A quiet predictable day ahead of the long Easter break. A lot can happen in four days so nobody was too keen to do anything except eat Hot Cross Buns and Easter eggs, still after a weak lead from the US and Europe it was inevitably going to be a slightly down day with window dressing the name of the game as we approached the close. In thin trade it’s easy to push things around and the financials were especially firm in the closing half hour. Banks were weak early as resources rallied but as the day wore on the roles were reversed with Australia and New Zealand Banking Group (A$28.53, -0.2%), Westpac Banking (A$30.76, -0.1%), National Australia Bank (A$30.84, -0.4%) and Commonwealth Bank of Australia (A$68.01, -0.5%) all slightly weaker in the final crunch. BHP Billiton (A$32.76, -1.3%), RIO Tinto (A$57.20, -1.1%) and Fortescue Metals Group Ltd (A$3.94, -1.0%) gave up good early gains but did remain off their lows on the push. However the late smash at the match out surprised on the downside with stocks closing at their worse for the day.
I am sure the news on Newcrest Mining (A$20.05, -8.3%) didn’t help sentiment. Newcrest has cut its production targets by about 10 per cent due to ongoing challenges at its Lihir operations. It reduced its gold production guidance to 2.00 to 2.15 million ounces for the 2013 financial year, which is about 10 per cent below its original forecast,I am beginning to think these guys wish they had never heard of Lihir! Shareholders certainly feel that way with yet another production downgrade. Starting to be a bit too predictable. If this were a horse they would put it down. Humane thing to do. Biggish bull run in Gold since GFC and the stock has dropped from 40 bucks to 20! Think its time to shoot the management?
There were few patches of green in a lacklustre day with CSL (A$59.23, +0.4%) and Suncorp Group (A$11.82, +1.1%) the bright spots whilst energy stocks fell with Aurora Oil & Gas (A$3.30, -11.8%) leading the way, Woodside Petroleum (A$35.82, -1.0%), Santos (A$12.43, -1.8%) and Oil Search (A$7.43, -1.8%) also fell. Orica (A$24.45, +3.0%) had an explosive day today whilst media stocks sank with Ten Network (A$0.32, -4.5%) leading the way with Seven West Media (A$2.01, -6.1%) also weak. Defensives also lost a ground with Woolworths (A$33.79, -1.1%), Wesfarmers (A$40.20, -1.0%) and Telstra (A$4.51, -0.9%) slightly weaker.
Don’t let the big volume numbers fool you today. It was expiry day yesterday so lots of option exercises and assignments in there! Shame I remember the $7bn normal days.. ah happy days indeed.
Stocks in the News
Obviously Newcrest Mining (A$20.05, -8.3%) was front and centre as discussed but also Nufarm (A$3.95, -17.2%) joined in the Easter spirit and got nailed with a profit downgrade citing the hot weather. Always good to try and sneak through a downgrade whilst no one is looking!
Linc Energy Ltd (A$2.24, -16.1%) also got whacked today following news of a $200m Bond issue. The market had been told $250 so maybe the appetite wasn’t there for anything bigger and the stock took a tumble.
In other corporate news Beadell Resources (A$0.91, -3.2%) raised some $25m at 89c taking advantage of the recent takeover speculation.
In house stocks Karoon Gas Australia (A$5.12, -4.8%) were involved in a hit and run today as their JV partner exercised its option to move to 35% of Bilby.
In other news it was announced that 9.5% of all deposits in our banks is foreign money.. that’s $146bn.Up 31% in 2012.
On the economic front, Job ads fell dramatically the Australian Bureau of Statistics reported total job vacancies fell 10.3 per cent to 149,800 in seasonally adjusted terms in the three months to end February. That left vacancies down 18 per cent on the same period of 2011.
And for a big cold thirst you need a big cold beer.. VB is once again the nations top drop in the beer stakes.
Tomorrows News Today
Going to be a few queues in Cyprus this weekend as the banks open their doors for the first time in nearly 2 weeks. Cash is actually being choppered in! This will be the headlines, will be interesting to see if there is any money there by Tuesday. Most of the smart Russia money has been rumoured to have been transferred out of the Moscow and London branches of the Cypriot banks during the closure for humanitarian reasons!
And more interesting moves in China after the banking regulator tightened rules on wealth-management products and the cabinet called for new measures to deregulate interest rates. Certainly whacked the Shanghai market today down over 2.5% as I write.
In other overseas headlines to hit next week, expect the Italians to be unable to agree on which clown runs the Parliament so back to the polls they go. And in shock news the Spanish Government has admitted the deficit is bigger than they thought. Pick a number guys!
And our next big thing is the RBA meeting next Tuesday where they get to eat all the leftover Easter eggs and then keep rates on hold. This will be the status quo for sometime to come .I suspect that the next move will be up! But after the election. Not down, down.. the prices are down!
And finally it was good to see the Stones announce they are going to headline Glastonbury in the UK. Now if they only announce an Aussie tour I can die a happy man.
Hope the Easter bunny comes bouncing up your driveway and stay safe if you are out on the roads.