Really? Is that it? After the deal we all knew was going to happen happened, we reacted with a slow hand clap and pushed 20 points higher in once again lacklustre(ish) trade .Still looking pretty good and an assault on 5300 is now only days away. To infinity and beyond?
The financials continued to shine. It is getting a very crowded trade now with Banks PE starting to get to internet style multiples. Now we all hope that the E of the PE is going to continue to punch the lights out with ever higher record profits but everyone is long these babies now. Big green blob soaring dragging Macquarie Group Limited (A$49.44, +1.0%),ASX Limited (A$35.09, +0.7%),AMP Limited (A$4.63, +0.7%),Challenger Limited (A$5.86, +3.4%) towards the heavens. Meanwhile back in the normal world big resources failed to launch with BHP Billiton Limited (A$35.80, +0.1%),RIO Tinto Limited (A$63.71, -0.6%) and Fortescue Metals Group Ltd (A$5.24, -3.0%) all proving their mortality. Others to come under the knife were Woolworths Limited (A$33.42, -1.2%) and Wesfarmers Limited (A$41.65, -0.3%) the former on reports that they were going to buy something in Asia. Always a potential graveyard for Australian corporates.
Another sectors in the lime light today included Healthcare with Csl Limited (A$67.30, +1.6%) and Ramsay Health Care Limited (A$36.20, +1.1%),Sigma Pharmaceuticals Limited (A$0.57, +2.7%) and Cochlear Limited (A$58.08, +1.1%) doing well. Industrials were mixed as Brambles Limited (A$9.48, +1.1%) continued their run, Boral Limited (A$5.03, +5.9%) did a deal (see below),Qantas Airways Limited (A$1.48, +3.1%) took off, #LEI # rallied and Transurban Group (A$7.02, -1.4%) fell a little. Energy stocks were better with the exception of Woodside Petroleum Limited (A$38.00, -1.3%) with Santos Limited (A$14.89, +1.1%),Maverick Drilling and Exploration Limited (A$0.525, +10.5%),Beach Energy Limited (A$1.35, +0.7%) and Beach Energy Limited (A$1.35, +0.7%) all to the good. Gaming stocks have been in the limelight recently but Crown Limited (A$16.52, -1.1%) whilst rivals EGP and TABCORP Holdings Limited (A$3.36, +2.1%) rose. Retailers mixed with Myer Holdings Limited (A$2.56, +2.0%),David Jones Limited (A$2.76, +0.4%) better whilst Harvey Norman Holdings Limited (A$3.18, -0.6%) and JBH# remained a little unloved. And in Telcos Telstra Corporation Limited (A$4.96, unch) are knocking on the door of $5 whilst Hutchison Telecommunications (Australia) Limited (A$0.105, -19.2%) fell in a heap. Loss of reception there perhaps!And the stock of the year XRO just keeps climbing! Incredible. Now the 7th biggest stock in the NZ index .$2.3bn market cap. Yet to make any money. But then who cares!
The big Cheshire cats today included #XRO#(when will they ever stop!!)Boral Limited (A$5.03, +5.9%),Linc Energy Ltd (A$1.43, +5.1%),ERM Power Limited (A$2.88, +4.7%),Sirius Resources NL (A$2.33, +3.6%),Pacific Brands Limited (A$0.755, +4.1%),Challenger Limited (A$5.86, +3.4%),#FKP and Bt Investment Management Limited (A$4.97, +2.5%). On the opposite side of the ledger were Hutchison Telecommunications (Australia) Limited (A$0.105, -19.2%),ARB Corporation Limited (A$11.50, -5.7%),Regis Resources Limited (A$3.44, -4.4%),Fortescue Metals Group Ltd (A$5.24, -3.0%),Ansell Limited (A$19.72, -3.0%) and Ten Network Holdings Limited (A$0.285, -1.7%) seriously!
Volume was slightly better at around $4bn but hardly the stuff that lights my fire. Come on baby! Around the grounds in Asia 1% up in the land of the rising sun, but half as much in HK and China.
Stocks and Stories
Ten Network Holdings Limited (A$0.285, -1.7%) results today. Nasty as usual.Net loss of $285m after charges. Nothing to see here .Move along!
Takeover stock Warrnambool Cheese & Butter Factory Co.Hold.Ltd (A$7.42, +2.9%) pushed higher as the board issued their target statement yesterday and suggested that they were undervalued. Nice picture of cows on the front cover too.
BOR we have lift off as the company announced news on a big JV on plasterboard with USG.
Welcome to the house of FUM. Challenger Limited (A$5.86, +3.4%) announced a huge lift in assets under management today or FUM as its known.$46bn an increase of 31% for the last twelve months and up 3% for the quarter. Maybe AMP Limited (A$4.63, +0.7%) to feel the same love?
Atlas Iron Limited (A$1.035, -1.0%) Atlas Iron says it’s going through a good patch thanks to buoyant iron ore prices and a record boost in production. Chairman David Flanagan says the company is making solid margins as it posts an eight per cent increase in ore shipments in the September quarter.
In more Iron ore news, Fortescue Metals Group Ltd (A$5.24, -3.0%) says it is on track to achieve full year guidance around iron ore exports, production costs and capital spending. The iron ore miner shipped 25.9 million tonnes during the September quarter, with just 1.2 million tonnes of that belonging to joint venture partner BC Iron. That was 4 per cent better than the June quarter and means Fortescue remains on track to export between 127 million and 133 million tonnes of iron ore in fiscal 2014.
Woodside Petroleum Limited (A$38.00, -1.3%) also eased as their third quarter report was a little underwhelming . Woodside Petroleum has posted a 27 per cent drop in third-quarter sales after a temporary interruption at its Pluto liquefied natural gas project.
Revenue declined to $1.34 billion, from $1.83 billion a year earlier.
And spare a thought for hapless Newcrest Mining Limited (A$10.14, -0.6%) as their fight with the ATO has resulted in them losing. Today they threw in the towel and have written off another $120m on the ill-fated, ill-timed, ill-conceived Lihir purchase .Time for a bonus guys!
Tomorrows News Today
Credit card limit extended. That will do nicely.
Weekend at Bernies’ is back again as the US tries to prove he didn’t act alone. The US government made the claims at the start of a five-week trial, in which it will try to prove that Madoff did not act alone in running the biggest Ponzi scheme ever discovered. Home alone eh Bernie?
According to an article in the FT China has more than 1,000 steel mills and produces roughly half the world’s output. There is so much overcapacity that profitability last year was an atom-thin 0.04 per cent.
The online auction and retail giant, eBay, has delivered a lower-than-expected sales and profit forecast for its fourth quarter. Blaming slowing growth in online shopping rates in the US, the firm said it expected sales of between $4.5bn (£2.8bn) and $4.6bn for the holiday period.
Bank of America has reported a profit of $2.5bn (£1.6bn) in the July-September period, compared to $340m a year earlier. However, the earnings still missed analyst expectations, as US mortgage sales declined.
Apple is cutting production orders for its plastic-backed iPhone 5C a month after launch, fuelling speculation the cheaper model of its main gadget may have been priced too high. Really? Plastic phone for how much?
And finally JP Morgan has been fined $100m by US authorities with them citing Traders acting recklessly.