Thursday, 20 November 2008

Bailing rapidly, but the boat is still sinking

The Australian market followed the US lead and dropped another 4.5% today. It's now declined by more than 50% in the past year, dropping to levels last seen 4.5 years ago. Although my three margin lending accounts hadn't quite gone into the "buffer" zone (100%-105% margin utilisation), it was time to bite the bullet and start selling some of my stocks. From my Comsec account I sold my ASX shares (around $8K worth). They have dropped by a similar amount to the overall market (around 50%), but I doubt that they will recover as much as other stocks when things start to improve. The current bear market will have scared a lot of "mum and dad" investors and day traders out of the stock market for quite a while, which will impact on ASX trading volumes and profitability for years to come.

Recent Trades:
Sell ASX .20 Nov 2008 ..200 @ $29.734
Buy. IANG 18 Nov 2008 ...90 @ $77.000
Sell LDW .17 Nov 2008 1,350 @ .$2.500
Sell BBW .17 Nov 2008 1,782 @ .$0.820
Sell THG .17 Nov 2008 4,000 @ .$0.580

Out of my Leveraged Equities account I sold off the rather large block of Telstra (TLS) shares I had built up from the T1 float and the T3 float (I fortunately didn't buy into the T2 tranche as it was way overpriced). That will realise around $40K which will improve my overall margin utilisation in that account (since the margin value of the TLS shares was around $32K). I also took the opportunity to sell off $1,000 worth of miscellaneous Babcock and Brown infrastructure trust stocks, which I'd wound up with after a takeover:

Trades:
Sell BBI ...Babcock & Brown Infr 25/11/2008 ...222 $0.04 .....-$8.21
Sell BBP ...Babcock&Brown Power 25/11/2008 ...197 $0.04 .....-$6.90
Sell BBW ...Babcock & Brown Wind 25/11/2008 .1,241 $0.77 ...-$889.57
Sell BEPPA .Bbi Eps Limited .....25/11/2008 ...472 $0.10 ....-$47.67
Sell TLS ...Telstra Corp .......25/11/2008 10,200 $3.98 -$40,149.44


After the market drop and these stock sales my accounts margin utilisation currently stands as follows:

Comsec Margin Lending
...Loan:................ $107,752.98
...Portfolio Value:..... $197,079.95
...Margin Value:........ $110,578.33
...Margin Utilisation:........ 97.44%

Leveraged Equities
...Loan:................ $170,473.54
...Portfolio Value:..... $178,075.27
...Margin Value:........ $138,921.53
...Pending sale proceeds: $41,101.79
...Margin Utilisation:........ 93.13%


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1 comment:

William said...

Sorry to hear about your margin call situation and having to sell your stock. No doubt its for the best as its hard to tell how far this market will fall.