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so “ what is this opes prime fall out all about  “

THE collapse of Opes Prime will wreak havoc on the small to mid-cap sector over the next couple of weeks as its main creditors, ANZ Bank and Merrill Lynch, retrieve their money by liquidating a $1.5 billion portfolio of Australian shares filled with stocks, including ABC Learning Centres, Allco, Clive Peeters, Hedley Group and Just Group.

 The opes prime website  >

http://www.opesprime.com.au/

FALLOUT from the first collapse of an Australian stockbroker in a decade will hang over financial markets today, as the banks behind Opes Prime order the sale of more shares in an effort to recover $1 billion in loans to the failed business.

Federal Treasurer Wayne Swan says he does not think the market will be adversely affected by the collapse of stockbroking firm Opes Prime.

Mr Swan met this morning with the Australian Securities and Investments Commission (ASIC) after the firm’s collapse.

The Melbourne-based company has gone into receivership and is being investigated by the commission.

Administrators were called in Thursday night after cash and stock movement irregularities. 

About Opes Prime

Opes Prime Group Ltd is an Australian unlisted public company providing a range of financial services and products for high net worth individuals, stockbrokers and financial advisors, asset managers, banks and other firms, both for themselves and their clients.

Group conducts business via a number of operating subsidiaries based in Melbourne, Sydney and Singapore.

Opes Prime Stockbroking Limited is a full Market Participant of the Australian Stock Exchange Ltd, and holds an Australian Financial Services Licence (#247408) which enables it to deal and advise in financial services and products to retail and wholesale clients. The company was first registered on 10 March 1999, and started business with its current shareholders in 2005.

Administrators were appointed to Opes Prime on Thursday night and, before the market opened on Friday, ANZ and Merrill Lynch had wasted no time dumping stocks at massive discounts.

The result: at least four companies were placed in a trading halt as a result of the collapse.

These include Admirality Resources, Hedley Leisure, manufacturer Austin Group and Reco Financial Services.

Not surprisingly, Reco went into a trading halt. The Australian reported three weeks ago that Opes Prime was using Reco for a backdoor listing on to the ASX, which would have valued the company at $100 million.

The Australian Securities and Investments Commission (ASIC) has formed a special team to investigate whether the activities of Opes Prime Group were in breach of the Corporations Act.

Late last week directors of the financial services firm appointed John Lindholm of Ferrier Hodgson as voluntary administrator.

The administrator was called in when Opes Prime Group directors became aware of a number of cash and stock movement irregularities in relation to a small number of accounts. 

As a result of shortfalls in the accounts the directors felt that trading operations should cease. 

The company’s secured creditor ANZ has appointed Deloitte Corporate Reorganisation Group members Sal Algeri and Chris Campbell as receivers and managers of Opes Prime Group Ltd, Opes Prime Stockbroking Ltd, Leveraged Capital Pty Ltd and Hawkswood Investments Pty Ltd.

The receivers have taken steps in conjunction with the Australian Securities Exchange to suspend all on market trading activity of both Opes Prime Stockbroking and Leverage Capital. 

Opes Prime specialised in small to mid-cap stocks so most of the securities lending it did was in the less liquid end of the sector, where most damage can be caused when hedge funds short the stock. This will add to the volatility in the stock market and no doubt trigger more margin calls on these types of stocks.

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IS THE AUTRALIAN STOCK MARKE SLIDE OVER ?

HAS THE MARKET FREE FALL ENDED ?

HAS THE MARKET REACHED THE BOTTOM ?

HAS THE SUBPRIME FALLOUTS ENDED ?

THE Australian share market managed this week its largest gain since last August, despite another poor lead from Wall Street.After the  constant rout in the shares from the  past few months  there has been no letting go in the constant downturn in stock prices.

But now that the GOLD and OIL prices have also risen sharply  to dizzying heights  and finally crashing down . Is this a sign that  the bottom of the market has reached.

Well my personal point of view is that the market  has reached the bottom , but there will still be a few minor  dips on its climb up to a more  stable Market level that is not overpriced like it was before the market crashed with the sub-prime crisis. 

Another session of US equity losses and fears about the US banking sector and the news of the Australian financial services group Opes Prime going into receivership did little for local banks, but resource stocks surged.
CMC Markets senior dealer Matt Lewis said the big weight on the local bourse was the finance sector, which followed banks in the US downwards.
Leading US banks fell overnight on speculation that Lehman Brothers faced funding shortages. Lehman said the speculation was unfounded.

National Australian Bank Limited (NAB) said it expects an after-tax gain of approximately $221 million from its shareholding in Visa Inc, following its IPO on the NYSE. The majority of the gain will be offset through the creation of a one-off central bad and doubtful debt provision against the current uncertain global economic environment.

INVESTORS could lose hundreds of million of dollars following the shock collapse of Melbourne finance house Opes Prime.

The corporate watchdog, which has launched a special investigation into the company’s affairs, is believed to have won a court order preventing the company’s chief executive Lirim Emini leaving the country.
It is believed Australian Securities and Investment Commission investigators want to speak to Mr Emini, whose whereabouts were unknown last night.
The company’s biggest creditor, ANZ Bank, yesterday seized shares worth about $1 billion and appointed a receiver who took control of Opes Prime’s offices in Collins Street.
Accountants Deloitte said yesterday there were a number of cash and stock movement "irregularities in relation to a small number of accounts".
"The shortfalls in these accounts led the directors to believe the trading operations could not continue," it said in a statement.
It added that all client accounts had been frozen.

The outlook remains buoyant: we are in for a generation of economic expansion, led by China with India and other developing countries following. This is unstoppable textbook economic growth on a scale not seen before. There are bound to be humps and bumps along the way – and we may be going through one right now. But the sands of time will inevitably wash over this temporary correction.

However we are not completely immune of course to volatile credit and securities markets – you have to ensure you have the right short term strategies – ‘double-taking’ on investment decisions, shoring up credit lines, communicating with customers, suppliers and all stakeholders, and particularly employees. Equally you also have to be on the front foot, looking for opportunities out there – acquisition, joint venture, farm-ins – where other companies may be under pressure from the markets and need support.

Australia’s housing affordability crisis is expected to dramatically worsen during the next five years, with property prices forecast to rise by as much as 40 per cent.

Economic forecaster BIS Shrapnel says housing affordability, already at record lows, will decline even further in the years ahead as demand continues to outstrip supply.

BIS Shrapnel director and chief economist Frank Gelber said an annual construction shortfall of 30,000 dwellings was set to double to 60,000 by June this year and rise to 129,000 by June 2009.

The shortfall in supply will put further upward pressure on rents and house prices, further exacerbating the affordability problem caused by the house price boom of 2002-03.

At that time, official interest rates were at 4.25 per cent but have since risen to a 12-year high of 7.25 per cent.Mr Gelber says the current environment of rising interest rates has compounded the problem, with people choosing to wait before buying or building property.

This also meant that when interest rates stopped rising or eventually started to fall, there would likely be a surge in demand for housing which could result in another price explosion.

"We’ve got rising interest rates suppressing any upswing in demand for housing … and we need to wait now before that demand comes through,"

"But when it does, it will be very strong."

Calculations, based on the ABS established house price index, show that during the 10 years to December 2007, house prices rose an average of 9.9 per cent a year. The index rose 12.3 per cent in 2007.

In the 10 years before that, house prices rose an average six per cent a year.

In the past 20 years they have risen an average 7.9 per cent a year.

In the short term, higher interest rates meant the housing shortage was probably going to become more acute before starts to turn around.

"But if you’re looking at it from a medium-term perspective where there are national housing policies on the table that in time will boost the supply of housing, then we would hope that by the end of this decade … we would be reducing some of the upward pressure on established house prices."