Already a subscriber?For chief executives and institutional investors, the real business of earnings season doesn’t really get under way until well after the analyst calls, media interviews and glad-handing of results day is done.
. The chief financial officer of one of the largest companies on the ASX says that a decade ago, active fund managers accounted for about 20 per cent of his company’s share register, but that’s now about 9 per cent, and shrinking by about 1 per cent a year. “Everyone is underweight CBA, and that’s probably the right call. But it’s an uncomfortable call at the moment, and it probably will be for the next six to 12 months.”
Managers say the phenomenon, known as the incredible shrinking ASX, plays a part in this. There have been painfully few new floats in the last two years, and a spate of takeovers that have reduced investors’ options in several sectors. We’re all worried about geopolitics, about government debt levels, and about the potential for flash crashes like we had earlier this month.