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bohdan
07-02-2009, 03:29 PM
Greetings,
A question regarding trading ASX shares... I've traded plenty on the NZX (via asb internet service) and apparently I can trade ASX using ASB also - but, is there anything else I need to setup in order to actually do so? E.g. I have a CSN / FIN in NZ, do I need something similar for Ozzy? That kind of thing.

Thanks
Kevin.

tobo
24-02-2009, 08:32 PM
I trade on ASX with ASB Securities.

Yes, to make it practical you want to ask them to set up an Ausi Dollar account for you.

But the other thing you need is to sign up with ASB for them (or Commonwealth Securities actually) to be your "CHESS Sponsor".

Weird wording for a simple idea.
In Australia, instead of you just having one CSN-type number, you get a different number for each stock if you own them direct.
You avoid all that by ASB acting for you and they just give you one ID number for all your ASX stocks, called your HIN (Holder's ID No.).
Operating this way is mandatory with ASB if you want to trade on the internet.

So call them up and tell 'em you want to trade ASX and you want a AUD foreign Currency Account, and to set up the CHESS sponsorship agreement.

btw, they are a bit funny about precise wording of the AUD account. It is not a Cash Management Account in Ausi $, but is simply an AUD account. You replenish it by putting $ in your NZD Cash Management Account and then ringing them to do the exchange. I tend to leave $ in that account from when I sell, and then buy with that money, not transfering it back and forth NZD-AUD...
If you have insufficient AUD when a buy goes through it will still proceed if there in enough in your NZD CMM. They will ring you either then or when settlent is due and require an AUD purchase at the exchange rate relevant at that moment. They don't like doing it that way because you have no choice but to accept the FX rate. (As if you get any choice when you are buying AUD in advance. Their logic is that if the FX rate is realy bad, you could simply decide not to proceed, and not buy the shares you had your heart set on after all. I think this is bogus because I wouldn't be buying stocks if the make-or-break was so slim it depended on exchange rate being 'just so')

Lego_Man
26-02-2009, 03:16 PM
What are the fees etc on having an AUD account?

Also what margin do they take on the FX deal?

POSSUM THE CAT
26-02-2009, 03:28 PM
Lego Man if you go to Direct Broking's web site there is a reasonable explanation of settling in NZ dollar costs and if you use the Macquarie Cash Management Trust that is associated with Direct Broking there are advantages in dealing with Australian rights offers etc as most let you pay by B/Pay and this can be done up to the day before closing without the hassle of having to get foreign currency cheques or drafts and get them there by post by the appropiate date. You can also have an Austraian cheque book if you want it as well There are no fees for this except for cheque duty for the australian govt. if you take the cheque book offer pays reasonable interest as well

tobo
26-02-2009, 08:47 PM
On the one hand -
Possum's suggestion including a cheque book certainay avoids $22 fee each time to get a AUD cheque for Rights Issues and the like
On the other hand -
most transactions are not Rights Issues but just trading through your (internet) broker.

Here is correspondence I had last week with Direct Broking, and their answers. It pretty much put me off them, as it seems easier to use ASB Securities which you can have an AUD account direct with.

1) In order to trade ASX equities, your website states I must have an AUD bank account in an AUSTRALIAN bank.

I currently have an AUD account with ASB which I use to trade with ASB Securities.
Direct Broking answer:
1) You do not need to have an AUD bank account to settle ASX trades. If you settle a trade in New Zealand currency, an FX conversion would take place – see http://www.directbroking.co.nz/directtrade/static/ourrates.aspx#Fm5 for the relevant charges regarding this.
[and I checked this - it says exchange rate is mid-rate less 1.5% , versus ASB more like under 1%)


2) Your FAQ further makes a statement about settlement transfers - that "These are costly for you"

It seems almost as if you are trying to warn applicants off using this approach.

Can I confirm that I have understood correctly that you are warning applicants that this approach is expensive, and that I should check all the banks in Australia to ensure I obtain the best rates. (Essentially you are brokers, not bankers, and have no involvement with the FX aspect of FCY payments.)
Direct Broking answer:
2) The statement regarding the costs of inter-bank settlements is to notify you that all charges incurred by Direct Broking for that process will be passed on, and the amount can vary between banks.

3) if I do not have an AUD account with you, how do you get paid when I make a purchase. That is, what do I do? (especially when I may not notice my trade has occured until you advise me, perhaps because of a low bid that I may have had in the queue for weeks). Eg. do I manually do an electronic cash transfer from my AUD account 3 days after the trade? Or, heaven forbid, write a physical cheque?
Direct Broking answer:
3) If you wish to settle trades in AUD, and do not wish to set up an AUD account with us, you would need to pay for the order in advance. You can do this by either mailing in a cheque, or crediting our account. The number is 013006 837770859 and the SWIFT is ANZBNZ22. You can contact Lynn Hassell at Direct Broking for more information on this.
[What, pay in ADVANCE? I may change my mind at the last minute an not buy something after all, or the price might be moving before my eyes, or I might put a order in that sits for 2 weeks before being traded]

Please confirm my understanding that I will not be able to use that for Direct Broking trades, and that an ASB account will not work for you, and that I will have to set up an AUD account not with ASB but with CBA or ANZ etc in Australia.
Direct Broking did not answer this. (I guess I made the mistake of not calling it 'question no. 4')

Being used to ASB systems, maybe I think Direct Broking sounds more complicated than it actually is, and it is just a perception thing. But something I do know is : if you having trouble understanding something, it's a good clue that you might not make a quality decision.

Just my interpretation, Tobo

dragonz
27-02-2009, 07:16 AM
I use Dirct Broking for my NZ trades. For lowest fees ($30) it is best to set up a call account.

Australian trades are expensive and you really need to set up a Mcquarie Account with them otherwise your paying about $50 per $1000 in the NZ/AUS conversion per trade. Its a rip off really and an extra revenue stream for Direct Broking but ASB does it as well.

Far better to set up a seperate account with CMC for your Australian trades.
@ $20 per trade compared to $40 with Direct. As I make up to 10 trades a week I have found this to be the most cost efficient way.

I find Direct Broking an excellant broking firm but just a bit expensive for trading on the Australian exchange for a fledgling day trader such as myself.

POSSUM THE CAT
27-02-2009, 09:59 AM
Dragonz how big are your trades as I only $29.00 and as for foreign exchange I get a better deal of them than a bank as a bank has a fee on top of the exchange rate margin.

POSSUM THE CAT
27-02-2009, 10:09 AM
Tobo ASB would say exactly the same thing if you want to deal from another bank IE ANZ (Just that at the moment you have ASB accounts) Most on line brokers require you have enough money in your account to pay for the trade Or they charge you a different brokerage rate. Some have a minimum brokerage for this sort of Trade of $90.00

dragonz
27-02-2009, 01:06 PM
see here for Direct Broking rates

https://www.directbroking.co.nz/DirectTrade/static/ourrates.aspx



and here for CMC rates


http://www.cmcmarkets.com.au/stockbroking/content/rates_fees/index.jsp

POSSUM THE CAT
27-02-2009, 02:47 PM
Dragonz You want to compare Apples with Apples you are comparing The online CMC rates with the telephone rates from Direct Broking On line rates ffor DB are $29.00 up to $30000.00 Also Check the Possible Interest difference in the call accounts depending on the balances

JulianG
27-02-2009, 03:44 PM
Hi all

Feedback noted, thanks.

Yes we are more expensive for Australian trades than most Australian brokers. That is because the volumes of trades they receive from their citizens is much larger than we receive from ours. E*Trade puts through more trades in a day on the ASX than the entire number of NZX trades in a month. Broking firms are largely fixed cost scalable businesses so that explains the difference.

However, we are the cheapest in NZ for your purposes. We are a discount broker so you will receive discount choice. So no, we won't let our competitor clip the ticket on interest while you transact through us for the best brokerage rate. We'd like to make some money somewhere, as has been pointed out.

The FX is up to 1.5%. We charge the fairest rate of the day and rarely charge 1.5%, normally about 0.4% as many customers will testify. It is there to ensure we don't lose on volitility.

So Tobo if our honesty disturbs you it is because we are not playing smokes and muirrors. What you see is what you get. Nothing hidden. If you want more you will have to pay more. Our promise remains the cheapest brokerage in NZ.

POSSUM THE CAT
27-02-2009, 04:02 PM
Julian Have A read of some of the conditions on those cheaper brokerage accounts like having large $ amounts in highly uncompetitive call accounts or an account maintence fee if you did not put through enough trades. For years as an investor rather than a trader it was cheaper to trade through a NZ online broker than an Australian broker. Some had $80.00 minimum brokerage. Have a look at the interest rates on CMC website compared With your Macquarie and does not seem to have the B/PAY or cheque book facility.

JulianG
27-02-2009, 04:07 PM
Yow, thanks I will. It's always in the small print isn't it.

Brut
27-02-2009, 04:16 PM
I have both ASB Securities a/c in my business name & Directbroking a/c in my personal name as I'm a trader I trade in both accounts.

Directbroking is cheaper to trade, the cost is $29 for up to $30k. ASB Securities are much more expensive. I brought 20,000 NZO @ $1.20 ($24k) this week & was charged $72. I trade alot so this makes a big difference to me.

My only complaint with Directbroking is that when you place an order to buy or sell it takes about 3 - 5 mins for the order to get processed (where ASB is instant). I'm not sure why it takes so long with Directbroking but it's fustrating especially when the price has moved (up or down)

George
28-02-2009, 07:40 AM
ASB are also slow, daytrading through NZ firms is a waste of time
but can work for or against you.
Yesterday, sold TEL shares at break even as don't want the divvie
and thought they might run up a bit but not so.
Normal trading stops at 4.45 and you can only place limit orders so put
mine at 2.40 (last bid at 2.39) and if I missed so be it.
Guy rings me to say I had not changed my address so trade would
not proceed but could only get 2.38 anyway so I said that would do.
A few minutes later he says I was in luck as shares had traded
at 2.42. As I said, try daytrading with crap like that.

Daytraders could transfer money to a broker like Traderdealer
in Australia who have 12 trades on each note for one price of $30.
So $60NZ for 12 buys and sells on each stock or warrant (incl. puts).
This is not necessarily an advantage as one could trade more
by impulse than reason but the option is there.
But you need 16 trades each month so you don't get another
$40 or $80 for use of the Iress platform etc.
Aussie trades through an ASB AUD account can trade instantly but not
NZ ones so you could daytrade Aus stocks but at min $30
each trade.
George

tobo
28-02-2009, 09:14 AM
Possum, thanks, I understand your point about extra fees whenever transacting between any bank and a broker. It occurred to me that ASB Securities had an advantage in that they could deal with themselves since they are a bank too, and thus I avoid the external transaction.

Regarding brokerage rates, I find it rather a concern that you are not always going to know how good a rate you are getting (speaking as a retail part-time investor with no Reuters screens surrounding me), so I had not realised that a worse rate might apply if I have insufficient AUD in my account and they take it out of my CMA. Thanks for the heads-up.

Julian, honesty is good, thanks for the clarification on FX rates.

Brut, my trades are mostly under $10k so $30 is the fee for ASB and $29.95 is the fee for Direct Broking. But i had forgotten about the Direct Broking fee going right up to $30k (versus $10k ASB) so that might become important if I get wealthier (had a slight stumble as I started my learning and buying in the dying months of the 2007 boom and thought those conditions were 'normal')

ToBo
I am finding this thread very helpful. Thanks to all.

tobo
28-02-2009, 09:30 AM
...
...Aussie trades through an ASB AUD account can trade instantly but not
NZ ones so you could daytrade Aus stocks but at min $30
each trade.
George

Oh, so THAT'S whats going on.
Most of my (ASB) trades are Ausi. Some NZX.
I have noticed that mostly my trades are immediate but occaissionally up to 3-5minutes delayed.
It had not occurred to me to watch if it was the NZ ones that were slower.
Yesturday I bought CUE on ASX at a limit price. The time it took to refresh the webpage (on fast broadband*) from placing the order to looking at the depth...and my trade had already gone through. (I thought at the time "no human must have been involved, that transaction must have been computerised".)
Obviously buy is different from sell (as they must make sure you are not selling something you don't own. Can't have any accidental short-selling stuff can we?)

* yeah, I know, there's no such thing as fast broadband in NZ. I did it from work in Auckland CBD, we have fastest connection I have seen in NZ. Much faster than my home broadband, which itself is supposed to be Vodafone's premium "Red" network.

ToBo

POSSUM THE CAT
28-02-2009, 11:20 AM
Tobo I have Australian bank accounts and to transfer money to NZ I transfer to Macquarie Cash management account with Direct Broking and get DB to pay it into my NZ accounts This way I get wholesale exchange rates. Rather than retail exchange rates and do not have to pay a bank fee at each end of the transaction. Also if you place an ASX order with Direct Broking with settlement in NZ dollars the order screen gives you the estimated price in NZ dollars and you can cancel if you do not like it. Are ASB giving you wholesale or retail exchange rates? You can get the current Mid Point Exchange rate off DB's Web site without being a client compare it with what ASB are Quoting you.

tobo
28-02-2009, 12:13 PM
Possum,
I did a test and found I was getting an exchange rate three-quarters of a percent on the mid-point rate wholesale rate.
That was exchanging from NZD CMA (ASB) to ASB AUD bank account.

Now,
regarding your method,
say you already have a balance in your AUD account, and you just want to use that to buy on ASX, (and no conversion to NZD is wanted) what do you do? I presume the CMA you have with DB is a NZD account.

POSSUM THE CAT
28-02-2009, 02:58 PM
Tabo I have a Direct Broking Call account run through Perpetual Trustees for NZ $ trading and A Macquarie Cash Management Account for A$ trading set up through Direct Broking I specify the settlement currency on the online order form & Direct Broking work from there. The Macquarie account has an A$ cheque book if you want it and an A$ B/PAY facility that allows you to pay for most Australian rights issues up to the night before the closing date by direct transfer. This saves the hassle of sending cheques many days before & possibly being delayed or lost & you can change your mind or decide much later. If you want more Phone Me if you have lost the Number private message me

Kookaburra
03-03-2009, 05:19 PM
Yes, the decision/choice very much depends if you are a trader or investor. The direct broking/MacQuarie account/CHESS depository system works very well for investing and costs are reasonable. CMC looks much more suited to a trader though i am not one and have not explored this further.

dragonz
03-03-2009, 08:49 PM
Yes, the decision/choice very much depends if you are a trader or investor. The direct broking/MacQuarie account/CHESS depository system works very well for investing and costs are reasonable. CMC looks much more suited to a trader though i am not one and have not explored this further.

Precisley!!!!!