Australian Shares, News

ASX 200 Climbs Despite Royal Commission Into Bank Advice

The S&P/ASX 200 (INDEXASX: XJO) (^AXJO) and All Ordinaries (INDEXASX: XAO)(^AORD) indices ended slightly higher on Monday as the majority of ASX bank shares moved into positive territory.

All Ordinaries: up 0.1% at 5,933 points

ASX 200: up 0.2% at 5,841 points

ASX Movers

  • BHP Billiton Limited (ASX: BHP) – up 0.8%
  • Telstra Corporation Ltd (ASX: TLS) – up 0.6%
  • Netwealth Ltd (ASX: NWL) – up 4%

ASX Losers

  • Commonwealth Bank of Australia (ASX: CBA) – down 0.7%
  • Blue Sky Alternative Investments Limited (ASX: BLA) – down 22%
  • Perpetual Ltd (ASX: PPT) – down 5.4%

Australian Investing News

In the ASX 200, big bank shares ended mostly in positive territory despite the Royal Commission’s investigation into misconduct in the financial advice industry. Through their wealth management units, the big four banks control a large chunk of the financial advisory market.

Read: “Royal Commission Takes Aim At CBA, AMP, Westpac, NAB and ANZ’s Financial Advice”

The latest round of Royal Commission hearings are targeting issues which have directly affected Aussies who try to get financial advice, “including the charging of fees for financial advice that is not provided or not provided in full,” Counsel assisting Rowena Orr, QC said.

Making headlines again was Blue Sky Alternative Investments Limited, the investment company which recently found itself as a target of a well-known overseas short-selling firm. Short sellers make money when share prices fall.

After a back-and-forth between the short seller, Glaucus Research Group, and the ASX-listed Blue Sky, Blue Sky today provided a market update to its investors via the share market and a teleconference. The update included a profit downgrade.

Despite rebutting Glaucus’ allegations, Blue Sky today announced that it will conduct an “independent review” into its business processes and financial reporting.

“We have listened to the market feedback and it is clear that Blue Sky has fallen short of market and shareholder expectations around transparency and disclosure,” Chairman John Kain said.

“We are committed to making changes which will improve the business, provide greater transparency and improve shareholder value over the long term.”

Given the recent accusations, Blue Sky said profit would be lower than expected. It said its underlying profit expectation for its 2018 financial year has been reduced from between $34 million and $36 million to between $20 million and $25 million — more than 30% less.

“We will update shareholders in due course on progress of the review and the expected date of completion,” Kain added.

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