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A surprisingly quiet day with one eye on the FOMC meeting and the other on Chinese money market rates which pushed up to a four year high despite the People’s Popular Bank of Liberated Communist China adding $2.1bn to the system. The attempt to calm the markets appears to be too little, too late causing some confusion. Mainly about what a Plenum is! Here, we opened strongly with the banks and other financials taking heart from the ANZ number and commentary yesterday, but were unable to hold on to all the gains and closed off the highs at 5431.Let us not forget how big a run we have had in the last two weeks. Over 5%! National Australia Bank Limited (A$36.23, -1.2%) were the stand out faller in the financials while Westpac Banking Corporation (A$34.90, +0.9%), Australia and New Zealand Banking Group Limited (A$33.70, +0.2%) rose with Insurance Australia Group Limited (A$6.11, +2.9%) confirming FY14 guidance and helping the price in the process. In big resource land, they seem to have stalled a little. BHP Billiton Limited (A$37.67, +0.2%),RIO Tinto Limited (A$63.44, +0.0%) and Fortescue Metals Group Ltd (A$5.30, -0.4%) barely causing a ripple whilst other resources took a beating. Perseus Mining Limited (A$0.465, -12.3%) was singled out for special treatment as was Sims Metal Management Limited (A$10.04, -2.4%) and Evolution Mining Limited (A$0.845, -6.6%).

Telcos were in demand with Telstra Corporation Limited (A$5.17, +0.2%) continuing their run dragging Telecom Corporation of New Zealand Limited (A$2.02, +2.0%), TPG, BigAir Group Limited (A$0.84, +3.7%) and Hutchison Telecommunications (Australia) Limited (A$0.09, +2.3%) with them. Consumer stocks Wesfarmers Limited (A$42.28, +0.6%) and Woolworths Limited (A$34.85, +0.9%) shrugged off ACCC concerns on shopper dockets and pushed skyward whilst Crown Limited (A$16.65, +2.0%) did well too as their high rollers continue to pile into Macau. In building shares James Hardie Industries PLC (A$10.78, +1.7%),Fletcher Building Limited (A$8.35, +1.2%),Brickworks Limited (A$14.42, +0.6%),Duluxgroup Limited (A$5.14, +2.8%) rose, whilst Boral Limited (A$4.86, -0.6%) fell slightly. Energy stocks were better led by Woodside Petroleum Limited (A$38.84, +0.5%) and Origin Energy Limited (A$14.52, +1.8%) and so too were healthcare led by ResMed Inc. (A$5.44, +2.4%),Sonic Healthcare Limited (A$16.25, +2.7%) and bouncing nicely were Ansell Limited (A$19.61, +2.5%).Navitas Limited (A$5.58, -5.4%) continued to suffer after their underwhelming down grade a few days ago with disappointment on rising fixed costs offsetting better enrolments.

Unsaddling in the winners enclosure today and heading straight for the weigh in were  FKP Property Group (A$1.84, +4.0%),Transpacific Industries Group Ltd (A$1.09, +4.8%),Bega Cheese Limited (A$4.39, +5.3%),JB Hi-Fi Limited (A$21.29, +3.7%),Wotif.com Holdings Limited (A$4.47, +3.7%),Beach Energy Limited (A$1.39, +3.7%) and Mesoblast Limited (A$6.02, +3.1%) whilst heading to the knackery were golds and resource stocks like Evolution Mining Limited (A$0.845, -6.6%),Western Areas Limited (A$2.80, -3.8%),AGO#,Lynas Corporation Limited (A$0.335, -4.3%),Sims Metal Management Limited (A$10.04, -2.4%) and Oz Minerals Limited (A$3.57, -2.7%). Volume was still a little on the skinny side but nearly made $4bn!

Asian markets were generally firm though led by Japan (1%), China (0.6%) and Hong Kong. Only Thailand was down in the region.
Stocks and Stories

In house stocks today Orpheus Energy Limited (A$0.06, +3.4%) released their quarterly as did REY Resources Limited (A$0.085, -7.6%) with conference season kicking off as well with Roc Oil Company Limited (A$0.495, -1.0%) presenting at one today. Pharmaxis Ltd (A$0.13, +8.3%) had a good day. Shame it’s a rare thing as they elected to take full payment on their NovaQuest investment. Full $40m.

Market darling Sirius Resources NL (A$2.61, unch) has gone into a trading halt today as they seek to raise $83m.This will give a good indication of the level of interest out there. Watch this space.

Transpacific Industries Group Ltd (A$1.09, +4.8%) Waste management firm Transpacific Industries Group Ltd. is selling its New Zealand unit, aiming to fetch more than 900 million New Zealand dollars (US$853 million) to repay debt

JB Hi-Fi Limited (A$21.29, +3.7%) says it is on track to meet its full year sales targets as it continues to open new stores expands into the home appliances market. The company’s total sales rose by 8.1 per cent in the three months to September 30, while comparable sales growth in that period was 2.9 per cent, chief executive Terry Smart said.

Telstra Corporation Limited (A$5.17, +0.2%) is in court taking the NBN to task over the $11bn that it is supposed to get and when the payment should be index linked. TLS says 2012 NBN says 2011.Its only $100m after all.

Crown Limited (A$16.65, +2.0%) AGM today and seems that James has turned $600m into $6bn worth of Macau casinos. Much better than running NINE. No wonder he is smiling today.

Warrnambool Cheese & Butter Factory Co.Hold.Ltd (A$8.36, -5.0%) fell on hard times today as the blocking stake from Japan’s Lion was confirmed last night. We now have three bidders and a blocker! Lots more to come in this one!

Sales of new homes in Australia boasted their biggest monthly gain in September since April last year as low mortgage rates and the outlook for rising prices attracted more buyers, the Housing Industry Association (HIA) survey showed on Wednesday.
Tomorrows News Today

Rabobank has been fined $1bn.(Cue Dr Evil) for its part in the great LIEBOR deception. Hope it has been worth it! Cost the CEO his job. And in the PPI scandal in the UK Lloyds has now put aside 8bn quid in provisions for this one!

BlackRock chief Laurence Fink, whose company is the world’s largest money manager with $US4.1 trillion in assets, says US Federal Reserve policy is contributing to “bubble-like markets.”

“We have issues of an overzealous market again.” Irrational exuberance is back.

Should be interesting next year when the ECB conducts stress testing on Zombie banks in preparation to taking over responsibility for them. Suspect they will be a few stressed CEOs. But in true legal tradition, never ask a question you do not know the answer to. Would be surprised if there were any surprises by then.

China repo rate four month high! Seems inflation is alive and well though in India as the new Central bank chief has raised interest rates for the second consecutive month by a quarter of one % to 7.75% to try to fight inflation. Headline inflation at 6.46%

South Korea’s newest IPO has soared on its debut .Shares of train-maker Hyundai Rotem soar to 38,200 won.

And Kodak is back. After emerging from bankruptcy it will relist on Friday in the US. Meanwhile Blockbuster has called in the administrators again!

High profile currency guesser at Soc Gen has forecast the Aussie dollar could fall 25% to 0.72 by 2016 as the commodity bull market ends. Uncle Glenn must love this guy!

And latest NZ tech wonderstock Geo Op lists tomorrow at 10.30 NZ time. Another big fat Xero? Who knows.

 

Clarence

XXX

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