Australia | Jul 21 2014
By Henry Jennings, Private Client Advisor, BBY Ltd
A tentative start to the week with event in a foreign field taking centre stage still. A decent lead from the US translated into a positive bias but after hitting 5553 we sank back a little to close up 8 at 5540.Financials were in vogue with National Australia Bank Limited (A$34.25, +0.2%) leading the banks whilst insurers QBE Insurance Group Limited (A$11.82, +2.0%),Suncorp Group Limited (A$13.95, +1.0%) and Insurance Australia Group Limited (A$6.00, +1.0%) did well too. Property trusts continue to bubble along with #SCG# attracting some broker buys at the moment. In the industrial space Telstra Corporation Limited (A$5.43, unch) remained well bid, REA Group Ltd (A$48.00, +2.2%) shot away after Murdoch denied that the business model was going to change to lock agents out. Other industrials also fared well Seek Limited (A$16.61, +1.9%),Leighton Holdings Limited (A$21.24, +1.3%),Transurban Group (A$7.74, +0.7%),Toll Holdings Limited (A$5.44, +2.3%) and Seven Group Holdings Limited (A$7.87, +2.9%).
In resource stocks, Iron Ore held us back with BHP Billiton Limited (A$38.22, -0.4%),RIO Tinto Limited (A$63.70, -0.9%) and Fortescue Metals Group Ltd (A$4.57, -0.4%) all weaker but the second tier miners fared far worse with Arrium Limited (A$0.755, -3.2%), and Atlas Iron Limited (A$0.56, -4.3%) really taking things to heart. Golds were slightly easier led by Beadell Resources Limited (A$0.60, -2.4%),Silver Lake Resources Limited (A$0.525, +1.0%) and Newcrest Mining Limited (A$11.46, -0.5%) but some bucked the trend notably #WST# and Evolution Mining Limited (A$0.84, +1.8%). Energy stocks led higher by Caltex Australia Limited (A$24.00, +4.1%) as they updated the market on their refiner margins. Drillsearch Energy Limited (A$1.525, +4.1%),Woodside Petroleum Limited (A$42.21, +unch),Beach Energy Limited (A$1.76, +1.4%),AWE Limited (A$1.81, +2.5%) and Sundance Energy Australia Limited (A$1.245, +2.9%) all positive.
Volume was pretty woeful even for a Monday at around $2.6bn with big winners today Liquefied Natural Gas Limited (A$2.50, +9.6%),Transfield Services Limited (A$1.36, +5.4%),Caltex Australia Limited (A$24.00, +4.1%),Syrah Resources Limited (A$5.42, +3.4%),Drillsearch Energy Limited (A$1.525, +4.1%) and Northern Star Resources Ltd (A$1.815, +3.4%) in the big ones and Starpharma Holdings Limited (A$0.70, +19.7%),Lynas Corporation Limited (A$0.16, +10.3%),Antares Energy Limited (A$0.64, +8.5%) and Focus Minerals Ltd (A$0.012, +9.1%) carrying the day whilst dogs of the day were Energy World Corporation Ltd (A$0.335, -4.3%),Cardno Limited (A$5.98, -4.8%),Australian Agricultural Company Limited (A$1.24, -3.1%),APN News & Media Limited (A$0.725, -4.0%),Aquarius Platinum Limited (A$0.42, -2.3%) and Iproperty Group Limited (A$3.05, -1.9%). The dollar was around 94 cents just for a change and the tulips at $660 whilst gold was $1312.Meanwhile in Asia Japan fell0.8% HK down 0.18% and China down 0.2%
Stocks and Stories
Arrium Limited (A$0.755, -3.2%) has reported record quarterly iron ore sales but significantly lower sales prices as iron ore is battered by excess inventory and stricter credit standards in China.
For the three months ended June 30, they sold a record 3.32 million tonnes of iron ore, up 0.13 million tonnes on the previous quarter.
Australand Property Group (A$4.49, -0.2%) has reported a 49 per cent rise in net profit and a 30 per cent rise in operating profit after tax for the half-year, while the developer’s revenue fell 15 per cent.
Distributions per stapled security were 12.75 cents, up from 10.5 cents.
Quickflix Limited (A$0.014, +40.0%) today confirmed that #NEC# has acquired all of HBO’s 91.1m convertible shares. The game may be a foot.
Immuron Limited popped out a presentation today as the CEO was due to go in front of the 2014 Bioshares Biotech summit in Queenstown of all places. Sounds like an excuse to go skiing to me.
Antares Energy Limited (A$0.64, +8.5%) jumped on another bid approach today but they declined to say who and how much they were bidding.
Buru Energy Limited (A$0.895, -3.2%) sank to new lows today as the company couldn’t win approval to frack from local land owners. The WA government has already given them the go ahead though but it’s not a good look. And they used to get on so well!
ACCC has launched an inquiry of Expedia’s takeover of Wotif.com Holdings Limited (A$3.30, unch).
Starpharma Holdings Limited (A$0.70, +19.7%) had a great day today as ‘Justin Bieber’ Gel for condoms got Australian TGA device certification. The condom will be marketed by Ansell under the Lifestyles Dual Protect label containing an antiviral in the lubricant.
Tomorrows News Today
RasPutin has announced full cooperation into the MH17 and support of the security council vote as long as they are not blamed! Let’s hope he actually means it. Still suspect the separatist have now had plenty of time to destroy anything incriminating.
A Florida judge has awarded a woman $24bn as settlement against a Tobacco company after her partner died of smoking related lung cancer.
The question remains ,can Europe get their act together and punish the Russians or will they wimp!
Huawei, the smart phone maker ,has reported a 19% jump in sales to 135.8bn yuan ($21.9bn; £12.8bn) for the first six months of the year.It said it expects to make an operating profit margin of 18.3% for the period.
Looks like the IMF is set to downgrade the world’s GDP forecasts on Thursday.
The ‘seven year famine’ in the UK is over .Their economy probably grew for a sixth consecutive quarter in the three months through June, returning gross domestic product to levels last seen before the financial crisis. Output this year is on course to surpass its 2007 peak.
And finally love is in the air for France’s Hollande, as he is rumoured to be popping the question to actress Julie Gayet.
That is all.
Henry Jennings
Private Client Advisor
BBY Limited
Participant of the Australian Securities Exchange
Authorised and Regulated by the Financial Services Authority
Level 17, 60 Margaret St
Sydney NSW 2000
D +61 2 9226 0067
M +61 414 345 137
E hcj@bby.com.au
W www.bby.com.au
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