Another day of consolidation following a lacklustre lead from overseas markets as we consolidate recent gains. Financials continued to suffer given they are ex dividend and so the impetus to buy has diminished somewhat. All the majors were weaker today led by Westpac Banking Corporation (A$32.85, -0.8%) and National Australia Bank Limited (A$34.50, -0.2%) but Australia and New Zealand Banking Group Limited (A$32.11, -0.1%) managed to stay out of the firing line to some extent. The market opened strongly hitting a high of 5420 before it eased back to close up 6 at around 5393 having touched 5386 briefly. Resource stocks were in demand as the Aussie dollar fella way and Iron Ore continues to remain very strong relative to analyst’s forecasts. BHP Billiton Limited (A$38.03, +0.3%),Fortescue Metals Group Ltd (A$5.61, +3.1%) and Arrium Limited (A$1.52, +4.8%) were in heavy demand but RIO Tinto Limited (A$64.70, -0.6%) failed to inspire. Gold stocks fared better than expected with Newcrest Mining Limited (A$9.84, +1.0%) better today, but others trod water waiting for the next move. The big winner for the day was Orica Limited (A$23.60, +8.2%) as it piled on the gains following yesterday’s incredible short squeeze. Incitec Pivot Limited (A$2.80, +7.3%) also got dragged along for the ride following their results today.
• Telecom stocks rang the wrong number today as Chorus Limited (A$1.78, -2.7%) continued their impressive swan dive joined by Nextdc Limited (A$2.20, -7.2%),M2 Telecommunications Group Limited (A$6.16, -1.4%),iiNet Limited (A$6.27, -1.3%) and #TPG#. Retailers were generally a little mixed with Harvey Norman Holdings Limited (A$3.20, -2.4%) the stand out mover with Myer Holdings Limited (A$2.69, +0.4%),David Jones Limited (A$2.99, -1.0%),JB Hi-Fi Limited (A$22.09, +0.6%) all little changed. Property trusts were better with Stockland (A$4.07, +1.2%),Mirvac Group (A$1.795, +1.4%),GPT Group (A$3.75, +0.8%),Westfield Group (A$10.94, +0.2%),Goodman Group (A$5.02, +0.4%) and CFS Retail Property Trust Group (A$2.04, +1.0%) all to the good and drawing on improving sentiment for M&A activity for the sector and increasing real estate prices.
• Chomping on champagne and Caviar today were Incitec Pivot Limited (A$2.80, +7.3%),Orica Limited (A$23.60, +8.2%),Skilled Group Limited (A$3.66, +6.7%),REA Group Ltd (A$42.45, +6.1%),Arrium Limited (A$1.52,
+4.8%),Nufarm Limited (A$5.06, +3.7%),MGX# and #OFX# whilst eating cat food in the corner were Linc Energy Ltd (A$1.14, -6.6%),Ten Network Holdings Limited (A$0.255, -5.6%),Bega Cheese Limited (A$4.36, -3.5%),Washington H Soul Pattinson & Company Limited (A$14.34, -3.1%),Chorus Limited (A$1.78, -2.7%),Trade Me Group Limited (A$3.77, -2.3%) and Seven West Media Limited (A$2.30, -3.0%)
• Asian Markets were generally firm with Tokyo the stand out up 1.4%.Volume was once again nothing to write home about.
Stocks and Stories
• REA Group Ltd (A$42.45, +6.1%) also reported today as part of the News Corp quarterly filing revealing some pretty good numbers as they drive the asset bubble like they stole it.
• Incitec Pivot Limited (A$2.80, +7.3%) announced their full year report today with Net Profit After Tax (NPAT),including Individually Material Items (IMIs), of $372 million for the financial year ended
• 30 September 2013.NPAT, excluding IMIs, was $298.4 million. After adjusting the previous corresponding period for the Moranbah unfavourable contract liability release, this was a decrease of $64.3 million, or 18%
• Washington H Soul Pattinson & Company Limited (A$14.34, -3.1%) were hit today as independent directors of Brickworks Limited (A$13.59, -1.9%) voted against the proposal put forward by Perpetual and Mark Carnegie citing a numbers of key concerns mainly about tax rulings.
• Seems the slump in mining services continues with Seven Group Holdings Limited (A$7.59, -1.6%) cutting an additional 630 jobs in its WesTrac heavy machinery unit and says that the tough conditions in mining and construction markets mean earnings will be at the lower end of guidance.
• In house stocks today Buru Energy Limited (A$1.57, +3.6%) held their AGM,Roc Oil Company Limited (A$0.49, +5.4%) commenced test programme at the Balai Cluster and Intrepid Mines Limited (A$0.275, unch) appealed the decision in the Indonesian Court on their fight with Paul Willis for control of their vast copper project in Java. Should keep the lawyers happy for years to come. Better than Schapelle Corby!
• Credit card balances for the month fell to $48.8 billion from $48.9 billion in August, Reserve Bank statistics released today show. At the same time, credit card purchases rose in September to $22 billion from $21.8 billion in the previous month.
• In the Cheese wars big man Joe has unconditionally backed the Canadian bid for Warrnambool Cheese & Butter Factory Co.Hold.Ltd (A$8.54, +1.1%) saying ‘‘Australia is open for business and we welcome foreign investment when it is not contrary to the national interest”. Expect the same deal then for GrainCorp Limited (A$12.20, +0.1%). We shall see! Maybe a few concessions to the Nationals.
• Asciano Limited (A$5.81, +1.0%) says recent growth in coal haulage volumes should continue through to the end of 2013. Volumes in its’ Pacific National Coal business grew 16.5 per cent in the first quarter of the 2013-14 financial year, compared to the same quarter in the previous year.
• According to the National Bank survey Business confidence has fallen back from its Election feel good factor. Seems the tepid conditions that most companies have forecast are beginning to have an effect on confidence.
Tomorrows News Today
• China will cut its growth target to 7 per cent next year, the FT is reporting on its website, quoting a note by investment bank China International Capital Corp.
• Haven’t heard too much more out of the Plenum. Some thoughts on what might come out include plans to create a national social security system, reform state-owned enterprises, and create equal valuation of urban and rural land following the meeting.
• Good to see Clive Palmer though at the Press Club today on Sky TV.
• Rupert Murdoch’s News Corp has reported a modest profit for the three months to the end of September, but also saw falling revenues from advertising.The publisher of the Times and the Wall Street Journal said net income for the quarter was $27m (£16.9m).
• China’s ICBC was listed today on the list of “Too Big to Fail”.
• They say that when the taxi drivers start handing out share tips it is time to get out. Citigroup’s Panic/Euphoria model climbed to its highest level in nearly five years, to near euphoria territory, the bank said in a November 1 report. The Yale Crash Confidence Index which measures the retail punters attitude to a crash in the next six months is twitching as more than 30% of investors feel confident the stock market won’t crash within six months, after mostly languishing below that level since 2007.