suspect that changing Chinese data will keep the RBA cautious for some time to come. You'll remember that during the mining boom, readers of Australian news were consistently reminded of Australia's "two-speed economy". Well, the tables have turned - Australia certainly has a two-speed economy, with particular regard to our 'listed economy.' But rather than the resources space outpacing everything else, the opposite is now true. Third party Chinese purchasing manager index data (you'll remember this used to be supplied by HSBC, but is now supplied by Caixin) was released with a reading of 47.8, which was lower than expected and continued to put downward pressure on commodity markets.

Today's chart shows the ASX 200 cash index CFD managing to remain elevated towards the top of its three-month range, though it still has a big job on its hands in order to bust higher through the 5,700 and 5,750 selling resistance levels.


Source: Rivkin, Saxo Bank

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How to apply for the FGG IPO

As was the case with Future Generation Investment Company (FGX), Rivkin will be working with its broking partner CMC Markets in donating the broker stamping fees to charities associated with the investment company’s cause – in this case, youth mental health and homelessness.

With this in mind, we strongly urge you to follow the following steps accurately so Rivkin can add to the philanthropic nature of this IPO.

  1. Visit http://www.futuregeninvest.com.au/Global/prospectus.pdf to download and read the prospectus
  2. IMPORTANT: complete the Broker Firm Application Form on page 87 of the prospectus, this way we can donate the stamping fees
  3. Ensure you have sufficient funds in your Rivkin Securities stockbroking account to pay for the stock
  4. Enter the Broker Code 02662
  5. Enter the Adviser Code 0001
  6. Email your application to customerservice@rivkin.com.au or post it to:

Rivkin Securities FGG Offer
Po Box 1524
Double Bay 1360

Don’t have a Rivkin Securities stockbroking account? Open one now by emailing customerservice@rivkin.com.au (your Relationship Manager will call you back and pre-fill forms etc.) or phoning 1300 748 546. Our online brokerage is $11.00 or 0.11%, $9.90 or 0.11% for SMSFs that use Rivkin Super. PLUS we go the extra mile and donate non-core earnings like broking fees from this IPO to charity. You’re doing yourselves a favour and doing those in need a favour by getting involved.

This article was written by Scott Schuberg, CEO of Rivkin Securities Pty Ltd. Enquiries can be made via info@rivkin.com.au or by phoning +612 8302 3600.

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This article contains information about foreign exchange contracts, which are considered complex financial products. Please click here to read ASIC's foreign exchange trading article before considering an investment in foreign exchange contracts. 

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