Good morning,

Nothing much changed overnight as the Dow edged higher spurred on by Apple paying a dividend and announcing a $10bn buyback..it is now the World’s most valuable company and the Dow is at four year high and the NASDAQ is looking pretty stunning as well.

Still it’s hard to get excited by our market as we knock on the 4300 door..again..the biggest issue is the composition of the index which is so skewed towards the Banks and BHP and RIO..all are showing no real signs of growth. The RBA continues to fret and worry about the mining boom whilst killing the rest of the economy, the banks are suffering from low growth and BHP has had its Alcan moment having bought heavily into the US gas industry at the wrong price.

I  read an article yesterday about what needs to be done at BHP in order to get investors interested..Dividend!!Simple the dividend policy must change and they must start sharing their spoils with their shareholders…talking of which the long awaited Mining tax has got through the Parliament and this will weigh on investor’s minds somewhat plus of course the Carbon tax..now I am no greenie or leftie but the MRRT seems to me a great way to spread the wealth that is being created by the extraordinary profits of the big miners..if we look at what Norway did with its North Sea Oil revenue to become one of the World’s biggest sovereign wealth funds, that should have been the way to go…but as usual the Gillard Government executed badly(except for Kev’s head) and then sold it badly to the nation..same things applies to the Carbon Tax..good idea to price something and make economics the fundamental driver of climate change, much as the Sea Shepherd has been successful with Japanese Whalers…money or lack of it gets people’s attention..we need to change our habits with energy consumption to leave a better world for our kids but once again the Government has mispriced and botched the scheme..time will tell how damaging these initiatives will be but it makes investors nervous..uncertainty is never good.

To our market, and we are continuing to struggle on an index front, however there are some good performances from company especially in the mid cap sectors…some of this year’s biggest winners are in the $200 -1bn range

 

Rank	Code	Name	Performance   YTD (%)
1	OST	ONESTEEL   LTD	72.86
2	BBG	BILLABONG   INTL	66.95
3	NWH	NRW   HOLDINGS LTD	64.34
4	VAH	VIRGIN   AUSTRALIA	63.16
5	GFF	GOODMAN   FIELDER	62.53
6	IMD	IMDEX   LTD	58.92
7	MAH	MACMAHON   HLDGS	56.25
8	BLY	BOART   LONGYEAR L	55.04
9	AWE	AWE   LTD	45.59
10	PDN	PALADIN   ENERGY	43.8
11	FMG	FORTESCUE   METALS	39.81
12	TOL	TOLL   HLDGS LTD	39.81
13	KAR	KAROON   GAS AUSTR	39.69
14	ACR	ACRUX   LTD	39.37
15	ASL	AUSDRILL   LTD	39
16	ALL	ARISTOCRAT   LEISURE	37.73
17	SVW	SEVEN   GROUP HOLDINGS	36.86
18	FLT	FLIGHT   CENTRE	34.43
19	CAB	CABCHARGE   AUSTRALIA	32.81
20	QUB	QUBE   LOGISTICS	31.2

So it’s not all bad you just have to be in the right place at the right time..admittedly some of these have been from pretty low bases but it just shows there is money in them their hills!!and don’t get me started about BRU which hit 3.13 yesterday…first talked them at 75 cents not six months ago!!

Few things to ponder this morning

1.DJS still in suspension with credit card business announcement expected. But also speculation is switching to other issues including the possibility that the chief executive Paul Zahra may resign.

2.SPI up 5 points.

3.AUD back above 1.06 and Gold up too as US dollar weakens.

4.Asian stocks dropped after International Monetary Fund Managing Director Christine Lagarde warned of the risk of slowing growth in emerging markets and home prices in China posted the worst performance in a year.
5.Commodities mostly higher so that’s good. Copper rose to the highest closing price in two weeks as signs of economic gains bolstered prospects for metal demand in the U.S.

6. US 10 year bond rates have blown out from 1.8% to 2.37%.this is set to continue as money flows to equities…maybe IVV is a good way to play US markets as it’s an ETF based on S&P 500.

7. Global miner Rio Tinto has accepted China Guangdong Nuclear Power’s (CGNPC) offer for its 14 per cent stake in Extract Resources, owner of the giant Husab uranium project in Namibia.

8.Jim Stynes dead at 45!!!So sad!

On stocks one of my long term favorites in the news today ,with LNC talking up some outside investment in their Australian Coal Assets..I think they are a buy at these levels!

Scary thought for the day …Coal contributes 10% of our GDP  and is looking set to double in the future..that’s a lot riding on the energy boom and power station demand!!

Back on TV Thursday afternoon..

Stay Classy Sydney

Clarence

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