Looks like we are leading Wall Street rather than following today as a lacklustre start to trading turned negative on some profit taking before the unemployment numbers came through and offered a glimpse of lower rates ahead. The market took heart from this and started its climb to take out the 2013 high at 5252 but faded at the close for a up 8 day. Equity records are falling around the world as the central bank stimulus continues to push markets higher.
Gains were spread out across the board with a few stand out sectors and stocks. BHP Billiton Limited (A$36.60, +0.7%) did well but Fortescue Metals Group Ltd (A$4.66, -2.9%) slid a little whilst RIO Tinto Limited (A$64.28, +0.2%) went nowhere but financials had modest moves except for Macquarie Group Limited (A$49.40, +1.8%) which are heading for $50 but Telstra Corporation Limited (A$4.89, +1.2%) seemed to be a winner form the election and continued to power ahead as did consumer stocks like Woolworths Limited (A$34.63, +0.8%) and Wesfarmers Limited (A$41.50, +0.7%). Transport stocks also did well today with Qantas Airways Limited (A$1.455, +3.6%),Aurizon Holdings Limited (A$4.76, +1.9%),Toll Holdings Limited (A$5.72, +2.7%),Sydney Airport (A$3.80, +1.6%),Auckland International Airport Limited (A$2.86, +4.8%) and Brambles Limited (A$8.905, +1.4%).
In Golds Kingsgate Consolidated Limited (A$1.84, -5.6%) took another hit today as they took a real hammering, #NCN# as usual fell whilst one of the big winners in the resource sector was Cudeco Limited (A$2.11, +5.5%) although well off its morning highs. Energy stocks were better led by Woodside Petroleum Limited (A$38.77, +0.4%) ,Santos Limited (A$15.00, +1.1%),Oil Search Limited (A$8.50, +0.5%) and Sihayo Gold Limited (A$0.032, -20.0%).
On the podium today were Paladin Energy Ltd (A$0.595, +2.6%),NWS,Acrux Limited (A$3.31, +1.8%),Flight Centre Limited (A$50.46, +3.0%),Southern Cross Media Group Limited (A$1.875, +2.2%) and IRESS Limited (A$9.47, +3.2%) whilst out digging in the garden for their bones were Kingsgate Consolidated Limited (A$1.84, -5.6%), Myer Holdings Limited (A$2.765, -4.0%),Energy World Corporation Ltd (A$0.455, -3.2%),McMillan Shakespeare Limited (A$12.43, -3.4%),AP Eagers Limited (A$4.65, -3.1%),Premier Investments Limited (A$8.06, -2.8%),Monadelphous Group Limited (A$19.18, -2.4%) and Wotif.com Holdings Limited (A$4.60, -2.1%).
Volume was slightly better but still not the stuff that bull markets are really made of. But maybe this is the new normal.
Asian markets remained sloppy and mixed as we approach the weekend and a big week next week. We had some disappointing numbers out from Japan today as machinery orders rose 6.5% in July which was below the 7.7% that analysts were expecting. Shanghai was also wishy washy after Premier Li suggested that the recovery in China was fragile and there was still work to do.Indonesia is widely expected to hold its rates steady at 7% despite another hit to the Rupiah today.
Stocks and Stories
Cudeco Limited (A$2.11, +5.5%) had a good trot today after news yesterday that China Oceanwide was to seek FIRB approval to increase their holding up to 19.9%. Remember we are open for business boys!
Sigma Pharmaceuticals Limited (A$0.645, +1.6%) has seen its half-year profit fall 38 per cent despite managing to lift sales in a difficult trading environment. The drugs distributor and pharmacy owner made a net profit of $16.3 million for the six months to July 31, down from $26.1 million for the same period last year.
Ingenia Communities Group (A$0.445, +7.2%) came back from stasis after a $61m rights issue and managed to push ahead in a positive sign.
Boart Longyear Limited (A$0.50, -9.1%) announced a $300m revolving debt facility which did nothing to impress the market at all.
MYR has reported a full-year profit of $127.2 million, down 8.7 per cent from the previous corresponding period. Total sales were benign, up just 0.8 per cent. Bernie Brookes seemed to blame everyone but the company for its woes. Rents must come down however the issue always is if you slash rents then you slash valuations and a whole portfolio of property gets revalued. Sometimes its better to leave the shops empty I suspect. Not good having a commercial property margin call.
Blessed are the Cheese makers Warrnambool Cheese & Butter Factory Co.Hold.Ltd (A$5.75, +27.5%) as today they had a bid from Bega Cheese Limited (A$3.38, +7.3%) to buy the remaining 81% of the company. May yet see another player emerge in the game so we could see another all-out bidding war.
In economic news, The employment data is out today: the economy has shed 10,800 jobs, taking the unemployment rate to 5.8 per cent. The participation slipped to 65 per cent. Dollar fell back below 93 on hopes that the RBA will slacken rates again.
Tomorrows News Today
Now I know they are separate tubs of loot but Verizon has raised $49bn in the World’s biggest bond sale. But it does seem that there is a lot of money being raised recently. Australian Agricultural Company Limited (A$1.17, unch) has announced a $300m raise, lots of placements and rights issues. Many companies have been waiting and hanging out to tap the market for funds. It does tend to soak up liquidity. I know we have been given lots of dividends recently but expect more issues to come.So can we continue to push higher whilst we are pregnant with fund raisings? We shall see!
Facebook hits an all-time high! Zuckerberg says going public wasn’t so bad after all! Easy to say now!
After 250 years it looks like the plans to sell off the Royal Mail have finally come to pass. Apparently the sale is necessary to preserve the six day a week delivery and one price to deliver anywhere service.That and to be able to access capital markets. Suspect the newly privatised business will make a few changes. Unions are obviously against it. The sale is likely to value the business at £2bn-£3bn, suggesting up to 150,000 staff will receive £200m-£300m in shares. Signed, sealed, delivered I’m yours.
In extremely good news the latest instalment of Pirates of the Caribbean has been postponed indefinitely! Problems with the script apparently. You mean there was a script for the others?
Masters of the Universe Goldman ‘Sacks’ has urged its acolytes to charge into China following the recent good numbers. Chinese economic data suggests that the world’s second-largest economy is on track for a recovery. Industrial production rose 10.4 % on year in August to reach a 17-month high, while exports rose 7.2 % on year, beating Reuters’ forecast for a 6 % rise.
Next week we see the latest FOMC meeting together with Dutch Budget and German elections. Could be a good excuse for a slight pause to all this damned euphoria.