A topsy-turvy kind of day as the market swung between gains and losses, before finally succumbing to gravity and closing down 1 at around 5112.Good touch up at the close! All things considered though the performance was not too bad at all. We started the session 20 points behind before we opened just on Ex Dividends alone through Commonwealth Bank of Australia (A$71.15, -2.9%),Telstra Corporation Limited (A$4.91, -3.7%) and #JB Hi-Fi Limited (A$18.60, -0.3%) and negative leads from the US on Friday, however defensives and the odd bank were once again sought after with Wesfarmers Limited (A$41.00, +1.9%) bouncing back after last week’s overreaction to the “Target broken” news .Woolworths Limited (A$33.63, +1.2%) also put in a good performance as did Metcash Limited (A$3.51, +1.2%) with healthcare stocks also better today Csl Limited (A$64.30, +1.5%),Cochlear Limited (A$59.35, +2.1%) and ResMed Inc. (A$5.40, +0.9%). Financials were mixed as CBA went Ex and Australia and New Zealand Banking Group Limited (A$29.44, unch) fell too but Westpac Banking Corporation (A$31.57, +1.0%) and Challenger Limited (A$4.68, +7.3%) did well as did the insurers Suncorp Group Limited (A$12.47, +1.1%),Insurance Australia Group Limited (A$5.87, +1.0%) and QBE Insurance Group Limited (A$17.03, +0.8%).
In resource land we had a big fall from Bluescope Steel Limited (A$4.70, -14.1%) after their results and Arrium Limited (A$0.985, -5.7%) also got caught in the down draft with the big materials BHP Billiton Limited (A$37.04, +0.5%) and RIO Tinto Limited (A$60.14, +0.1%) pretty much unchanged with Fortescue Metals Group Ltd (A$4.05, +0.5%) finally closing in the green too. Energy stocks also had a good day out with Woodside Petroleum Limited (A$38.70, +1.1%),Santos Limited (A$14.75, +1.4%),WorleyParsons Limited (A$22.85, +2.6%) and Buru Energy Limited (A$1.975, +6.2%) doing well.
Big winners today included Resolute Mining Limited (A$1.01, +11.0%),Challenger Limited (A$4.68, +7.3%),Independence Group NL (A$3.59, +5.6%).McMillan Shakespeare Limited (A$12.37, +6.8%),Aquila Resources Limited (A$2.27, +5.1%) and Evolution Mining Limited (A$0.925, +2.8%) whilst in the naughty corner were Bluescope Steel Limited (A$4.70, -14.1%),Arrium Limited (A$0.985, -5.7%),Energy Resources of Australia Limited (A$1.455, -1.7%),Paladin Energy Ltd (A$0.615, -3.1%),Linc Energy Ltd (A$1.605, -4.5%),Duet Group (A$2.04, -3.3%) and Energy World Corporation Ltd (A$0.53, -1.9%).
Volume was pretty good for a Monday at well over $4bn but then again we did have some big ex divs helping those numbers along.
Asian markets were mostly weaker although the Nikkei was slightly positive. The Indonesian market was especially hard hit today as was India which is still suffering from a rout in its rupee. Not nice!
Stocks and Stories
In house stocks today we saw New Standard Energy Limited (A$0.175, +9.4%) better on securing some drilling rigs. Buru Energy Limited (A$1.975, +6.2%) also climbed on their SPP announcement and ASG Group Limited (A$0.435, +13.0%) secured a global support contract with Clough helping them on their way. Also starring today was Bullabulling Gold Limited (A$0.05, +22.0%) as drilling recommenced at Bullabulling and Kingsgate Consolidated Limited (A$2.32, +17.5%) sprinted away with the goodies showing other golds a clean pair of heels.
Bluescope Steel Limited (A$4.70, -14.1%) had another shocker with no good news for shareholders. Although it was good news for the CEO who saw his pay increase to nearly $5.1m!
Challenger Limited (A$4.68, +7.3%) reported good numbers again as the fund manager, annuities provider and life insurer said revenue increased by 10.9 per cent to $1.6 billion in the year to June 30, while net profit surged 180.7 per cent to $416.8 million. Total assets under management surged 34 per cent to $44.8 billion in the 2013 financial year.
Amcor Limited (A$10.49, -1.8%) reported a 8.6 per cent rise in full-year net profit before one-off items, and said its business would deliver increased earnings in 2014.Net profit before one-offs rose to $689.5 million for the year to June, from $634.9 million a year earlier.
Bendigo and Adelaide Bank Limited (A$10.60, unch) has recorded a 7.7 per cent rise in cash earnings, which hit $348 million in the year to June. The bank is also raising its final dividend to 31 cents a share – an increase of 3.3 per cent.The regional lender said net interest income rose 8.1 per cent, while expenses rose by a smaller margin of 3.6 per cent.
Dexus Property Group (A$1.015, -1.0%) has nearly tripled its net profit but expects a modest rise in earnings this financial year. Dexus made a net profit of $514.5 million for the 2012-13 financial year, up from $181 million for the previous 12 months. The profit increase included a $218 million, or 3.1 per cent, rise in the value of its investment properties.
Now computer trading is here to stay but when it goes wrong it can do spectacularly.On Friday, “Neverbright Securities”had a bit of a fat finger when they pushed the ,market up by nearly 6% on a huge buying spree.Seems the computer had a big lunch and decided to have a go.Nice loss at around $65m apparently. Needless to say there have been ramifications and the brokerage firm has been banned from proprietary trading for three months. Naughty computer!But then this morning they did it again in the bond market.Good work guys!Sold them at a big discount to the market.Ooops..when it rains it pours for Neverbright!
And it looks like BlackRock have voted with their feet on where Iron Ore is heading as they have exited a big chunk of their Iron Ore exposure on Thursday last, selling 6% of Atlas Iron Limited (A$0.95, -1.6%) some RIO and some FMG.
Tomorrows News Today
It’s a big week for Central Bankers, is that rhyming slang?(not sure) as Jackson Hole kicks off. This is usually the time when we get some more obscure commentary from the Fed Chief. What he’s not going?…really something better to do ..trim beard ,wash his hair. Won’t be the same without you Ben. Still we will get lots of speculation on who is going to take over his job. And of course FOMC minutes as well.Taper coming..pull up! pull up!
Also this week we get a bunch of economic numbers out of Zombieland so expect the green shoots to continue. Also Chinese data will be closely watched including an HSBC report on manufacturing.
Signs from Japan that things are improving Japan’s exports jumped in July from a year earlier at the fastest pace almost three years in a sign that a recovery in overseas demand and the often-touted benefits of a weak yen are finally starting to take hold. However, the trade balance was in deficit for the 13th consecutive month in July, as imports surged by the most in three years.
And spare a thought for our Swedish friends who buy homes with a mortgage, it takes an average of 140 years to pay down home loans. Children or next of kin assume the debt when the mortgage outlives the original buyer, though policymakers there are considering changes to encourage speedier repayment, and a maximum loan to value of 85 percent was introduced in 2010.Would love to get the trailing fees on those babies!
And from the front page of the SMH today, it talks of the new property boom whilst speculating on a coming recession! Make up your mind!