A positive start to the week with overseas markets pointing us higher, as Tapering Talk revived commodity markets and the hope of free money forever was once more back on the agenda. Early euphoria though did abate somewhat to close up 12 points at 5135.Banks and Financials were positive as usual, as Commonwealth Bank of Australia (A$72.58, +0.7%) led the way, and despite a downgrade on their UK credit rating National Australia Bank Limited (A$32.55, +0.3%) managed to remain positive. Suncorp Group Limited (A$12.37, -2.1%) were ex dividend this morning with a special in there as well. In resource land the Golds had a big fillip today as rumours of its demise seem to have been well and truly exaggerated. Newcrest Mining Limited (A$13.70, +4.9%) was a big mover but so were Kingsgate Consolidated Limited (A$2.81, +6.0%), Beadell Resources Limited (A$0.89, +3.5%), Resolute Mining Limited (A$1.075, +5.4%),Evolution Mining Limited (A$0.96, +2.7%) and Regis Resources Limited (A$4.27, +4.1%). Big resources were largely unchanged with BHP Billiton Limited (A$35.58, -0.2%), RIO Tinto Limited (A$59.81, -0.2%) and Fortescue Metals Group Ltd (A$4.41, -0.9%) milling around. Woodside Petroleum Limited (A$37.78, -1.1%) ex dividend.
Industrials were a little non-plussed today and Brambles Limited (A$8.64, -1.7%) continued their slump after their earnings miss last week. Others like Qantas Airways Limited (A$1.285, -1.5%), Sydney Airport (A$3.74, -0.3%),Mermaid Marine Australia Limited (A$3.94, -3.2%),Auckland International Airport Limited (A$2.75, -1.8%) and Twenty-First Century Fox, Inc. (A$35.71, -0.8%) all suffered whilst Telstra Corporation Limited (A$4.88, unch) were a tad firmer. Retail land was very firm today with David Jones Limited (A$2.79, +3.3%), Myer Holdings Limited (A$2.74, +2.2%) both super strong with Harvey Norman Holdings Limited (A$2.93, +0.3%) and JB Hi-Fi Limited (A$19.04, +0.6%) only mildly interested in the day.
As we approach the tail end of the reporting season it seems that things aren’t as bad as the media and a few companies would have us believe. Only a small minority 12% have cut their dividends and 66% of the 70% reported have reported higher profits 100% of the time. So high profile whingeing is not the norm in corporate land this year. So I guess its even more bullish when we get some certainty of Government for the next three years. The only thing really missing is confidence.
Big winners today included Kathmandu Holdings Limited (A$2.68, +4.3%), Alumina Limited (A$1.035, +3.5%),Crown Limited (A$14.68, +2.4%),Lend Lease Group (A$9.42, +3.2%) and David Jones Limited (A$2.79, +3.3%) whilst in the kennels today were United Overseas Australia Limited (A$0.52, -5.5%),Energy World Corporation Ltd (A$0.485, -4.0%),AP Eagers Limited (A$4.49, -4.7%),M2 Telecommunications Group Limited (A$6.72, -4.8%),WorleyParsons Limited (A$22.08, -4.5%) and AWE Limited (A$1.35, -2.9%).
Volume was encouraging for the start of the week but it is helped along by option exercises for the dividends.
Asian Markets also rose today as the dreadful US housing data pointed to free money forever. Green across the screen!
Stocks and Stories
House stocks in the winners enclosure today included Bullabulling Gold Limited (A$0.098, +66.1%) with a stunning run. These babies were all set for a decent burial before the Packer Whackers were applied and up they soared. Good media coverage from the West over the weekend ensured a very strong day.
REA Group Ltd (A$35.74, +2.6%) shrugged off their Ex Date as well, running very well today as the spring like weather in the capital cities encourages the buyers out in force.
Silver Lake Resources Limited (A$1.01, unch) Looks like a capital raising on the firmer gold price is in the offing at around 85 cents. Will raise around $60 and being done in a book build today.
Caltex Australia Limited (A$18.93, -0.1%) reported today with a profit or 167m on revenue of $11.5bn down a tad. Dividend was steady at 17 cents.
Boart Longyear Limited (A$0.49, -11.7%) showed us that the worse may not be over for mining services as they announced their results today. Non-Cash impairments again, revenue down from US $1.1bn to US $719m.Funding options being explored! No Div.
Australia’s only listed Health fund also reported today with a rise on claims and tough trading conditions dampening the numbers at NIB Holdings Limited (A$2.12, -0.5%).
Tomorrows News Today
Gareth Bale signs with Real Madrid for a record breaking sum!£86m!And he can act, I thought he was great in Batman!
And it looks increasingly likely Britain and the US are going to fire cruise missiles at Syria to protest against the use of chemical weapons. Not sure either can afford another unwinnable war but guess they must do something to try to stop this unfolding tragedy.
Greece may need a third bailout but would not accept new austerity measures, the Greek finance minister, Yannis Stournaras, has said. Apparently they only need $10bn this time. They promise to pay it back one day.
Plug this one into your East African Oil valuations, as the Indians have ridden over the horizon and stuffed Anadarko with bucket loads of cash for 10% of their Mozambique prospect.$2.64bn is pretty out there.
Gotta love Italy. Members of Silvio Berlusconi’s center-right party on Sunday openly warned they would bring down the government if their center-left coalition allies voted next month to expel the former prime minister from parliament.
Goldman Sachs has put four senior technology specialists on leave after an embarrassing trading glitch that is likely to cost the bank tens of millions of dollars. Thought to be less than $100m but I reckon they should start polishing their CVs. Won’t be popular back at HQ.
And over in the UK the Government has announced that it is selling its Blood Plasma business, Plasma Resources to Private equity in a deal rumoured to be worth around $150m. Worldwide sales of plasma products hit $10.4bn in 2012, up from $6.2bn in 2005, according to the US market researchers Kalorama Information. Analysts expect the industry to grow at 9% a year, as demand for better healthcare accelerates in Asia, while scientists race to develop new plasma-based treatments for conditions such as Alzheimer’s disease. Helped Csl Limited (A$67.18, +1.5%) today.