Its been a torrid few weeks for our market down around 3% so a few bargain hunters stepped in. Surprisingly the resource sector was on their shopping list. Rumours of the death of Iron Ore seem a little premature with the commodity rising last night and BHP Billiton (A$33.19, +0.8%), RIO Tinto (A$57.82, +1.6%), Fortescue Metals Group Ltd (A$3.98, +4.5%) and Atlas Iron (A$1.09, +0.9%) all followed. Banks were a tad mixed with National Australia Bank (A$30.95, +0.9%) positive but the others slightly weaker or unchanged until they were ramped for the official close. Commonwealth Bank of Australia (A$68.38, +0.1%) was the worse of the bunch. Big winners today was the Silver Donut Macquarie Group (A$37.26, +3.3%) and AMP (A$5.22, +4.6%). At the end of the day the market was pushed up towards to its highs of around 4995.
Media stocks performing well today included Fairfax Media (A$0.635, +0.8%), REA Group Ltd (A$27.63, +1.6%),Ten Network (A$0.335, unch) and Seven West Media (A$2.14, +2.4%).
Energy stocks were mixed with Woodside Petroleum (A$36.20, -0.9%) the weak link in an otherwise better sector as Oil rose to a 5 week high. WorleyParsons (A$25.00, +3.1%), Santos (A$12.66, +1.0%), Origin Energy (A$13.57, +1.6%) and AWE (A$1.26, +4.6%) all in the green room.
Volume was winding down for the four day break even with expiry of options today. In thin markets it is easy to push things around and the shorts suffer accordingly. Hard to cover when there is no stocks around! End of quarter window dressing also keeping the market looking good. Expect the next quarter may prove tougher than the last.
Stocks in the News
House stock Pharmaxis Ltd (A$0.325, -11.0%) continued to have shocker now reeling around the low 30’s as investors remain very sceptical about the outlook for this Biotech stock
QBE Insurance Group (A$13.42, +3.7%) Chairman Belinda Hutchinson told shareholders at the company’s annual general meeting that while the insurer was disappointed with its 2012 result, things were looking brighter this year. QBE in February reported a full year net profit of $US761 million and flagged major changes to its business to help save $US250 million in annual costs. Big protest at Frank O’ Halloran’s huge payout too but Institutions will no doubt get it over the line and so it continues!
AMP (A$5.22, +4.6%) was also a stand out today on the back of their shareholder review.
Linc Energy Ltd (A$2.67, unch) has been suspended as it attempts to raise about US$200 million through an issue of convertible bonds. The bond issue will convert to equity in 2018. The funds will be used to develop the company’s assets, one of the people said. Linc owns coal and oil assets, mostly in Australia and North America.
Fortescue Metals Group Ltd (A$3.98, +4.5%) were upgraded this morning and the shorts, which they are quite a few, were seriously punished. According to the last set of official figures there are 188m shares of FMG shorted! Our research team is suggesting that this one has overshot on the downside having fallen 30% in the last month. Probably have to say the same thing about RIO Tinto (A$57.82, +1.6%) and BHP Billiton (A$33.19, +0.8%) too.
Qantas Airways (A$1.76, +2.3%) on news that the ACCC has given the big ‘roger that’ on the Emirates tie up.
And no use crying over spilt milk as Fonterra Share Fund (A$6.00, +5.26%) showed they have creamed it, skimming off the profits and lapping up the good news today. Results and update all make them look like the cat who got the cream… sorry that’s enough puns for one day!
Agricultural chemicals supplier Nufarm (A$4.77, unch) has requested that its shares be placed in a trading halt pending an announcement about the company’s half-year financial results and the outlook for the full-year.
Tomorrows News Today
After the debacle that has been Cyprus, it now looks like Slovenia has some work to do or they will end up with a similar fate. It’s the new black apparently getting depositors to carry the can, whilst the Banks wriggle free. Better to be bailed out than fade away I suspect! Anyway New Slovenian PM needs $3bn Euros in a hurry and the banks need $1bn of fresh deposit money! Anyone? Vladamir?No…
Royal Dutch Shell PLC said Tuesday it has received approval from the Chinese government for the company’s first shale-gas production-sharing contract in China, a significant milestone as the country looks to tap potentially massive unconventional gas reserves and achieve ambitious shale-gas production targets.
And in more overseas news, things are getting heated between North Korea and the US with lots of threats being issued by Koreans, also in Myanmar there is trouble brewing too as Muslims are being targeted by Buddhist extremists.
And in the best news to come it looks like the Rolling Stones are going to announce they are coming to Sydney as part of their 50 years in the business tour. They are just trying to get health insurance for Keith! May be the deal breaker but fingers crossed!
And as its time for the Easter Bunny, maybe we will get another mythical creature out and about, an open Cypriot bank! Probably not!