CMC Markets Stockbroking joins forces with theScreener

CMC Markets Stockbroking has signed a partnership agreement with theScreener, to become Australia’s first stockbroker to provide frequent traders with more detailed research, analyst reports and stock picking recommendations through a unique star-rated reports system.

theScreener is a leader in independent equity analysis. Created in Switzerland, theScreener’s powerful software computes complex calculations on over 5,000 companies and securities from both the local and international equity markets. It extracts the most critical technical and fundamental elements, to create star-rated reports, inclusive of risk profiles, for each stock.

Andy Rogers, Head of CMC Markets Stockbroking said, “As part of the investment program in our platform, we scoured the globe for a partner that could provide genuine stock-level investment insights that could be integrated with our online broking platform”.

“We chose to partner with theScreener because its software can recreate the sophisticated techniques traditionally used by professional investors. In the coming months we will provide this innovation to our self-directed retail customers, which is another compelling reason to switch provider to CMC Markets Stockbroking,” adds Rogers.

theScreener’s depth of analysis gives Australian traders visibility on the performance of all ASX-based stocks by providing fundamental, technical and projecting criteria. It also creates a star rating based on earnings revenue trend, price potential, medium term technical trend and relative performance. Complementing the upside star ranking is the risk evaluation, which takes into account both the historical bear market and bad news behaviour indicators.

Ernst Roth, Managing Director of theScreener Asia Pacific said, “We are excited to extend our services to Australian investors and expect them to benefit greatly from our clear objective analysis”.

“For over a decade theScreener has clearly shown that purchasing stocks when the star rating of the stocks move from two to three stars, and three to four stars, have provided the most favourable performance, both on an absolute and relative to the benchmark basis,” adds Roth.

“All traders with CMC Markets can now make better informed investment decisions by generating compact, detailed stock reports with the click of a mouse,” says Rogers.

Rogers adds that professional buy-side investors, those from private banking to asset and portfolio managers, use this software to sanity check investment decisions.

“Most platforms today offer standard fundamental research within aesthetically pleasing browsers but we aim to offer traders more. CMC Markets Stockbroking’s hallmark is delivering powerful tools and market leading innovations within our trading platform and theScreener is the latest example of this strategy coming to fruition,” says Rogers.

theScreener reports are re-evaluated each week and also include newly launched funds.

Rogers adds that whilst the software is very simple to use, CMC Markets award-winning Education Team will produce a series of webinars and blog posts to illustrate the software’s full range of capability and the results it can deliver.

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The SMSF sector is the fastest growing in the superannuation industry, growing by more than 33 per cent¹ over the past five years to 500,000 funds, with an estimated $162 billion in listed shares – which means shares have now outstripped cash (at close to $138 billion) as the asset of choice for SMSF trustees.²

“With interest rates at historic lows, it’s no surprise the largest proportion of asset allocation for Australia’s SMSF sector is now listed shares,” said Andrew Rogers, Head of CMC Markets Stockbroking. “We expect to see an even greater shift from cash and term deposits to listed shares if interest rates continue to remain at current levels as many are predicting.”

Mr Rogers went on to say that various features offered by equities – in particular direct equities – also offered appeal for SMSF investors, including tax effectiveness and the ability to offer both capital growth and an income stream via dividend payments.

“Direct shares allow the trustee complete control and transparency over the portfolio along with flexibility in terms of buying and selling at the time of the trustee’s choosing – not at the time it suits a super fund, for example. This gives trustees the ability to pursue ethical or other investing agendas and to adjust and rebalance the investment portfolio in line with their own bespoke model to achieve the outcomes they want,” said Mr Rogers.

According to Mr Rogers, the big question is, with the big banks, energy and materials stocks already priced high, will SMSF trustees venture into other sectors or seek to increase the number of companies represented in their portfolios?

“If this does occur, the potential volumes we’re talking about may have a material effect on pricing and the weightings of the ASX 200 benchmark. So it’s a space we’re watching with great interest.”

To help track and measure SMSF participation in the sharemarket, CMC Markets Stockbroking has developed an infographic that provides an at-a-glance breakdown of its key features, including the top shareholdings by state.

“Our analysis found that SMSFs on the eastern seaboard showed a particular preference for financial and bank stocks whilst SMSFs in WA were more likely to hold energy and material stocks. Queenslanders were heavier in stocks across Foods and Staples such as Woolworths (WOW) and Wesfarmers (WES),” said Mr Rogers.

“So while there are geographical variations, it seems that a penchant for the big name stocks is the constant. Over the next year or so we will be keeping a close eye on where the SMSF dollars are going, so we can anticipate trends and also look at adding more features to our trading platforms to add value to our SMSF clients,” he said.

CMC Markets has recently added new features to its platform specifically for SMSF clients, including a partnership with SMSF software developer Class Super. This partnership will streamline the process of transferring client data to accountants and advisers in real time, reducing the administrative burden on clients so they can spend more time focussed on their investments.

Key findings from CMC’s SMSF analysis

While the SMSF sector in Australia is rapidly growing, CMC Markets Stockbroking’s data indicates that the uptake has been greater in certain states. Almost half (46%) of CMC Markets Stockbroking’s SMSF clients are based in NSW, while 23% reside in Queensland, 17% are in Victoria, 5% can be found equally in WA ,South Australia and the Northern Territory, 3% in SA and just 1% in Tasmania. This dominance of NSW is reflective of the ATO data which also shows a strong presence of SMSFs in the eastern states of Australia.

To download the infographic please click here.

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¹ Australian Taxation Office Self-managed super funds: A statistical overview 2010-11

² Australian Taxation Office Self-managed super fund statistical report March 2013

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