Another positive day in the sunshine as resources picked up the slack as banks gave up some of yesterday’s big gains. Westpac Banking (A$28.17, -0.2%) and National Australia Bank (A$27.64, -0.3%) were the worse of the banks with Telstra (A$4.59, -1.7%) also giving up some of its recent gains. BHP Billiton (A$37.62, +1.2%) and RIO Tinto (A$67.12, +1.5%) were both better as was Fortescue Metals Group Ltd (A$4.73, +0.9%). In other resource stocks Mirabela Nickel (A$0.485, +10.2%) and Greenland Minerals and Energy (A$0.34, +13.3%) had a good day Defensives were led lower after results from Wesfarmers (A$38.13, -1.8%) failed to impress and reminded everyone that at some of these prices ,the results had better be good or there is potential downside to come.
Energy stocks were also in vogue as the Oil price gained on the back of Middle East issues and the emerging growth around the World. Karoon Gas Australia (A$6.15, +1.7%) pushed up as did Santos (A$12.14, +2.7%) and Woodside Petroleum (A$36.00, +0.4%). Starting to look interesting at these levels. Gold shares were again on the nose with Kingsgate Consolidated (A$4.00, -1.2%),St Barbara (A$1.395, -2.8%) and Silver Lake Resources (A$2.58, -2.3%) under pressure. Lakes Oil NL (A$0.007, +16.7%) was attracting bees round a honey pot following Gina Rinehart’s move to 19% and the Convertible note Lakes Oil NL was a stand out! Retailers also were weaker led by Myer (A$2.56, -2.3%) and JB Hi-Fi (A$9.88, -1.8%).
There was a little wind taken out of the sails following the announcement of an election on September 14th and the bookies have the Coalition odds on at 1.22 to win back power. Still lots of political fighting to go! Happy days indeed.
So it’s been 10 days of an up market which is a big call, first time in a decade so we may well be in a bull market. Investors are starting to wake up and put their money to work after the Xmas break.
Stocks in the News.
Acrux (A$3.46, +8.1%) were significantly higher today after their big Pharma partner released good sales figures for their Testosterone replacement treatment .Another house favourite in this space Mesoblast (A$5.80, +4.1%) was in positive territory after the FDA cleared phase 2 trials or its arthritis treatment.
Lynas (A$0.66, +2.3%) also had a better day despite the Chairman’s son being charged with insider trading and put on impressive gains as another application to the Malaysian court was thrown out and production and sales get under way.
RIO Tinto (A$67.12, +1.5%) is due to announce the future of its Gove alumina Refinery in the next day or so with the locals becoming increasingly worried it’s a done deal with 1200 jobs to go.
Westpac Banking (A$28.17, -0.2%) today announced yet another hybrid issue for $500m. The distribution rate is expected to be in the range of 3.2 per cent 3.40 per cent per annum.
For a stock with a bid on the table Discovery Metals (A$1.13, -13.1%) is being completely ignored and despite yet another bidders statement ,its fifth, the stock is well below its takeover price and very much in the naughty corner. The Chinese are evaluating recent updates from the company on grades and total resources in Botswana. After the RIO experience in Riversdale you cannot blame them for taking their time.
Reports in the press on Billabong International (A$0.925, -2.1%) cum another profit downgrade following a rubbish Xmas trading period were enough to put the wobbles under the stock despite the 1.10 bids still on the table(for now).
Debit and credit card transactions during the December and January holiday period soared 17.5 per cent from the year before, the National Australia Bank says, in a boost for Australian retailers following a lift in business confidence over the same period.
The estimated cost of floods caused by ex-tropical cyclone Lee Harvey Oswald stands at nearly $200 million, as insurers continue to field new claims.
Insurance Australia Group said today it had received a further 4500 claims from flood victims in NSW and Queensland in the past 24 hours. The owner of the NRMA Insurance and CGU businesses has now taken 6500 claims related to ex-tropical cyclone Lee Harvey, which has impacted much of Australia’s east coast in the past week. Insurance Australia Group (A$4.99, +1.2%) Suncorp Group (A$10.68, -0.2%) and QBE Insurance Group (A$11.75, +4.2%) all recovered somewhat as the flood waters peaked.
Tomorrow’s News Today
Big news today is the election will be on September 14th,Yon Kippur. Not sure they looked at that but still at least we have a date. Expect now 9 months of electioneering although I would expect Julia has booked the removal truck for the 15th.As has Tony! Are we the only country in the World that organises its democratic process around the Football finals?
Smog continues to envelope Beijing for another day and this will only spur the Chinese to adopt cleaner technologies quicker. Gas is going to be the new black!
And in a story that will start to resonate around this new ‘bull’ market, we will see just how geared the big financial companies are to the rising share prices around the globe. I suspect the answer will be a lot. Equity Trustees has set the ball in motion. Expect AMP (A$5.39, +0.7%), Henderson Group PLC. (A$2.39, -0.4%), Perpetual (A$38.55, -0.5%)Macquarie Group (A$38.64, +1.1%) and others to be significantly better off with all-time highs on the Dow and other markets. K2 Asset Management Ltd (A$0.53, +9.3%) were a big mover today so the sector looks interesting.
Can we make it 11 days up in a row? Not happened since October 2003 but looks like record books will need the ‘white out’. Lots of US figures to come and FOMC too, so enough to keep us bubbling along for the time being.
For those of you who are early risers I will be on SKY Biz TV at 06.30am.Oh my God its early! See you there!