15 November 2013

• After a disappointing start the market roused itself and powered up yet again led by the big green blob of financials. Seems the “Buy the Banks Die with the Banks” mantra is gaining some currency as the still very attractive yields ensure retail investors stick to the now familiar theme. Good gains in all four big ones together with the bit part players like Macquarie Group Limited (A$54.55, +1.7%),Suncorp Group Limited (A$13.36, +1.8%),Insurance Australia Group Limited (A$6.06, +1.2%),QBE Insurance Group Limited (A$15.52, +0.8%),Platinum Asset Management Limited (A$6.11, +3.6%) and Perpetual Limited (A$44.52, -0.1%). In the final analysis we closed up a respectable 46 points at 5400 which was a positive end to the week that was. Actually unchanged for the week!

• Resources were mixed at best with BHP Billiton Limited (A$37.89, +0.2%) going nowhere, RIO Tinto Limited (A$65.51, +0.6%) improved despite more issues in Mongolia, Fortescue Metals Group Ltd (A$5.84, +0.3%) trod water and Newcrest Mining Limited (A$9.60, +0.5%) fiddled about. Gold were mixed with Silver Lake Resources Limited (A$0.67, -1.5%) falling post AGM whilst Evolution Mining Limited (A$0.75, -2.6%) slipped away and Kingsgate Consolidated Limited (A$1.39, +1.1%) added a few pennies.

• In industry land Telstra Corporation Limited (A$5.17, +0.8%) had a positive day as they knock on the door of $5.20.News that Vodafone continue to lose customers can’t hurt them in the slightest. Other industrials also fared well with Asciano Limited (A$5.92, +3.7%)’Aurizon Holdings Limited (A$4.73, +1.7%)’Transurban Group (A$7.17, +1.1%)’Brambles Limited (A$9.34, +1.0%)’ALS Limited (A$9.78, +2.5%) and WESDA. Even Ten Network Holdings Limited (A$0.275, +5.8%) improved today as cost cutting seems to be the order of the day around there. Seems their Brekkie show is losing viewers faster than Vodafone does customers. Seriously. Retailers were still enjoying some ghost of Xmas to come spirit with Harvey Norman Holdings Limited (A$3.28, +0.3%),David Jones Limited (A$3.08, +0.7%),Myer Holdings Limited (A$2.92, -0.3%) and JB Hi-Fi Limited (A$21.80, +2.1%) all doing well as we get set for Dick and his float.

• Energy stocks also got a boost with Origin Energy Limited (A$14.53, +2.0%),Caltex Australia Limited (A$18.95, +2.7%),Oil Search Limited (A$8.51, +0.9%),Santos Limited (A$14.89, +1.1%) and Whitehaven Coal Limited (A$1.51, +0.7%) all going well.

• To finish the week we had some familiar winners in the enclosure today with Ainsworth Game Technology Limited (A$4.15, +5.1%),Fairfax Media Limited (A$0.61, +6.1%),Csr Limited (A$2.79, +5.3%),G8 Education Limited (A$3.22, +4.2%),Platinum Asset Management Limited (A$6.11, +3.6%) and Asciano Limited (A$5.92, +3.7%) whilst bringing up the rear today were Linc Energy Ltd (A$0.995, -11.9%) celebrating their last day on the ASX,GrainCorp Limited (A$11.70, -4.0%),Mermaid Marine Australia Limited (A$3.26, -7.4%)(report update)Evolution Mining Limited (A$0.75, -2.6%),Mesoblast Limited (A$6.00, -2.4%) and Incitec Pivot Limited (A$2.70, -3.6%)(profit taking).

• Volume was not enough to rouse a super model as we limped into the weekend. Asian markets were positive across the board with Japan especially firm as hopes for more money being thrown at their economy gather pace. China was also good showing a clean pair of heels, up around 2.3%.

Stocks and Stories

• G8 Education Limited (A$3.22, +4.2%) updated the market today suggesting that brokers were a little on the low side. Good for the stock as they sprinted ahead.

• Warrnambool Cheese & Butter Factory Co.Hold.Ltd (A$9.10, unch) Another day another bid it seems as the Canadian Mounties look to lob some more cash on the table. As they say the Mounties always get their man. They even have the nod from Big Joe.

• GrainCorp Limited (A$11.70, -4.0%) plummeted today as media reports swirled in WA that Tony Abbott was against the takeover or at least he would impose such conditions that the Yanks would walk away. The company moved to deny anything untoward but damage was done as hedge funds took their bat and balls and went home. Always a good sign and would suggest that astute investors revisit this story

• Origin Energy Limited (A$14.53, +2.0%) appoints Max(ine) Brenner to the board. Sweet.

• Macmahon Holdings Limited (A$0.13, -7.1%) held their AGM .Virgin Australia Holdings Limited (A$0.405, +1.7%) got their issue away to their big brother shareholders. The airline said this morning that institutional shareholders including Air New Zealand, Etihad and Singapore Airlines have taken up 98.4 per cent of their entitlements, raising $281.4 million.

• Linc Energy Ltd (A$0.995, -11.9%) limped off to Singapore as their last day listed on the ASX finished badly for them as investors didn’t like the thought of owning stock listed overseas.

• FLN the tech boom2.0 continues at a pace as Freelancer listed today. The online portal for getting web sites and graphics done cheaply from around the world opened with a valuation of $1bn.Must be a bull market. They had revenue of about $8m for the 6 months to June 30 and profits of around $350,000.But so much blue sky and so few shares. Brings back such fond memories of 2001.

• Mesoblast Limited (A$6.00, -2.4%) was a little weary following the AGM as recent in house float #RGS# continued to punch the lights out following their Doggy Cancer vaccine being approved in the US and have given investors a stunning return since listing at 25c.Congratulations to the team that brought this one home.

Tomorrow News Today

• And the Mad Hatter’s Tea Party has been called by Big Joe. In retribution for not passing his debt ceiling bill, he has called for a Tea Party on December 12th and to slash government services to teach them all a lesson. Thought he was serious for a moment. Says he is going to shut down Government services on that date unless he gets his $500bn limit. Good to see the circus is back. I was beginning to miss it.

• Big news of course is Janet Yellen her views on QEIV. Keep calm and print more money!

• Warren Buffett’s Berkshire Hathaway buys 40.1m shares in world’s largest publicly traded oil company Exxon Mobil.

• Moody’s has lowered its ratings on three big US banks, Morgan Stanley, Goldman Sucks and the home of the Whale, JP Morgan.

• India ground to a halt as Sanchin Tendulkar played his last game of cricket.

• Seems that hopes for the growth spurt in the second half have been dashed. Zombieland and the Japanese have let the side down again. Must try harder guys. Come on the US is keeping its part of the bargain and so is China.

• And we will all watch with fascination as Obama tries to fix his legacy policy of healthcare for all, after such a disastrous start with web site issues only part of the problem. You would think the most powerful man in the World would be able to get this right the first time. Doh!