• A firm but slow start to the week . After the usual strong start the market fell back slightly to close up 17 points at 5353.A broad ranged rally with the only exception being golds and energy stocks. Newcrest Mining Limited (A$8.26, -2.8%) continued to suffer and fell away further as did Beadell Resources Limited (A$0.76, -8.4%),Silver Lake Resources Limited (A$0.51, -8.9%),Evolution Mining Limited (A$0.605, -5.5%) and most of the stable. Energy stocks were under the kosh slightly as Iran looks set to return to the production game and putting pressure on the oil price going forward. Unusually financials weren’t the star children today with healthcare and Telcos doing well. Csl Limited (A$68.43, +0.8%),Ramsay Health Care Limited (A$39.01, +1.6%) and Sonic Healthcare Limited (A$17.10, +3.6%) all did well as did Telstra Corporation Limited (A$5.08, +0.4%) and Tpg Telecom Limited (A$4.23, +1.9%) and M2 Telecommunications Group Limited (A$6.09, +0.2%). Other industrials in the limelight today included Woolworths Limited (A$33.96, +0.6%), WESDA, James Hardie Industries PLC (A$12.22, +1.6%),Boral Limited (A$5.02, +1.6%),Duluxgroup Limited (A$5.61, +0.2%) and Nufarm Limited (A$5.05, +1.8%).
• Resource stocks were a tad higher as BHP Billiton Limited (A$37.89, +0.2%) put on a few cents as did Bluescope Steel Limited (A$5.77, +2.7%),Orica Limited (A$23.57, +2.0%),Fortescue Metals Group Ltd (A$5.82, +0.7%),RIO Tinto Limited (A$65.40, +0.2%) and Alumina Limited (A$0.975, +3.2%).
• Feeling good about themselves today were AAI, OFX ,Challenger Limited (A$6.31, +5.2%),Mesoblast Limited (A$6.02, +2.7%),Transfield Services Limited (A$1.28, +4.9%),Domino’s Pizza Enterprises Limited (A$16.17, +2.9%) and Csr Limited (A$2.74, +2.6%) whilst losing their religion were Goodman Fielder Limited (A$0.655, -7.1%),Beadell Resources Limited (A$0.76, -8.4%),ERM Power Limited (A$2.39, -4.0%),Aurora Oil & Gas Limited (A$2.96, -2.6%), FLN,Regis Resources Limited (A$3.00, -2.3%) and McMillan Shakespeare Limited (A$12.54, -2.0%).
• Volume was pathetic today with punters remaining glued to the sidelines, analysing the upcoming crop of siren like IPOs calling for the investment dollar. Supermodels were well and truly curled up in bed today. Asia continued to do well especially in Japan where they are rapidly caching up with the Dow and close to 16,000 too. Bitcons hit 880 bucks today!!!And the Aussie dollar under 91.50.
Stocks and Stories
• Warrnambool Cheese & Butter Factory Co.Hold.Ltd (A$9.23, +2.0%) Another day another bid, well maybe not a bid per se but at least the Mounties have sweetened the offer now giving punters $9.20 when they get over 50.1%.Looks more and more like the Mounties will get their man.
• Commonwealth Property Office Fund (A$1.265, unch) today the board of CMIL terminated their agreement with Dexus Property Group (A$1.06, +1.4%) and the Canadian Pension Plan Investment Board.
• Buru Energy Limited (A$1.48, -1.3%) and REY Resources Limited (A$0.105, +5.0%) concluded their seismic survey on their Fitzroy blocks. In other house stocks DWS Limited (A$1.33, -8.0%) held their AGM and announced some board and management changes. Seems the market was underwhelmed.
• Mesoblast Limited (A$6.02, +2.7%) today gave us an update on moves in Japan to provide an accelerated framework for approval of stem cell products.
• Aurizon Holdings Limited (A$4.74, +1.1%) has scaled back a proposed $6 billion rail development in Queensland’s Galilee basin with India’s GVK Hancock, now planning to build only 300 kilometres of new track instead of the 500 kilometres initially proposed to cut costs.
• ALS Limited (A$8.92, -2.2%) presented its half yearly results today which were in line.at around $90-100m bvut they failed to give any clarity going forward which was hardly surprising given the quicksand like conditions in the mining contracting business at the moment.
• AWE Limited (A$1.20, +0.8%) has today sold its 50 per cent stake in the Northwest Natuna PSC joint venture in Indonesia to operator Santos for about $205.50 million.
Tomorrow’s News today
• Looks like Rupert is not talking to Tony as it was revealed that his ex-wife Wedy was perhaps a little too close to Mr Blair.
• Few things out there of significance. Iranian nuclear deal will come at a good time for Obama as he is yet to sort out his high profile healthcare reforms. He could do with a win and he is looking more and more like a lame duck President.
• Lots of Japanese data this week, October retail sales, inflation, jobs, industrial production and household spending data are all on the calendar plus Indian GDP and of course its Thanksgiving on Thursday. No time to be a Turkey! Lots of Wall Street types will be thanking Uncle Ben this year.
• Oil Search Limited (A$8.30, -1.7%) will find out next month if the Papua New Guinea government can raise A$1.68 billion to avoid giving up its 14.6 per cent stake in the company to an Abu Dhabi state-owned wealth fund, which could then expose the company to a takeover tilt. If the PNG government is forced to give up its blocking stake in the Port Morseby-based Oil Search, it could provide a chance for the likes of ExxonMobil, France’s Total or Royal Dutch Shell to move in and attempt a takeover.
• This one seems to be slipping under the radar but China is not looking to build up its foreign reserves of Uncle Sam’s play money any more. Next they will say that they are not interested in US Treasuries.So if China is not lending to the US then who will. China has $3.66 Trillion of foreign reserves and $1.3 trillion of US debt, so it might be an idea to listen to these guys!
• And still in Asia, tension is increasing yet again over the disputed islands in the South China sea with Japan against China back on. Seems the new airspace rules are not going down well in Washington or Tokyo.Talk of an “escalation into the unexpected!”
• The NINE roadshow is well and truly underway in Melbourne today and Sydney at the end of the week. It’s believed Nine will commence trading in the $2.10 to $2.15 price per share range, giving Nine a price to earnings ratio of about 8.4 times. Cricket will help their ratings. Could not have come at a better time for them.
• Finally a couple of US hedge funds and Norwegian sovereign wealth fund have piled into bad bank Cinda in China,to be amongst the 10 cornerstone investors applying for 44% of this new IPO in a $2.5bn float.