After a tentative start today where we bucked the positive overnight leads slipping to 5227, sense was restored as the optimism shone through, coupled with soothing words from the RBA. Not a stellar performance but enough to limp through 5250 just to close at 5251 up 3 points. Looks like rates are on hold and they have asked the Banks to be a little careful with who they give money to and not to stoke the property market too much. It’s a bit like asking a F1 driver to slow down round the bends, just not going to happen. Sorry Glenn! Once again though banks led the way as they push up to their all-time highs! The four banks combined are now trading at $171.80.Putting that in perspective, two years ago you could have bought them for $100!And the dividends as an added bonus. There are lots of commentators calling the sector expensive .How could they be expensive going from 100 to 172 in two years?
Resource stocks eased ahead of the Fed with BHP Billiton Limited (A$36.14, -0.4%),RIO Tinto Limited (A$62.76, -1.0%),Sims Metal Management Limited (A$9.96, -1.6%),Sirius Resources NL (A$2.67, -7.6%) all showing weakness together with energy stocks like Woodside Petroleum Limited (A$38.74, -0.4%) and Santos Limited (A$15.00, -0.7%). And once again Gold stocks were also in the dog house following a topsy-turvy trading session St Barbara Limited (A$0.555, -9.0%),Kingsgate Consolidated Limited (A$1.705, -4.7%),Newcrest Mining Limited (A$12.34, -2.3%),Resolute Mining Limited (A$0.645, -5.1%),Evolution Mining Limited (A$0.845, unch) and Medusa Mining Limited (A$2.08, -2.8%) suffering as Gold fell.
Industrials were a tad easier but only a flesh wound really, Wesfarmers Limited (A$41.63, -0.3%),Woolworths Limited (A$34.81, -0.5%),Csl Limited (A$65.45, -0.5%),Boral Limited (A$4.71, -1.3%),Ansell Limited (A$21.49, -2.7%),Sonic Healthcare Limited (A$15.85, -0.8%),Twenty-First Century Fox, Inc. (A$34.98, -0.9%),Leighton Holdings Limited (A$19.15, -1.8%) and Seek Limited (A$11.42, -2.0%) the stand outs.
Popping champagne in the spa today were Tpg Telecom Limited (A$4.23, +14.3%),Steamships Trading Company Limited (A$30.00, +7.3%),AIZ,Aquila Resources Limited (A$2.22, +1.8%),Karoon Gas Australia Limited (A$5.35, +3.5%),Mirvac Group (A$1.735, +2.7%) and Southern Cross Media Group Limited (A$1.865, +1.9%) whilst chowing down with the dog food were Regis Resources Limited (A$3.70, -7.5%),Sirius Resources NL (A$2.67, -7.6%),New Hope Corporation Limited (A$4.00, -6.8%),Beadell Resources Limited (A$0.775, -4.9%),MFF and VRT.
Volume was as usual uninspiring but we do have the FOMC meeting tonight so maybe things will pick up after that.
Asian market were a little in the Red today with most down around 0.5%.
Stocks and Stories
Company favourite Karoon Gas Australia Limited (A$5.35, +3.5%) had a good drilling result today with its Proteus 1 successfully flowing condensate bearing gas. And in other energy stocks news ,Orpheus Energy Limited (A$0.043, +19.4%) has secured port capacity in South Kalimantan for up to 3mtpa.
Fortescue Metals Group Ltd (A$4.62, +0.9%) have moved to redeem a $140m preference share using its strong cash flow to retire debt.
Results today from Tpg Telecom Limited (A$4.23, +14.3%) catapulted them into hyperspace. Bumper profits with NPAT up 64%,debt repaid and a big lift in dividends. Also helped Telstra Corporation Limited (A$4.92, +0.2%) and other Macquarie Telecom Group Limited (A$7.65, +1.2%),Singapore Telecommunications Limited (A$3.20, +2.6%) and Hutchison Telecommunications (Australia) Limited (A$0.044, +2.3%)
Regis Resources Limited (A$3.70, -7.5%) has more than doubled its full year profit, on boosted gold sales amid higher prices. The Perth-based gold miner increased profit after tax for the year to June 30 to $145.73, up from $68.24 million in the previous year. Gold sales more than doubled to 253 ounces, from 107 ounces during the same period. That helped to boost gold sales revenue by $245.8 million to $416.1 million.
Sales of new motor vehicles bounced in August after a sharp drop the previous month, with demand for sports utility vehicles staying healthy.Figures from the ABS show new vehicle sales rose 0.8 per cent to a seasonally adjusted 94,396 in August, from 93,633 in July.
Tomorrows News Today
Two former JPMorgan Chase & Co. traders were indicted for engaging in a scheme to hide trading losses that eventually surpassed $6.2 billion on wrong-way derivatives bets last year. Good to see they had a go!
Work is to begin on the largest tidal turbine energy project in Europe after the Scottish government approved it. MeyGen is to install the tidal array in stages in the Pentland Firth, between Orkney and the Scottish mainland.It will begin with a 9MW demonstration project of up to six turbines, with construction expected to take place on a phased basis until 2020.
If you thought all outsourcing was all done in India and the Philippines think again. The Russians are coming! This year, 16 of 24 finalists of Google’s annual Code Jam programming competition were from central and eastern Europe. The region also accounted for 8 of 13 winners at this year’s ACM International Collegiate Programming Contest sponsored by International Business Machines Corp. Seems after years working on missile systems they are now up for a more commercial approach!
The UK government has announced plans recently to sell the Royal Mail and now they are going to sell some of their holding in Lloyds Bank. During the grim and dark days of the GFC in the UK ,the Government moved to rescue Lloyds with a huge cash injection in return for equity. Now it’s time to exit some it seems. They look set to raise 3.3bn pounds.6% for sale ,taking them down to 33% holding.
William White now chairman of the OECD’s Economic Development and Review Committee, who was one of the only ones to spot the coming crisis back in 2007 has said that he thinks it’s even worse than back then..he thinks rising US interest rates will have a profound effect on capital markets around the World as the Tapering kicks in.
According to Forbes magazine the 400 wealthiest Americans are worth a record $2.02 trillion (£1.4tn), up from $1.7tn in 2012, a collective fortune slightly bigger than Russia’s economy.