Australia | Jul 22 2014
By Henry Jennings, Private Client Advisor, BBY Ltd
The market managed a small gain today having fought back valiantly from 10 down in very thin trading conditions. In the end we closed up 3 points at 5543 at another 6 year high as it grinds away!
Global events have sidelined the equity markets as we await corporate results season which kicks off real soon. Financials were generally weaker led by National Australia Bank Limited (A$34.20, -0.1%) and Commonwealth Bank of Australia (A$81.26, -0.1%) plus QBE Insurance Group Limited (A$11.67, -1.3%) whilst resources were a little firmer with Iron Ore stocks shining through. BHP Billiton Limited (A$38.51, +0.8%),RIO Tinto Limited (A$64.13, +0.7%) and Fortescue Metals Group Ltd (A$4.61, +0.9%) all fared well as did Arrium Limited (A$0.775, +2.6%),Alumina Limited (A$1.495, +3.8%) and Bluescope Steel Limited (A$5.91, +3.5%). Golds were also generally better and other metal stocks like Lynas Corporation Limited (A$0.17, +6.3%),Panaust Limited (A$2.22, unch),Western Areas Limited (A$5.15, +3.8%),Iluka Resources Limited (A$9.02, +1.3%) and Oz Minerals Limited (A$4.78, +1.5%).
Industrials were narrowly weaker as the W’s fell, Woolworths Limited (A$35.70, -0.6%) and Wesfarmers Limited (A$43.37, -0.3%), beverage stocks fell flat, Coca-Cola Amatil Limited (A$9.37, -0.4%) and Treasury Wine Estates Limited (A$5.08, -1.4%) and the childcare sector breathed a sigh of relief on reports that the government is not considering hurting the childcare providers in the productivity commission report. Both G8 Education Limited (A$4.68, +5.6%) and Affinity Education Group Limited (A$1.17, +3.5%) which have been under some pressure had a good pop today. Energy stocks pushed up as the oil price benefits from the global unrest, Woodside Petroleum Limited (A$41.86, -0.8%) slipped though bucking the trend. Oil Search Limited (A$9.54, +0.4%),Lonestar Resources Limited (A$0.585, +8.3%),Santos Limited (A$14.24, +0.6%),Sundance Energy Australia Limited (A$1.285, +3.2%) and Antares Energy Limited (A$0.645, +0.8%) whilst Buru Energy Limited (A$0.865, -3.4%) continued to suffer big time. Property trusts continued their stellar runs with GPT Group (A$3.96, +2.3%),Dexus Property Group (A$1.185, +0.9%),#SGP and Charter Hall Group (A$4.21, +0.5%) all shooting the lights out.
Grinners today included Liquefied Natural Gas Limited (A$2.77, +10.8%),G8 Education Limited (A$4.68, +5.6%),Western Areas Limited (A$5.15, +3.8%),Alumina Limited (A$1.495, +3.8%),Aquarius Platinum Limited (A$0.44, +4.8%),Cardno Limited (A$6.15, +2.8%),Sundance Energy Australia Limited (A$1.285, +3.2%) and Energy Resources of Australia Limited (A$1.28, +3.2%) whilst standing in the naughty corner waiting for class to end were Transfield Services Limited (A$1.325, -2.6%),Iproperty Group Limited (A$2.92, -4.3%),TFS Corporation Limited (A$1.885, -1.8%),Skilled Group Limited (A$2.34, -2.5%) and #COE,#AHZ# and Macquarie Telecom Group Limited (A$5.50, -5.2%).
Volume would not even raise the eyebrow of a supermodel at again well under $3bn.Not quite sure where everyone has gone. Maybe the fence seems a good place to be until reporting season throws up opportunities. Funny how everyone thinks the market is expensive but no instos are selling as they don’t want to be the dumbo.
In Asia, they have no such qualms Tokyo is up 0.9% whilst HK is up 1.39% and China 1.29%.Aussie dollar is trying to push through the 94 ceiling after no jawbone from Glenn today.Gold at 41308 and digital tulips at $665.
Stocks and Stories
Consumer confidence has rebounded as the budget shock wears off. One reason is that so few of the measures have actually passed so it’s hardly surprising given the reality of the cuts is not here yet. Still it’s good to know that the country is in safe hands with new PUP senator Jackie Lambie’s performance on Hobart junk radio this morning. Look it up ,it worth listening too. Makes Pauline Hanson look like an intellectual!
Silex Systems Limited (A$0.94, unch) have gone into a trading halt pending an announcement regarding the terms of their commercialisation deal for laser enrichment with GE.
Western Areas Limited (A$5.15, +3.8%) had a good day following numbers showing our fourth-largest miner of nickel, said it produced 28,686 tonnes in the year ended June 30, 1,686 tonnes ahead of guidance.
TPG and The Carlyle Group, the private equity owners of Healthscope, decided to bring forward the institutional bookbuild to midday. Healthscope is seeking to raise $2.25 billion to $2.57 billion at 20 times to 23 times forecast 2015 net profit.
Oil Search Limited (A$9.54, +0.4%) announced operating revenue over the June quarter was $339.7 million, against $204.9 million for the same period a year ago. Quarterly production reached 3.69 million barrels of oil equivalent, against 1.63 mmboe a year ago. Market liked this obviously and is looking forward to the strategic review due in the third quarter.
New flat #FFG# a Singaporean Internet seed company debuted today at a healthy premium before stags too it back to parity.
Boart Longyear Limited (A$0.12, +14.3%) played the Lazarus card today despite S&P downgrading their debt rating a day or so ago. Positive comments from the president helping things along.
Uncle Glenn failed to jawbone the currency down in his address to the Anika Foundation Charity lunch. Maybe not the right forum to make big statements. But after, whilst smoking his cigar over a large brandy, he suggested that if he had to, he would cut rates again if the economy needed it. Which it doesn’t at the moment!
Tomorrow’s News Today
The big news for the week is the US GDP number on Friday and its possible that if its bad(weather related of course) the US will be technically in a recession! Not sure how the Buy the dip mentality market will take that news. Could get interesting. Or not!
Indonesia is set today to declare Jakarta Governor Joko Widodo winner of the closest presidential election in a decade
Credit Suisse posted its biggest quarterly loss since 2008 after settling an investigation by the U.S. Department of Justice for $2.6 billion in May.The bank’s net loss in the second quarter was 700 million Swiss francs ($779 million), compared with a profit of 1.05 billion francs a year earlier, the Zurich-based company said in a statement today.
China’s total debt load has climbed to more than two and a half times the size of its economy. The total debt-to-gross domestic product ratio in the world’s second-largest economy reached 251 per cent at the end of June, up from just 147 per cent at the end of 2008, according to a new estimate from Standard Chartered bank. Bit worried ,if US is in debt ,Europe is in debt, Japan is way in debt ,China is in debt and Australia is in debt, who to? Those Aliens are good business people!
In the UK the serious fraud office has launched a criminal investigation into allegations of price rigging in the £3tn-a-day foreign exchange market.
Seems the French are so peeved with Russia that they are threatening to cancel the sale of the second helicopter carrier ship. Not sure what good that will do as the Russians haven’t even paid for it yet! Would have to put it on eBay perhaps! Love the French they know how to apply serious pressure.
Looks like Rupert is serious about Time Warner as they move the goalposts to stop shareholders moving for a special meeting. The Sly old (21st Century ) Fox will get the chicken in the end I suspect. He has form and probably talked to Solly.
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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