A somewhat disappointing start to the week following a strong opening, the market failed to kick despite some good numbers and a special dividend for Westpac Banking Corporation (A$34.16, -1.2%). The bank sector decided to take some profits pre the RBA meeting and the Melbourne Cup tomorrow. Comments from the Fed’s Fisher, in Sydney today, regarding normal service being resumed as soon as possible hurt the optimism and we closed on our lows down 20 points to importantly under the magic 5400 level at 5390. Commonwealth Bank of Australia (A$76.10, +0.4%) was the only one in the red today although Macquarie Group Limited (A$53.90, +1.5%) continued its run followed by QBE Insurance Group Limited (A$14.76, +1.4%),Perpetual Limited (A$46.41, +2.0%),Henderson Group PLC. (A$3.70, +1.6%),Bt Investment Management Limited (A$5.28, +3.5%) and Westfield Group (A$10.83, +0.3%) in the property trust sector. In resource stocks today Fortescue Metals Group Ltd (A$5.32, +3.1%) was a shining light in a sea of red ink. The big Australian BHP Billiton Limited (A$37.52, unch) fell away as did Iluka Resources Limited (A$10.03, -0.9%) and the gold sector which suffered as Tapering talk emerges again in the US and the gold price has taken a hit. Big losses in the golds for Silver Lake Resources Limited (A$0.69, -5.5%),Beadell Resources Limited (A$0.88, -4.9%),Evolution Mining Limited (A$0.79, -2.5%),Kingsgate Consolidated Limited (A$1.395, -0.7%),St Barbara Limited (A$0.44, -4.3%) etc .
In industrials promising retail numbers helped David Jones Limited (A$3.03, +4.5%),Myer Holdings Limited (A$2.56, +2.4%),JB Hi-Fi Limited (A$21.58, +1.7%),Harvey Norman Holdings Limited (A$3.27, +1.2%) and Premier Investments Limited (A$7.93, +1.4%) whilst once again mining services slid with Bradken Limited (A$5.92, -2.3%),Monadelphous Group Limited (A$17.81, -1.9%) and Boart Longyear Limited (A$0.425, -2.3%). Healthcare also felt a little under the weather as Csl Limited (A$68.14, -0.9%) and ResMed Inc. (A$5.33, -2.0%) gave up some ground today.
Big winners today included #CIN#,Atlas Iron Limited (A$1.07, +5.4%),Bega Cheese Limited (A$5.05, +4.6%),David Jones Limited (A$3.03, +4.5%),#XRO#,Bt Investment Management Limited (A$5.28, +3.5%),Mount Gibson Iron Limited (A$0.91, +4.6%),SEA# and in the dunces corner were Hutchison Telecommunications (Australia) Limited (A$0.094, -21.7%),Beadell Resources Limited (A$0.88, -4.9%),Wotif.com Holdings Limited (A$4.15, -6.1%),Linc Energy Ltd (A$1.35, -1.5%),Peet Limited (A$1.41, -0.7%),Coca-Cola Amatil Limited (A$12.28, -4.7%) and Whitehaven Coal Limited (A$1.545, -3.7%). Volume today was suffering with under $3bn being a Monday before the RBA and the cup plus Japan was on holidays today for Culture day. Market was open though and fell 0.88% today .Shanghai: -0.1% South Korea: -0.6%.
Stocks and Stories
Westpac Banking Corporation (A$34.16, -1.2%) announced record profits again. Special Dividend and a rise in normal dividends. Have run pretty hard though hence the profit taking.
In house stocks today APN News & Media Limited (A$0.42, -8.7%) slid as did Wotif.com Holdings Limited (A$4.15, -6.1%) and Linc Energy Ltd (A$1.35, -1.5%) continued their love hate relationship with the market. More hate today I am afraid.Whilst Lynas Corporation Limited (A$0.34, +1.5%) which everyone loves to hate found some love today as it announced a $14m tax back from the Government for R&D.
Coca-Cola Amatil Limited (A$12.28, -4.7%) revealed no pick-up in consumer sentiment or sales and downgraded by around 5-7% today with Woolworths Limited (A$34.54, -0.9%) and Wesfarmers Limited (A$42.84, -0.3%) slipping a little too.
Bradken Limited (A$5.92, -2.3%) announced more earnings downgrades at the AGM .
Retailer Billabong International Limited (A$0.40, unch) announced this morning that $US300 million in funding from its new private equity partners, Centrebridge Partners and Oaktree Capital, had been received and used to repay a bridging facility.
Retails sales numbers today, spending at department stores rose a seasonally adjusted 2.8 per cent in September, while clothing sales rose by 2.5 per cent. Consumers also forked out for pharmaceuticals, cosmetic and toiletries, with spending growing by 3.1 per cent for the month. Cafes and takeaway foods was boosted by 0.6 per cent.
House prices surged especially in Sydney and Melbourne with a numbers out today showing Sydney recorded the strongest growth at 3.6 per cent for the September quarter. Melbourne prices rose by 1.9 per cent, Hobart by 1.4 per cent, and Brisbane by 1.2 per cent. House prices also lifted by 0.2 per cent in Perth and 0.4 per cent in Darwin for the September quarter.
Surging power prices have resulted in NSW government-owned electricity companies emerging as among the most profitable companies in Australia, as they boosted profits 50 per cent in the year to June.
Figures released by the NSW Audit Office show that the state government’s electricity companies boosted their combined profit to $1.54 billion in the year to June, up from $1.03 billion a year earlier.
Activity in China’s services sector expanded at the fastest pace in 13 months in October, offering further indications that the economy has stabilized, though activity in some important areas including new orders slowed.The official purchasing managers’ index (PMI) for the non-manufacturing sector rose to 56.3 in October from September’s 55.4, the National Bureau of Statistics said on Sunday.
Tomorrows News Today
A UK report has named the UK as the Western World’s fastest growing economy! Economic growth of 1.3% in the fourth quarter of 2014.IPO fever continues with Merlin Entertainment closing early in the UK on strong demand. Merlin owns Madame Tussauds and Alton Towers.
Twitter frenzy is coming. Only a few days to go until the big listing. Is this a rerun of 2001 or ….?Anyway the first day price will be very interesting. Price range of $17-20 with some estimates of First Day price of $26!
Monthly US jobs report will dominate this week. Expectation for a rise of 125,000 jobs created. Then it is the Chinese Plenum.
Real estate agents in the UK are salivating at the prospect of more finance reforms and the prospects of yet money coming to London for hedge funds and investment as the Worlds Capital of capital lines up its prospects of attracting more money. Consider this America, the world’s biggest economy, has savings of $2.8tn; China has more than $4tn. As a result, the impact of financial liberalisation in China will make the flow of funds into the West from Russian business men look inconsequential. Would be nice to attract some of those funds here. Watch this space.
Melbourne Cup tomorrow. Good Luck.