Amount owed by AirAsia associates and related parties growing, translates to 60% of shareholders funds, exceeding sales those associates generate; AirAsia would have been loss-making if it were not for the transfer pricing to related parties

Financials in turbulence

Saturday, 20 June 2015


But analysts optimistic on outlook of turnaround for AirAsia associates in Indonesia and the Philippines

WHEN AirAsia Bhd released its first quarter results of its current financial year on May 28, most analyst reports the next day highlighted nothing out of the ordinary. Consensus earnings estimates were trimmed over the next few days but no alarm bells rang over the state of the low-cost carrier’s financials.

The one beef the market has with AirAsia is the money owed by its affiliates in Indonesia and the Philippines to the parent company, and that found space in a few reports. That sum is large and growing and analysts have wondered if there is going to be an impairment of those advances. But things took a turn for the worst after June 10 when little known research outfit from Hong Kong, GMT Research, came out with a 39-page report and a sell call. Continue reading


IOOF’s boiler room throws customers to the wolves

IOOF’s boiler room throws customers to the wolves

June 20, 2015 – 12:15AM

Adele Ferguson and Sarah Danckert

Insider trading, cheating and front-running – the allegations run thick and fast in the IOOF boiler room.

As Christmas parties spilled onto the side streets of Sydney’s CBD, two men from listed financial services group IOOF were not in the mood to party. One of the men, a senior equities analyst, was about to become a company whistleblower, a move that would expose another financial scandal and cost him his job.  It was Friday December 12, 2014 and the other man, the company’s head of investigations Rob Urwin, wanted to discuss a few matters before heading home. The conversation turned to some questionable behaviour inside the company, most notably its research division and some of the antics of its head of advice research Peter Hilton, so Urwin suggested the discussion continue over a beer. As they settled in at the Shirt Bar, discreetly tucked away in an alley close to the company’s Kent Street offices, topics moved from IOOF’s aggressive sales culture to some possible serious breaches in the research division, which is the engine room of IOOF’s $150 billion funds under management.

“I was pissed off yesterday,” the equities analyst told Urwin, explaining how the company’s equities team wanted to start ramping financial advisers into stock ahead of a research report being issued.  Continue reading

Tech Companies Fly High on Fantasy Accounting

Tech Companies Fly High on Fantasy Accounting

JUNE 18, 2015


Technology shares have been powering the stock market recently, outperforming the broader stock indexes by wide margins. The tech-heavy Nasdaq 100, for example, is up 19 percent over the last 12 months, almost twice as much as the Standard & Poor’s 500-stock index, which has risen 10 percent. Investor enthusiasm for all things tech is understandable, given the disruptions the industry is bringing to so many businesses and the potential profits associated with that upheaval.

But there’s a more troubling aspect of the current exuberance for technology stocks: the degree to which so many of the popular companies with premium-priced shares promote financial results and measures that exclude their actual costs of doing business. These companies, in effect, highlight performance that is based more on fantasy than on reality. Continue reading