Australia | Oct 31 2014
By Henry Jennings, Private Client Advisor, BBY Ltd
It’s Halloween. Warm and fuzzy feelings all around today as the horror month draws to a close. Who would have thought on 13th October we hit 5150 and every commentator(not me) was saying the bank run was over. Well here we are at way above 5500 as the afternoon rally pushed ahead (as news of a further Jap easing worked its magic) to leave us up 50 at 5527.
Two results today from the big boys Macquarie Group Limited (A$61.17, +2.2%) and National Australia Bank Limited (A$34.99, +1.0%). Both good. The Millionaire’s factory was especially good with their third highest half yearly number in their history. Dividend up 30% too. What is not to like. So everything pushed ahead with a few exceptions, Newcrest Mining Limited (A$9.32, -4.5%) was one as was Santos Limited (A$12.90, -0.5%). Newcrest seem to be re-evaluating their salary policy, hopefully downwards. For the week we were up 114 points, not too bad ,2.1%.
So to the runners and riders for today. Winners included Liquefied Natural Gas Limited (A$3.72, +5.1%),Henderson Group PLC. (A$3.75, +5.3%)(figures yesterday),Premier Investments Limited (A$10.71, +4.9%),Southern Cross Media Group Limited (A$0.98, +6.5%),Fairfax Media Limited (A$0.815, +3.2%),Ainsworth Game Technology Limited (A$3.03, +4.5%) and UGL Limited (A$6.96, +3.4%) in the big ones and #VET#(had a shocker this week),#MVF#,#TZN# and #GID#. Dog food included Oceanagold Corporation (A$2.00, -9.1%),Newcrest Mining Limited (A$9.32, -4.5%),Northern Star Resources Ltd (A$1.10, -5.2%),Ardent Leisure Group (A$3.13, -3.1%),Panaust Limited (A$1.71, -2.3%),Billabong International Limited (A$0.665, -2.9%) and Beach Energy Limited (A$1.165, -1.7%) plus #OBS#,#GOR#,Yancoal Australia Limited (A$0.215, -6.5%) and Alacer Gold Corp. (A$1.925, -5.6%). Volume was strong at around $6.2bn but then it was expiry in the options markets last night.
Aussie dollar was 88.00 (and falling!) and bitcons $389 with gold at $1357 in Aussie dollars. Asian markets going well with Tokyo up nearly 2% and Honkers and Shankers up around 1% too.
Stocks and Stories
Newcrest Mining Limited (A$9.32, -4.5%) Don’t you love it as the Chairman defends the CEO salary saying that “his incentives will only be paid where performance is above business as usual expectations, ”now in the case of Newcrest business as usual is a case of one stuff up after another, writedowns and production issues. So shouldn’t be too hard for him to get more than BHP head ,Andrew McKenzie.
Macquarie Group Limited (A$61.17, +2.2%) A great set of numbers especially from the corporate finance guys who have been busy working on deal after deal. All systems go and as the market continues to bubble away and M&A activity to increase, it’s hard to find a reason not to like them. They reported a $678 million net profit for the six months ended September 30, compared to $501 million in the same period in 2013, according to accounts lodged with the ASX this morning. That beat analyst expectations for interim earnings of $645.5 million.
Australia and New Zealand Banking Group Limited (A$33.50, +0.7%) Mike ‘007’ Smith announced yet another $(oo)7bn profit today and looked like the cat who had got the cream! Hardly much to surprise the market though as they leaked the numbers last week in a analysts spreadsheet. Looks like a good tactic. Sure looks like they are strapped for cash! 10 per cent jump in profits and higher dividends The bank this morning said full-year cash profit was $7.11 billion. It will also pay a final dividend of 95c a share, up 14 per cent
Aurizon Holdings Limited (A$4.68, +1.3%) has confirmed its chairman John Prescott will step down within a year as the rail freight company “accelerates” plans to renew its board.
Medibank Private- looks like the general allocation pool is the way to go as the federal government has set aside more than $3 billion worth of the shares for retail investors, which means mum and dad shareholders will end up owning about 60 per cent of the company.
Housing credit rose 0.5 per cent in September. This pushed the 12-month figure to 6.8 per cent, the highest since Feb 2011.Credit for owner-occupier housing rose 0.5 per cent in September, this pushed the 12-month figure to 5.5 per cent, the highest since Jan 2012.But Credit for investor housing rose 0.9 per cent in September, compared to 0.8 per cent in August. This pushed the 12-month figure to 9.5 per cent, the highest since Mar 2008.
Tomorrow’s News Today
Looks like the Japanese have eased again with more money being pumped in, new target is 80 Trillion Yen. Expect a record on the Dow tonight. Aussie dollar falling.
More trouble in West Africa as if they haven’t got enough problems as Burkina Faso falls to the military. The incumbent PM says he will stay on though until fresh elections. Don’t bet on it!
Russia and Ukraine agree on a gas deal which should avert any energy crisis for Zombieland this winter.
Good news for the land of the Hobbit. Fonterra has said China has lifted the import ban on its milk powder used to make baby formula that was implemented last August following a false alarm safety scare.
Bad loans at China’s biggest banks rose at the fastest pace in at least seven years during the third quarter as a slowing economy squeezed corporate borrowers. Industrial & Commercial Bank of China and China Construction Bank, the country’s two biggest banks by assets, reported their biggest quarterly jump in bad loans in at least seven years, with rises of 9 and 10 per cent respectively.
Channel Sevens’ Sunday Night show is looking like the rumble in the jungle as executive producer Mark Llewellyn and producer Paul Waterhouse seemed to have gone toe to toe this afternoon.
Barclays sets aside £500m towards forex-rigging fines .Citigroup has put aside $600m for a criminal inquiry into FX rigging.
The Tokyo Survey Research said that Japanese bankruptcies year-to-date in 2014 are up a stunning 140%.
That is all. Have a good weekend. On Sky at 5.30 pm
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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