What the Lord giveth, the Lord taketh away. After yesterday’s huge rise in Commonwealth Bank of Australia (A$73.73, -1.1%) and Csl Limited (A$65.79, -3.0%) pre the numbers, it was inevitable that they needed some reality checks and today we saw that, with both down after the figures. Both recorded record profits but some disappointment as no special div for CBA was evident. The market struggled to gain traction after the big run we have had this week and some consolidation was inevitable. However most analysts were pouring over profit reports and trying to digest the amount of information hitting their desks. The ASX 200 managed to hold on to 5150 with a late afternoon rally of sorts to close virtually unchanged at 5157.The green blob of banks was still there but just minus Commonwealth Bank of Australia (A$73.73, -1.1%). Other financials were mixed with QBE Insurance Group Limited (A$17.49, +2.3%) up Macquarie Group Limited (A$44.63, +0.6%) better but others like AMP Limited (A$4.54, +0.2%),Suncorp Group Limited (A$12.46, unch),Insurance Australia Group Limited (A$5.84, +0.5%) relatively unchanged. Resources also took a breather with BHP Billiton Limited (A$36.90, -0.2%) giving a bit back as did RIO Tinto Limited (A$61.93, -1.1%),Fortescue Metals Group Ltd (A$4.29, -0.7%) and Newcrest Mining Limited (A$11.94, -1.3%). One bright spot today was the consumer stocks Woolworths Limited (A$33.61, +0.9%) and Wesfarmers Limited (A$41.93, +1.3%) and even Crown Limited (A$13.95, +3.2%). However some of the big runs from yesterday were whittled away with Bradken Limited (A$5.79, -1.7%),Boart Longyear Limited (A$0.58, -2.5%) and Coffey International Limited (A$0.185, -2.6%) giving a bit back.
The grinners today included Southern Cross Media Group Limited (A$1.60, +8.1%),Carsales.Com Limited (A$10.72, +6.7%),WorleyParsons Limited (A$22.65, +3.4%),G8 Education Limited (A$2.77, +4.5%) and SAI Global Limited (A$4.04, +3.6%) whilst in the dog house were Goodman Fielder Limited (A$0.735, -4.5%),Computershare Limited (A$9.75, -6.3%),Leighton Holdings Limited (A$16.24, -6.0%).Downer EDI Limited (A$4.18, -6.1%) and UGL Limited (A$7.22, -4.2%). Bit of a theme in the losers as LEI fell after their numbers missed estimates and they suggested that they had a big blow out in debtors with 50% from the oil and gas industry. This affected the sector and Downer EDI Limited (A$4.18, -6.1%) went ex div too.
Asia was mixed as Typhoon Utor bore down on Hong Kong closing their market. Tokyo eased slightly whilst China was tad better.
Volume was slightly better today with CBA dominating trading followed by RIO, WBC, BHP and TLS. But at least we got over $4.5bn today which is a bit better. Be nice if it lasts.
Stocks and Stories
Results focus today with some biggies in the frame.
Commonwealth Bank of Australia (A$73.73, -1.1%) results dominated with an underlying cash profit of $7.819 million being a 2.9% beat on estimates of $7.6 billion – a 10% beat year-on-year and an all-time record figure. However the most anticipated figure of the results – dividend growth. The full-year dividend is up 9% to $3.64, for a final dividend of $2 a share which was right on the consensus forecast. This sees the payout ratio at 75.4% for a final net yield of 4.88% from yesterday’s close.
Computershare Limited (A$9.75, -6.3%) Not enough it seems as the company continues to suffer from low volumes. Challenging it said. The company has posted a profit of $US157 million, a 9.2 per cent fall from the previous corresponding period.
They will pay a final dividend of 14 cents to be paid on September 14.
Goodman Fielder Limited (A$0.735, -4.5%) described things as Challenging! It reported a net profit after tax of $86.5 million for the year to June 30, an 11.6 per cent decrease from the previous corresponding period.
Sydney Airport (A$3.60, unch) went into a trading halt today as it looks to raise funds to tidy up its 12.5% minority holders and give them listed shares rather than unlisted ones and in some cases cash.
Primary Health Care Limited (A$5.14, -2.8%) has boosted its payout to shareholders substantially, after lifting its annual profit by 28.7 per cent. Primary booked a net profit of $150.1 million for the 2012-13 financial year, up from $116.6 million in the prior year. Primary will pay shareholders a fully franked final dividend of 11 cents per share.
WorleyParsons Limited (A$22.65, +3.4%) has delivered a full year net profit of $322 million, a fall of 7 per cent from the previous year. It will pay a dividend of 51 cents on September 20.
OrotonGroup Limited (A$6.69, -3.0%) announced a profit downgrade which sent the shares tumbling 10 per cent, the upmarket fashion retailer has announced the shock resignation of its long serving chief executive Sally Macdonald and a reshuffle of its board.
Carsales.Com Limited (A$10.72, +6.7%) has reported a net profit after tax of $83.6 million for the year to June 30, a 16.8 per cent increase from the previous corresponding period. The automotive classifieds advertising business a fully franked final dividend of 15.6 cents per share, to be paid on September 25.
ResMed Inc. (A$5.34, -2.0%) reported a net profit of $US307.1 million for the year to June 30, a 20.5 per cent increase from the previous corresponding period. The sleep apnoea equipment maker declared a dividend of 68 US cents per share.Love those US dividends.
Tomorrows News Today
Looks like today’s Eurozone figures will show that the recession is over. Looking for marginal growth of around 0.1-0.2% quarter on quarter. May be a little early to pop the champagne corks but ‘Moaning Mertle’ will be pleased with her re-election coming up. Germany driving things as usual. And the French economy grew at a whopping 0.5% the best since Hollande took office. Won’t help the unemployment though. May need a bit more growth to do that.
Carl iCahn has made a tidy profit from his latest foray having bought into Apple he the tweeted 49 words and the valuation rose $12bn. He tweeted that he was the owner of nearly 5% and was pushing for more share buybacks. I knew there was a reason I was on twitter!
India raised import taxes on gold and silver on Tuesday as policymakers scrambled to narrow a gaping current account deficit, but concerns about the slowing economy and fears of more capital outflows kept up pressure on the ailing rupee.
One high profile analyst is predicting that Iron Ore will go to a record as the Fed start tapering. His logic is that Japanese and US companies are sitting on $7.7 trillion of cash and as the World comes out of this recession they will start spending up big! He is looking for a further 30% this year and not just in Iron Ore. Seems that Jonathan Barratt, founder of Barratt’s Bulletin has been taking the blue pills!
Canada’s version of Warren Buffet, Prem Watsa, is emerging as the man most likely.He has recently resigned from Blackberry’s board and is firm favourite to take a role in buying out the beleaguered smart phone maker. Suspect he may have a quick look at the recent Billabong playbook for some tips on driving a hard bargain! So Watsa Blackberry..well it ain’t no Apple. Ask iCahn!
Looks like the USD is becoming the raw prawn with news that The US Commerce Department has imposed duties on prawn imports from five nations. The ruling applies to about $2bn (£1.3bn) of imports, from India, Ecuador, China, Malaysia and Vietnam.
And good to see the bull is firmly in control with Bank of America’s monthly survey of investors showed a dramatic rise in confidence in August, with a net 72pc expecting growth to accelerate over the next year. It is the highest reading since 2009.All this while margin lending has reached an all-time high in the US at around $377bn.More than during the dot com boom. More than pre Lehmans!