The big story yesterday was the remarkable (or maybe obvious) performance of Platinum Asset Management as the company listed on the Australian Securities Exchange for the first time. With an IPO price of $5, and plenty of interest from retail and institutional investors, it was no real surprise that the company’s share price added 76% to close yesterday at $8.80 per share.
This apparently saw Platinum’s founder Kerr Neilson shoot straight up to fourth position on Australia’s rich list with an estimated wealth of $3.3 billion.
We say that it probably wasn’t surprising given that only 25% of the company was being publicly traded, the rest being split between Mr. Neilson, Platinum employees and other long term investors.
And with Platinum sure to enter the S&P/ASX indices there is bound to be additional buying up of shares by fund mangers who need to weight their portfolios according to the components of these indices. We wouldn’t be surprised to see this share add on even more over the next few weeks.
The other item we noticed this morning were the comments from Old Man Greenspan who is never shy about spouting forth his opinions on all and sundry now that he has joined the ranks of small business owners with his ‘consulting’ firm.
Speaking at a Madrid conference, Greenspan said the growth in the Chinese economy was “clearly unsustainable, there’s going to be a dramatic contraction at some point.”
How about that!? Thanks for telling us something that we couldn’t have worked out for ourselves. Is there really anyone alive anywhere in the world that doesn’t believe “there’s going to be a dramatic contraction at some point.”
We hope that conference goers didn’t shell out too much for that pearl of wisdom. It would have been far more interesting if OMG could have told us when this contraction will occur. The only problem with that of course is that he has as much idea as we do.
In other words no idea whatsoever. You don’t have to be an ex-Federal Reserve banker to put two and two together to make four.
He went on to say, “In the last five years, the world as a whole is a growing faster than at any time in the world’s history. It can’t last and it won’t last because it’s a one-shot adjustment.” Again, not the sort of comment that is going to win any Nobel Prizes in the foreseeable future.
It is pleasing to see that despite his retirement from the Fed he has lost none of his ability to either confuse the market or state the bleeding obvious.
for The Daily Reckoning Australia