Another strong start to the week in what is shaping up to be a very sustained run now. After a very strong start, the market fell back a little to close at 5351 up nearly 0.6% with financials once again leading the way. The market has now bounced nearly 71% since its 2008 lows and looks set for a good Xmas with Santa working his Reindeer into a bullish frenzy. AMP Limited (A$4.75, +1.7%) stood out as did Macquarie Group Limited (A$51.00, +1.7%) with five year highs in Australia and New Zealand Banking Group Limited (A$32.12, +0.8%) also dominating. Other banks were also strong but a little off their highs with Commonwealth Bank of Australia (A$74.55, +0.5%) peaking at $74.75 and National Australia Bank Limited (A$35.97, unch) at $36.43,another close to five year high .Henderson Group PLC. (A$3.46, +1.8%) and Challenger Limited (A$5.89, +2.8%) also pushed ahead as did QBE Insurance Group Limited (A$14.70, +0.8%) and Suncorp Group Limited (A$13.18, +0.7%).
Other stocks that were in the spotlight were Woolworths Limited (A$34.77, +2.4%) following their Asian pull-out. In resource stocks BHP Billiton Limited (A$36.20, +1.3%) drew some friends as did Fortescue Metals Group Ltd (A$5.45, +2.8%),Arrium Limited (A$1.455, +6.6%),Bluescope Steel Limited (A$5.03, +2.2%),Sundance Resources Limited (A$0.13, +31.3%) and Sims Metal Management Limited (A$10.30, +2.7%). The only Iron Ore stock that does seem to be stuttering is Atlas Iron Limited (A$0.99, unch) at the moment however they have done pretty well recently so maybe it’s to be expected. Gold stocks held relatively steady given the falls on the shiny stuff. Silver Lake Resources Limited (A$0.68, -2.9%),Newcrest Mining Limited (A$10.76, +0.7%),Evolution Mining Limited (A$0.80, +1.3%),Beadell Resources Limited (A$0.90, +2.3%) and Kingsgate Consolidated Limited (A$1.52, -1.9%). Energy stocks were also in demand with Woodside Petroleum Limited (A$38.34, +0.5%), Santos Limited (A$14.89, +0.9%),Buru Energy Limited (A$1.645, +1.9%),Beach Energy Limited (A$1.39, +1.5%) and WorleyParsons Limited (A$22.59, +0.8%).
Industrials continued to firm today led by Brambles Limited (A$9.61, +0.8%), Downer EDI Limited (A$5.15, +3.8%) Reece Australia Limited (A$27.39, +2.1%) and Seven Group Holdings Limited (A$8.42, +1.9%). In gaming stocks Crown Limited (A$17.15, +2.4%), Aristocrat Leisure Limited (A$4.85, +1.3%), TABCORP Holdings Limited (A$3.53, +2.0%),Echo Entertainment Group Limited (A$2.68, +0.4%) and Ainsworth Game Technology Limited (A$4.33, +0.5%) all drew strength from the optimism on more local licences and the influx of Chinese gambling dollars. There were only a few red spots in the market today with Csl Limited (A$67.84, -0.8%) and other healthcare stocks like Mesoblast Limited (A$6.07, -1.5%) and Fisher & Paykel Healthcare Corporation Limited (A$3.05, -0.7%). Qantas Airways Limited (A$1.35, -5.6%) fell today as reports of lack of profitability hurt the airline.
Big grinners today included Linc Energy Ltd (A$1.74, +12.3%),FKP Property Group (A$1.87, +10.3%),Arrium Limited (A$1.455, +6.6%),Bega Cheese Limited (A$4.08, +5.2%),Aquila Resources Limited (A$2.35, +4.4%),Downer EDI Limited (A$5.15, +3.8%) and MYT whilst following up the rear were Hutchison Telecommunications (Australia) Limited (A$0.097, -7.6%),Energy World Corporation Ltd (A$0.455, -4.2%),Qantas Airways Limited (A$1.35, -5.6%),Ten Network Holdings Limited (A$0.27, -3.6%), XRO (finally),Panaust Limited (A$1.975, -2.7%),Mesoblast Limited (A$6.07, -1.5%) and Lynas Corporation Limited (A$0.36, -2.7%).
Volume was below par for a Monday with it just topping $3bn.Asian markets were firm with China up 1.3%,Hong Kong up 0.5% and Tokyo up 0.3%.Aussie dollar continues its march to parity up around 96.70 against the US.
Stocks and Stories
In house stocks today CSS received an R&D refund, helping sentiment. Linc Energy Ltd (A$1.74, +12.3%) continue to plunge ahead after good news in recent weeks and the market settling after the announcement to list in Singapore.
Another spectacular day for Cudeco Limited (A$2.34, +8.3%) following their historic financing deal with the Chinese last week. Shorters once again being hurt as the stock punishes their misplaced pessimism.
Iluka Resources Limited (A$10.02, +2.0%) released an investor relations app for iPads today. Not completely sure it’s going to beat Angry Birds though .Maybe Angry Holders is the title. Still check it out if you are really, really desperate.
FKP Property Group (A$1.87, +10.3%) has continued with its restructure into a pure-play local retirement owner and operator with the sale of a stake in a New Zealand business.
AAPT has been put up for auction by its parent company Telecom New Zealand. Goldman Sachs is understood to be managing the deal, which could be worth over $400 million.
Japan’s trade deficit in September has surged 64.1 per cent from a year earlier, extending its string of shortfalls to a record 15th consecutive month.
Tomorrows News Today
It’s going to be a catch up week after the US closedown when no economic numbers were released. The closely-watched non-farm payrolls figure for September due for release on Tuesday and consensus is for 180,000 new jobs to have been created.
Seems we are not the only ones living in a property bubble. London has gone really silly as the French leave Paris faster than you can say Adieu and the Russian Mafia snaps up properties coupled with the enriched Chinese. Leading property website Rightmove says London house prices have soared to a new high this month, beating their previous record by nearly STG30,000 ($A50,479) and fuelling fears that the capital is overheating. According to the website, asking prices in London saw an ‘‘unsustainable’’ 10 per cent month-on-month increase in October.
Good to see some of the even bigger to fail US investment banks now being slapped with massive fines for their dodgy practices pre GFC.JP Morgan looks like it’s gone for $13bn and now Bank of America is in the firing line for a $3bn hit. At this rate the banks will be undercapitalised and the Fed will have to bail them out! Not sure anyone mentions BASEL II anymore.
Google shares have topped $1,000 (£617) for the first time, jumping 13.8% on Friday after the company reported better-than-expected earnings.
This is quite big news in the Nuclear world. A deal to build Britain’s first new nuclear plant in a generation is due to be announced today. The government has been in negotiations with French-owned EDF Energy over the Hinkley Point C project for more than a year .May help sentiment a little for a much maligned industry.
Japan’s net government debt is about 140pc of GDP. This is way ahead of the US, which is on 87pc, and not that far below Greece. What’s more, it is easy to see the ratio increasing further. The IMF expects net debt to rise to 148pc of GDP over the next five years. That’s ¥1,000,000,000,000,000 – or a quadrillion, at this rate it’s soon going to be serious money!
That is all