Australia | Sep 30 2014
By Henry Jennings, Private Client Advisor, BBY Ltd
A jittery start on the back of ‘trouble at mill’(HK) gave way to some bargain hunting as the Aussie dollar rallied a cent and the banks looked oversold. Said as much on Sky Biz at lunchtime. The big four gathered some friends and pushed ahead by about 1% which was about time. Eventually the foreign holders and shorters would be replaced by the locals and investors looking at the sexy yields.
Telstra Corporation Limited (A$5.30, +0.6%) also gained probably for the same reason, that and sales of the iPhone 6 which look to be driving a plethora of punters into Telstra shops. News also that they would turn phone boxes into Wifi hubs also helped sentiment. With a low at 5253 and a high of 5288 and a close at 5293 up 29, we finished a horror quarter down 103 points. Most of that in the last week or so! All of the weakness is the banks and financials with a bit of window dressing helping the end of quarter numbers.
Industrials were mixed with consumer stocks Wesfarmers Limited (A$42.16, -0.1%),Woolworths Limited (A$34.24, +0.4%) and Coca-Cola Amatil Limited (A$8.78, -0.6%) all down Brambles Limited (A$9.52, -0.9%) slipping but spin off Recall Holdings Limited (A$5.60, +11.6%) surged on takeover rumours from Iron Mountain.
Miners continue to be on the nose in relative terms but even there we saw some bargain hunting and window dressing. Newcrest Mining Limited (A$10.55, +1.6%),RIO Tinto Limited (A$59.58, +0.6%),BHP Billiton Limited (A$33.87, +0.4%),Fortescue Metals Group Ltd (A$3.48, +2.1%) and Mount Gibson Iron Limited (A$0.545, +3.8%).Lynas Corporation Limited (A$0.08, -7.0%) had another shocker today.
Heading into the winners enclosure today were Recall Holdings Limited (A$5.60, +11.6%),Tassal Group Limited (A$3.68, +5.1%),Mount Gibson Iron Limited (A$0.545, +3.8%),Liquefied Natural Gas Limited (A$4.15, +4.5%),Aveo Group (A$2.12, +2.9%),Southern Cross Media Group Limited (A$0.995, +3.1%) and AWE Limited (A$1.835, +1.9%) in the bigs and #OBJ#,#ADO# and #TOR# in the smalls .Back to the horsefloat without any ribbons and prizes were Treasury Wine Estates Limited (A$4.24, -5.8%),Virtus Health Limited (A$7.77, -4.2%),Northern Star Resources Ltd (A$1.245, -5.0%),Arrium Limited (A$0.365, -3.9%),#OFX# and Iluka Resources Limited (A$7.86, -2.6%) in the Thoroughbreds and #IBY# and #MCS# in the donkeys. Volume was ok at over $3.5bn but just ok.
Asian markets were less sanguine about the Hong Kong protest marches with HK down 1.2%,Tokyo down 1.14% and Shanghai down 0.13%Dollar rallied hard to 87.62 having briefly flirted with falling below 87.Gold was $1218 slightly better.
Stocks and Stories
Recall Holdings Limited (A$5.60, +11.6%) Media reports today indicated that iron Mountain will be making a play for this one. Company has announced that they know nothing. The Schultz defence. But then why should they. Smoke, fire?
Lynas Corporation Limited (A$0.08, -7.0%) slipped dangerously close to the rights issue price and Treasury Wine Estates Limited (A$4.24, -5.8%) gave big the bounce from yesterday as a few more punters that missed it yesterday bailed out.Belatedly.
The housing boom trundles along as numbers today for credit for buy-to-let properties rose 0.8 per cent in August, taking the annual gain to 9.2 per cent – the most since March 2008, before the global financial crisis.
Meanwhile in jobs well done, NCM’s former chief executive Greg Robinson, who resigned on the back of the selective briefing scandal, received 42.8 per cent of his short term benefits; equivalent to just over $1 million. Robinson took home a total of $4.4 million in the 2014 financial year, a 65 per cent rise on the previous year. Nice work considering how badly he ran the company.
Chinese PMI today came in at 50.2 from HSBC which was weaker than the flash PMI at 50.5.Offiical one is due tomorrow.
Japan heading for a recession? Abe’s administration is “almost certain” to downgrade its assessment of the economy from “standstill” to “change of phase”.
Lorna Jane which was being shopped around to sell to Private equity has been pulled as the bids were not good enough. Seems to be a theme here! Private equity sellers but not buyers. Maybe they know something we don’t?
Tomorrow’s News Today
This is big news! The US is about to pass Saudi Arabia as the world’s biggest oil producer. Wow! US production in oil and gas related products is about 11.5m barrels a day. Oil imports are expected to provide just 21 per cent of US liquid fuel consumption next year, down from 60 per cent in 2005.most of the ramp up in production is through gas from CSG and the dreaded fracking.
A US judge has ruled Argentina is in contempt of court for its attempts to skirt his block on payments to holders of the country’s restructured debt.
China has given the green light for the sale of Apple’s iPhone 6.0.Hoorah!!
The world has lost 50% of its animals in the last 40 years! Boo!
The Medibank Private train is getting revved up and ready to roll.
Hong Kong protests set to worsen on October 1st as they celebrate the 65th Anniversary of the founding of the People’s Republic of China. National Holiday starts tomorrow so at least Iron Ore may take a breather!
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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