The market took a little while to warm up today after yesterday’s festivities. But a dismal start gave way to some buying to help us recover from overindulgence yesterday to close pretty flat down at 5433.A low of 5406 before rallying back. Good show everyone, well done. The iron ore stocks were the stand out as analysts are becoming somewhat more bullish on the outlook for China and restocking. Humble pie about to be consumed en masse I suspect by Iron Ore analysts around the globe. Big rise today in Atlas Iron Limited (A$1.17, +7.3%) after milling around for most of the day below $1.10 and BHP Billiton Limited (A$38.09, +0.6%) ,RIO Tinto Limited (A$65.60, +1.4%) and Fortescue Metals Group Ltd (A$5.84, +5.6%) also joined in whilst Arrium Limited (A$1.505, +3.4%) ,Mount Gibson Iron Limited (A$0.98, +4.8%),Northern Iron Limited (A$0.24, +23.1%),Grange Resources Limited (A$0.235, +11.9%) and Bluescope Steel Limited (A$5.13, +2.4%). Financials were dominated by Commonwealth Bank of Australia (A$77.96, +1.2%) hitting another record after their numbers today. The others failed though to join in with small losses in the Three Stooges, Westpac Banking Corporation (A$34.39, +0.1%),Australia and New Zealand Banking Group Limited (A$33.80, +unch) and National Australia Bank Limited (A$35.89, +0.3%).
Market darling #XRO# continues its unbelievable run with the stock now NZ’s third biggest company. One large investment bank today put out a research pie3ce valuing the company at over $45.Its small sister #GEO# in NZ also had another great day closing up 23%.Since listing a week or so ago at $1.00 they have blasted the lights out. Seems the “Land of the long white cloud”(computing) is the new silicon valley. Healthcare stocks took a sickie today with Csl Limited (A$67.41, -0.9%),ResMed Inc. (A$5.28, -2.0%),Cochlear Limited (A$56.45, -1.8%),Ramsay Health Care Limited (A$37.85, -1.4%),Mesoblast Limited (A$6.08, -3.6%) and Greencross Limited (A$6.42, -1.2%) all falling ill at the same time. Day after the Cup ,coincidence, surely not!
Gambling stocks were all down today led by some disappointing numbers from Crown Limited (A$16.70, -0.4%) on the Macau business. Seems the high rollers have be doing better than the house recently .Tatts Group Limited (A$3.16, -0.6%), TABCORP Holdings Limited (A$3.52, -1.4%),Echo Entertainment Group Limited (A$2.58, -2.3%) and Media stocks were weaker despite stories of The Sun King circling TEN. Seriously, why bother? Fairfax Media Limited (A$0.575, -4.2%), SWM, Ten Network Holdings Limited (A$0.28, -3.4%),Southern Cross Media Group Limited (A$1.70, -3.4%) and STW Communications Group Limited (A$1.485, -1.7%). Retailers were a mixed bunch today Kathmandu Holdings Limited (A$3.13, -4.0%) getting lost on a mountain somewhere, David Jones Limited (A$3.03, -1.6%), Harvey Norman Holdings Limited (A$3.24, -4.1%) and Premier Investments Limited (A$7.81, -2.0%) also suffering. Too many hangovers from the Birdcage perhaps.
Chatting to Gai in the winners enclosure today, included as always XRO (will they never stop!),Atlas Iron Limited (A$1.17, +7.3%),Lynas Corporation Limited (A$0.365, +4.3%),Oceanagold Corporation (A$1.925, +4.9%),Fortescue Metals Group Ltd (A$5.84, +5.6%),Mount Gibson Iron Limited (A$0.98, +4.8%),Karoon Gas Australia Limited (A$4.54, +2.9%) and Arrium Limited (A$1.505, +3.4%) whilst sitting this one out were Chorus Limited (A$2.04, -3.8%),United Overseas Australia Limited (A$0.54, -4.4%),Kathmandu Holdings Limited (A$3.13, -4.0%),Flexigroup Limited (A$4.50, -3.2%),Harvey Norman Holdings Limited (A$3.24, -4.1%),Qube Holdings Limited (A$2.07, -3.3%),Southern Cross Media Group Limited (A$1.70, -3.4%) and OFX.
Volume was somewhat better despite treading water pre the US jobs number on Friday. Close to $4bn with Asian markets slightly positive apart from Tokyo which was going great guns up over 1%,
Stocks and Stories
AMP Limited (A$4.66, -1.1%) announced a $200m bond issue today. Exciting I know.
Australia’s trade balance stayed in the red in September, with a deficit of $284 million, but lower than expectations of a $500 million deficit. That followed a shortfall of $693 million in August, the Australian Bureau of Statistics said During the month, exports were flat, while imports were down 1.0 per cent, the ABS said.
Twenty-First Century Fox, Inc. (A$35.91, -0.3%) released their first set of standalone numbers with a profit of $US1.3 billion in its first earnings report as an independent entity.The company, which holds the high-flying film and television assets of the former News Corp, had revenues of $US7.06 billion in the first fiscal quarter ended September 30.The profit was below most analyst forecasts and down 44 per cent from comparable figures a year earlier. Revenue was up 18 per cent from a year earlier and ahead of most projections.
Commonwealth Bank of Australia (A$77.96, +1.2%) Impressive numbers again and on track to deliver a full year of around $8.25bn! That is a lot of money from 25m people.$330 dollars each Man, Woman and Child on this island of ours! Asset quality continues to improve with bad debts declining 22% on 1H13 to $228 million in the quarter, representing just 16 basis points of gross loans outstanding.
In house stocks today mining service stocks continued to find few friends but unlucky for Chorus Limited (A$2.04, -3.8%) they got placed on credit watch by S&P which hurt them today. In fact the stock has had a tricky few days falling 10% recently.
Export volumes for iron ore – Australia’s single biggest export – are estimated to have risen about 16 per cent in 2013, with prices up 7 per cent compared to last year according to analysts.
Tomorrows News Today
Jobless numbers tomorrow here with expectations for a modest rise to 5.7% from 5.6%.
The mayor of Toronto has admitted that he smoked crack cocaine. I suspect some of our poliies have done the same judging by their performances in recent years.
And it’s going to be Twitter time on Thursday as the US greets its latest wunderkid with a massive valuation .Anyone remember myspace? Or Blackberry or Nokia?
EU competition regulators are preparing to fine six global banks including Deutsche Bank, JP Morgan and HSBC for suspected rigging of benchmark Eurozone interest rates. The penalties, which will also target Royal Bank of Scotland, Crédit Agricole and Société Générale,are the first from these guys to hit banks.
And in the land of the rising sun, Prime Minister Shinzo Abe’s plan to drive the economy, does seem to be gaining traction. Gross domestic product rose an annualized 3.8 % in the second quarter of 2013, following a 4.1 %rise in the first quarter. Meanwhile, Japan’s core consumer price index (CPI) climbed 0.7 % year on year in September, the fourth consecutive monthly rise. May need to try harder though with its astronomical debt pile – which currently stands at 240 % debt to GDP according to the International Monetary Fund (IMF) .Experts say it needs 4% growth for ten years to get out of this mess. This may be the elephant in the room.
And looks like the Germans are in the spotlight with the European Commission(EC) accusing them of running excess trade surpluses at the expense of EU partners The US has already told them to sort it out now it is the EC that will try to rein in their ambitions. Good luck with that as they are the paymasters and not sure they will take too kindly for being told what to do. They have some history with the rest of Europe after all.
The European Commission forecasts that Britain’s current account deficit — covering both trade in goods and services — will rise to 4.4pc of GDP in the 2014, with little improvement after that. This is the highest deficit of any major industrial country and shows that the boom in Britain is a throwback to rising house prices and rampant consumer borrowing to buy stuff. History just keeps on repeating!