Australia | Aug 27 2014
By Henry Jennings, Private Client Advisor, BBY Ltd
A solid day today given Telstra Corporation Limited (A$5.53, -3.7%) and Woodside Petroleum Limited (A$42.98, -2.6%) were both ex-dividend and accounted for around 8.5 index points. At the death the ASX200 closed up 14 at 5651 after flirting with 5637. Despite the overnight falls in the iron ore price, miners managed to eke out gains with BHP Billiton Limited (A$37.33, +0.3%), RIO Tinto Limited (A$64.13, +unch) and Fortescue Metals Group Ltd (A$4.31, +0.7%) all in the black. Other miners joined in Beadell Resources Limited (A$0.50, +7.5%) led the golds with some good results, and Newcrest Mining Limited (A$11.25, +2.4%) also firmed up as did Kingsgate Consolidated Limited (A$0.93, +3.3%), Evolution Mining Limited (A$0.755, +2.7%) and Silver Lake Resources Limited (A$0.43, unch). The base metals and graphite superstars also did well Sirius Resources NL (A$3.86, +3.2%) and Syrah Resources Limited (A$5.17, +2.4%) standing loud and proud.
In the industrials Boral Limited (A$5.63, +4.5%) were a standout after good outlook commentary on their numbers although didn’t feed through to CSR Limited (A$3.43, -1.2%). Woolworths Limited (A$36.96, +0.5%) and Wesfarmers Limited (A$44.76, +0.4%) both firmed, Amcor Limited (A$11.55, +1.4%) shone as did Orora Limited (A$1.685, +3.4%) after numbers yesterday. Property trusts were firm, Westfield Corp, Dexus Property Group (A$1.205, +1.3%) and Goodman Group (A$5.60, +1.1%) all did well. Financials as usual were the driving force as the big four pushed ahead, QBE Insurance Group Limited (A$11.24, -1.4%) fell away after the placement settled but Cover-More Group did just that as they continued to draw strength from the results.
Energy stocks were better Origin Energy Limited (A$15.20, +1.4%), Caltex Australia Limited (A$28.39, +1.8%), Sundance Energy Australia Limited (A$1.39, +1.1%), Senex Energy Limited (A$0.62, +1.6%) and Buru Energy Limited (A$1.00, unch). Woodside Petroleum Limited (A$42.98, -2.6%) went ex, weighed on the rest.
In the hot seat today were Steadfast Group Ltd, Veda Group Ltd, Servcorp Limited (A$5.39, +5.5%), Papillon Resources Limited (A$1.725, +5.2%) and Asaleo Care in the biggies and Audio Pixels Holdings Limited (A$13.25, +30.9%), Norton Gold Fields Limited (A$0.16, +18.5%), #PSY# and #UNI# all pitching in. Losers failing to bring the sexy back were Pacific Brands Limited (A$0.525, -9.5%), Energy World Corporation Ltd (A$0.38, -7.3%), Primary Health Care Limited (A$4.44, -3.5%), Recall Holdings Limited (A$4.68, -1.9%) and Transpacific Industries Group Ltd (A$0.885, -3.3%) with Melbourne IT Limited (A$1.375, -9.2%), #PMP#, OM Holdings Limited (A$0.415, -6.7%) and McAleese amongst the smalls.
Aussie dollar around 93.2 and tulips at $552 and gold at $1283. Volume today on the good side at around $4.5bn.Japan unchanged ,HK up 0.12% and Shanghai up 0.39%.
Stocks and Stories
Results continue to drive the market. Dividends are king. Long live the King!
Boral Limited (A$5.63, +4.5%) revealed a great set of numbers with underlying profit, as measured by net profit after tax before significant items, jumped 64 per cent to $171 million. Dividend at 8c and importantly they said that business was improving across all of its divisions in Australia, the United States and Asia.
WDS Limited (A$0.985, +10.7%) bucked the trend in mining services as EPS rose to 8.9 cents from 5.5 cents – with a 1.25 cent a share special dividend giving a final payout of a handy 3.75 cents a share. This takes the annual payout to 9.5 cents from 7.5 cents a year earlier. Not too shabby at all. Who said the sector was dead! Oil and gas sector the standout.
Helloworld Limited (A$0.275, unch) reported a 25 per cent fall in adjusted earnings before interest, tax, depreciation, amortisation and impairment to $40.6 million, in line with its guidance.
The company swung to a statutory loss of $61.2 million, from a $26.7 million profit a year earlier, as a result of business transformation costs and write-downs. Total transaction value fell by 6 per cent to $4.86 billion.
Nine Entertainment Co Holdings Ltd and Fairfax Media Limited (A$0.895, +1.7%) have joined the fight for a subscription on demand service to rival Netflix and Foxtel. Streamco will be owned 50:50 by the two and they are putting in $50m each to kick it off. Might need a better name though.
Veda Group Ltd is one of the winners, jumping after the credit reference agency beat prospectus forecasts with a statutory profit after tax of $22.7 million.
Sovereign Metals Limited, Seven Group Holdings, with full-year net income dropping 46 per cent to $262.5 million. Revenues for Seven, which owns the WesTrac mining services business, fell 35 per cent to $3.1 billion.
Steadfast Group Ltd has beaten its prospectus forecast’s profit numbers, as it confirmed it would team up with reinsurance giant Munich Re to buy listed insurer #CIX# in a $105.4 million deal.
Steadfast, posted $32.4 million in pro-forma net profit, outperforming the prospectus’s $30.1 million figure.
Healthscope Limited has met its group-wide prospectus targets and recorded a full-year net loss after tax of $19.3 million.
Lend Lease Group (A$13.95, +1.5%) said full-year profit jumped 50 per cent after selling its stake in a UK shopping centre. Net income at Australia’s biggest listed property developer surged to $823 million in the 12 months ended June 30 from $549 million a year earlier. They will pay a full-year dividend of 71 cents a share, compared with 42 cents a year earlier.
Tomorrow’s News Today
Another Liberal member stand aside! Bart Bassett. You couldn’t make this stuff up. Must see TV Utopia tonight too.
Couple of Taiwanese fighters chase the Chinese off. Meanwhile in China, these guys think big, they have ambition and vision. Not quite like here I am afraid. China is considering providing as much as 100 billion yuan ($16 billion) in government funding to build electric-vehicle charging facilities and spur demand for clean cars.
Burger King moves to Canada with its donut purchase. Avoids tax.
Looks like the US is assembling the coalition of the willing to bomb IS in Northern Iraq and Syria. This one will run and run. Suspect they will sign us up for boots on the ground again.
Seems a sad choice but to defeat IS we need Assad!
UK house prices will end the year 9.5% higher than they started it, but the strength of increases this year means that in London the market could flatline in 2016.
Off to Queen tonight. Excited!
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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