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Another very, very solid day in the banks. The market map shows a huge blob of green in the big four gradually spreading out and conquering the universe like some sort of fungal infection. Australia and New Zealand Banking Group (A$31.84, +5.8%) was the highlight as it lifted its profit by 10% and upped its dividend by 11%. The market cheered, applauded and then off she went pushing them and Westpac Banking (A$33.80, +2.1%) and National Australia Bank (A$34.00, +2.8%) to record highs. This rally has been pretty concentrated in financials in the last few months coupled with Woolworths (A$36.41, -0.3%), Wesfarmers (A$43.37, +0.4%) and Telstra (A$4.98, +1.0%). Very crowded and concentrated trade in these stocks but they are right at the moment. If the other banks can deliver these sorts of numbers there will be more records broken. Telstra (A$4.98, +1.0%) looks like a winner on either side of politics and is knocking on the door of $5.00, an 8 year high. Seems hard to believe that the Future Fund (there’s an interesting name for a Civil service Pension Fund) sold theirs below $3.00.Good call. Other winners in the financials included Macquarie Group (A$39.19, +3.5%), Suncorp Group (A$12.98, +2.9%), Insurance Australia Group (A$5.82, +1.0%) and AMP (A$5.40, +0.7%). However financial advisory group WHK Group (A$0.86, -3.9%) had another shocking day following yesterday’s update.

As usual resource stocks struggled  before a large afternoon surged as BHP Billiton (A$32.70, +0.5%), RIO Tinto (A$55.80, +0.8%) and Fortescue Metals Group Ltd (A$3.50, unch) appeared to find some support pre the Chinese PMI number tomorrow. Woodside Petroleum (A$37.56, -1.0%) went ex their extra special dividend today and held up pretty well.

Gold stocks had another rubbish day with Silver Lake Resources (A$1.05, -7.9%) continuing under pressure as were king of the canines, Kingsgate Consolidated (A$2.16, -4.8%).

Property trusts were also in favour with Stockland (A$3.87, +0.3%), Mirvac Group (A$1.77, +2.3%), Dexus Property Group (A$1.155, +1.8%), Westfield Retail Trust (A$3.30, unch) the best of them.

Shareholders in Adelaide Resources (A$0.20, +15.8%) enjoyed a meteoric ride today with the stock booming on some exciting results from their Moonta Copper-Gold project in South Australia.

In media stocks APN News & Media (A$0.42, +6.3%) have been sprinting ahead following their management restructure. Just nice to have some, I guess it’s been a while! Although Ten Network (A$0.31, unch) and Fairfax Media (A$0.65, -0.8%) didn’t enjoy any success today.

Better volume today with ANZ naturally the focus as were the other giants of the banking landscape. The green blob is spreading like a bad B Grade movie. Looks set to continue. The ASX 200 is knocking on the door of 5200.Pretty impressive 66 point rise today. Shame it is ten stocks driving it. But beggars cannot be choosers.

Stocks in the News

Obviously Australia and New Zealand Banking Group (A$31.84, +5.8%) was the highlight. Looks like Mike ‘007’ Smith has pulled the proverbial Walther PPK out of the hat and hit the Goldeneye. It was not that long ago the banks were all $25 with Commonwealth Bank of Australia (A$73.45, +2.6%) the outlier. On that basis ANZ is still a buy and WBC and NAB slightly overvalued. For the record our four banks have a larger combined capitalisation than Bank of America, Citigroup, Morgan Stanley and Goldman Sachs, who are on net capped at $389.7B.

House stocks in the news included G8 Education (A$2.43, +0.8%) ,one of our star performers and one the team have consistently called brilliantly ,continue to grow, picking up another 4 childcare centres on 4 times EBIT. Still only 3% market share so plenty of upside in this one. AWE (A$1.29, +6.2%) also reported today and pushed up after the numbers as did Buru Energy (A$1.86, -2.1%) whom we have coming in to the office tomorrow to present.

NRW (A$1.30, +5.7%) NRW Holdings has won a $180 million contract at Rio Tinto’s Nammuldi iron ore mine in Western Australia’s Pilbara region. The contract includes bulk earthworks for the processing plant, waste fine storage facility, mine service facilities, stockyard and explosives compound.

GPT Group (A$4.10, -0.2%) still aims to make a tilt for the development, commercial and industrial assets of rival Australand. Speaking at the first quarterly results today, chief executive Michael Cameron said GPT “remained committed to submitting a deal”, but he declined to elaborate.

Beadell Resources (A$0.705, +3.7%) also had a positive day after good results from their Duckhead project in Brazil. Very good hits of Gold up to 1871g/t for 1m!

The rise in Xero Limited (A$12.20, +4.54%) continues after its quarterly result and building on the momentum from the announcement that Deloittes will offer Xero to Australian clients.

Few interesting short positions.. JB Hi-Fi remains at the top of the list with outstanding short positions of 18.1 per cent of its shares on issue, with Myer at 15.1 per cent, and both Metcash and David Jones at 10 per cent.

Fairfax is at 17 per cent. The interesting additions have been mine service outfits such as Monadelphous, which is now at 11.1 per cent from 8.3 per cent at the start of March with ALS at 5.2 per cent, up from 3.6 per cent over the same time frame.

And in economic news, Private sector credit edged higher by 0.2 per cent in March, continuing a similar rise the month before and bringing growth over the past year to 3.2 per cent.

Tomorrows News Today

Austerity is dead in ‘Zombieland’ as the new Italian PM looks set to wind back some of the ‘Full Monti’s’ cost cutting measures. ’Letta’s Pray’ tears up $6bn in tax increase.. it’s a start!

Taiwan slowing down as sluggish global economy takes its toll for a GDP read of 1.5%.

Looks like a few money launderers will be moving some money around as Luxembourg has agreed to turn open its books and become way more transparent.

China has overtaken the US as the world’s biggest market for personal computers, according to a market data report. Research by the consultants IHS said PC shipments to the country rose to 69 million units in 2012.And Alibaba, one of China’s biggest e commerce sites has agreed to buy 18% of the Chinese twitter like service Weibo!

And according to one expert on CNBC, shorting the Aussie Dollar is the trade of the century. He believes it will fall to 60 cents within two months.. In the words of Daryl Kerrigan, ’Tell him he’s dreamin”

Chinese PMI tomorrow.. lovely work of fiction but will be watched.

 

Clarence

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