The market today bolted out of the blocks certainly surprising me with its 1% rise. Chinese numbers, no attack on Syria and the US closed helped the buyers take heart. Been suggesting it could get to 5200 for a while, and here we are (nearly!). We also have seen good house price rises and very benign inflation data, leaving the RBA to cut rates again if they need to. All sectors were firing despite a swathe of stocks like BHP Billiton Limited (A$35.62, -0.4%), AGL Energy Limited (A$15.57, -1.1%),Amcor Limited (A$10.34, -0.9%),#,QUB# and Seven West Media Limited (A$2.42, +3.0%) going ex-dividend today. The green blob of financials was in action as Westpac Banking Corporation (A$31.82, +1.4%) led the way on the outlook for mortgage growth on the East coast. Telstra Corporation Limited (A$4.94, +0.8%) also pushed ahead as did other defensives like Woolworths Limited (A$36.10, +1.2%) and Wesfarmers Limited (A$41.52, +2.1%) with RIO Tinto Limited (A$59.22, +1.6%) leading the way for resource stocks. In energy stocks Woodside Petroleum Limited (A$38.54, +0.9%) bucked a weaker oil price to post gains as did Caltex Australia Limited (A$19.81, +4.8%), Santos Limited (A$15.14, +1.5%),Oil Search Limited (A$8.42, +0.2%) and Origin Energy Limited (A$13.85, +4.5%). Golds had a lacklustre day considering the falls in the metals’ price. But Newcrest Mining Limited (A$13.25, -0.1%) was not too bad really, although Kingsgate Consolidated Limited (A$2.17, -2.7%), Evolution Mining Limited (A$0.94, +1.1%), Silver Lake Resources Limited (A$0.94, -4.1%),Regis Resources Limited (A$4.33, +0.5%),St Barbara Limited (A$0.78, -3.1%) and Beadell Resources Limited (A$0.895, -1.6%) all fell. #ZIM# had a meteoric day on nearly 10,000 shares as Fridays fall was reversed. Fair to say this one trades a little by appointment!
Media stocks gained with Fairfax Media Limited (A$0.56, +4.7%) ,Seven West Media Limited (A$2.42, +3.0%),Seek Limited (A$11.13, +4.0%) and REA Group Ltd (A$37.00, +2.3%) all good whilst retailers also posted a confidence boosting performance, David Jones Limited (A$2.85, +1.1%),HVN#,JBH# and Myer Holdings Limited (A$2.82, +2.5%) all stronger. And we even saw mining services stronger led by Bradken Limited (A$5.86, +2.8%),Boart Longyear Limited (A$0.475, +3.3%),Coffey International Limited (A$0.23, +4.5%),NRW Holdings Limited (A$1.48, +8.0%),WorleyParsons Limited (A$22.44, +2.0%) and Monadelphous Group Limited (A$19.00, +2.3%).
Volume was better for a Monday at around $3.9bn but still it’s quiet out there, too quiet.
Big cheesy grins plastered the following corporate faces today, ZIM,Transfield Services Limited (A$1.255, +9.6%),Steamships Trading Company Limited (A$27.50, +5.8%),Skilled Group Limited (A$3.28, +5.1%),Sirius Resources NL (A$2.95, +6.5%) and Caltex Australia Limited (A$19.81, +4.8%) whilst the biggest losers included Hutchison Telecommunications (Australia) Limited (A$0.04, -7.0%),Oceanagold Corporation (A$1.98, -5.3%),Yancoal Australia Limited (A$0.68, -5.6%),Beadell Resources Limited (A$0.895, -1.6%),Mermaid Marine Australia Limited (A$3.75, -2.6%) and Austbrokers Holdings Limited (A$10.54, -2.3%)
Asian Markets were mainly positive following the Chinese manufacturing number yesterday and a lower oil price. Only Jakarta and Malaysia shows any negativity in the region. Aussie Dollar up to 89.69 too.
Stocks and Stories
In house stocks REY Resources Limited (A$0.071, +7.6%) continued to draw strength from their Buru Energy Limited (A$1.745, +2.0%) exposure in the Canning Superdooper Basin whilst Linc Energy Ltd (A$1.585, +5.7%) also improved as did Karoon Gas Australia Limited (A$5.46, +1.9%).
Virgin Australia Holdings Limited (A$0.405, +3.8%) looks like Etihad is increasing its stake in Virgin today as a large block of stock went through at 40 cents. A tranche of 36.75 million shares in Virgin – representing a 1.4 per cent stakes – was crossed early this morning. Etihad have permission to go to 19.99% so with just over 10.5% at present they have some scope.
RIO Tinto Limited (A$59.22, +1.6%) iron ore site visit and loaded its first ship from its 290m/t expansion program. Within budget and ahead of schedule. Well done RIO.
Leighton Holdings Limited (A$17.59, +1.1%) secured a contract to redevelop the John Hunter Hospital in Hobart.
AMP Limited (A$4.69, -1.1%) Ex- dividend today but also announced a push into China with their funds management business joining with China Life asset Management in a new JV.
In economic news approvals for the construction of new homes rose 10.8 per cent across Australia in July, Australian Bureau of Statistics figures show, much better than the four per cent rise the market was expecting. And in housing Mortgage broker AFG today says some 49.5 per cent of its mortgages written in NSW last month were for property investors. Seems all that money on deposit is going somewhere after all.
Approvals for the construction of new homes rose 10.8 per cent across Australia in July, official figures show.
The TD Securities/Melbourne Institute Monthly Inflation Gauge was 0.1 per cent in August, following a 0.5 per cent rise in July and a flat result in June. The rate for the 12 months to August was 2.1 per cent, down from 2.7 per cent in July.
One online broker has worked out that over the 2012-13 financial year company profits recorded the biggest decline in records going back over 17 years, with profits down by 5.4 per cent. This is a twice the falls of the GFC period. It’s the resource sector that is to blame. And all those impairments! Economy is not too bad though and a shot of confidence may help things along.
Tomorrows News Today
US on holidays today for Labour Day which marks the end of the Hampton and Long Island festivities as the big Kahunas come back to Wall Street. September is shaping up as an interesting month.G20 Meeting ,Tapering, Syria, German elections and five years ago in September Lehmans collapsed.
Looks like it’s going to be a tough week in the US of arm twisting and posturing as John Kerry opens the debate on the alleged use by the Syrian regime of Sarin Nerve gas. It did look the US would be on its own on this issue. But now there are calls now for a recall of the UK parliament to have another vote as the evidence mounts. Pressure is on Cameron now too.
Vodafone and Verizon look to be sure to cement their $130bn deal ,Third largest M&A deal of all time!
India has been hit by a wave of growth downgrades, with many analysts predicting the slowdown to worsen in the coming months, after gross domestic product (GDP) figures on Friday showed second quarter expansion falling to lowest rate in four years.
And it seems that Putin is putting the Bootin to Obama about the US foreign policy.G20 meeting this week will be interesting. Obama last described Putin at a G8 meeting as a ‘bored teenager sitting at the back of the class’. I remember them well. Those guys could cause trouble though!
In further signs of the US recovery, the annual tooth survey revealed that children found an average of $3.70 under their pillows in 2013 – a whopping 23 % increase on 2012, when only $3.00 was left. Based on this rate of return, a child would net an impressive $74 for a full set of 20 baby teeth!
And the Seychelles has been named by the Jubilee debt Campaign as the country with the highest debt in the World at 150% of GDP, closely followed by Portugal ,Ireland Greece and Spain.UK was 98th!