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Carlin, Tyrone M; Ford, Guy --- "Editorial" [2006] JlLawFinMgmt 5; (2006) 5(2) Journal of Law and Financial Management 7

Editorial

On just one day during November 2006, US$52 Billion worth of private equity deals were announced around the globe. By that time, more than US$200 Billion in such transactions had been successfully consummated. It would seem that at least for the present, we are living in an era of private equity. As long as this persists, iconic corporations whose equity has long been traded in the public domain will be spirited off into the far less observable private domain.

However, whatever questions this raises about the nature of public equity capital markets, it would be premature in the extreme to suppose that the rise of private equity will come only at the expense of the continued existence of public equity markets, which continue to grow in size and aggregate value.

Indeed, the market capitalisation of the Australian Stock Exchange increased by approximately 20% during 2006, and by the conclusion of 2006, had risen by a total of 110% since beginning an extended bull run began in March 2003. It is estimated that in 2006 alone, AUD $50 billion flowed into this country’s collective superannuation plans.

In an era of high equity valuations and increasing direct and indirect exposure by citizens to equities as an asset class, it is pertinent to pause to examine the effectiveness of the mechanisms put in place to protect the interests of market participants.

Bearing this in mind, this edition of the journal contains papers which examine and question the health of Australia’s continuous disclosure regime, financial reporting arrangements under the new A-IFRS regime and the regulation of equity analyst recommendations. With each paper concluding that improvements to practice are possible and desirable, this edition of the journal serves as a timely reminder that the task of effective regulation is never complete.


Tyrone M Carlin & Guy Ford

Sydney, December 2006


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