A quiet day with no US markets last night to help us along due to Thanksgiving. Volume was exaggerated by the November option expiry yesterday but financials took a break, with the exception of National Australia Bank Limited (A$34.58, +0.1%) as the two big resource stocks pushed ahead. RIO Tinto Limited (A$66.06, +2.5%) announced the closure of its NT Alumina plant in Gove which helped the stock increase and BHP Billiton Limited (A$37.39, +0.5%) also pushed a bit higher after a dismal week. We finally limped out the week with a small loss of 14 points to close at 5320.
• Last Friday we closed at 5344 so for the week we are down 24 points or around 0.4% in a market dominated this week by the banks. As usual. Of course we have also seen some shockers this week from some AGMs and the Forge Group Limited (A$0.75, +9.5%) debacle and GrainCorp Limited (A$8.72, -22.1%). Seems that every hedge fund in the world is shorting our Golds and Mining services and it’s hard to blame them .Newcrest Mining Limited (A$7.69, unch) and its fellow gold miners have been whacked as gold continues to suffer from an “Annus Horribilis”. Looks like the mining services companies are about as popular as a Zombie at orgy. Blood everywhere. Seven Group Holdings Limited (A$7.24, -1.8%), NRW Holdings Limited (A$1.18, -1.7%),Boart Longyear Limited (A$0.30, unch) and Bradken Limited (A$5.55, -0.5%) continuing to slip away.
• In other sectors today energy was down led by Woodside Petroleum Limited (A$37.40, -2.0%) on fears of the overhang finding its way to market and the shaky oil price knocked Oil Search Limited (A$8.00, -2.0%),Origin Energy Limited (A$13.95, -1.4%),Santos Limited (A$14.00, -1.3%) and Beach Energy Limited (A$1.345, -0.4%).
• Smaller retailers were a tad better led by Specialty Fashion Group Limited (A$0.90, +8.4%) after taking out Rivers for $5m,Cash Converters International (A$0.855, +0.6%),ARB Corporation Limited (A$12.32, +1.0%) and RCG Corporation Limited (A$0.76, unch) whilst the big ones fell away with Harvey Norman Holdings Limited (A$3.23, unch),David Jones Limited (A$2.97, -1.7%),Myer Holdings Limited (A$2.85, unch) and JB Hi-Fi Limited (A$20.40, -2.3%) struggling today.Healthcare stocks also eased led by Starpharma Holdings Limited (A$0.82, -3.5%)
• Standing atop the podium today splashing the bubbles around were Fisher & Paykel Healthcare Corporation Limited (A$3.36, +6.0%),Atlas Iron Limited (A$1.145, +4.6%),Slater & Gordon Limited (A$4.40, +5.0%),Transfield Services Limited (A$1.135, +0.9%),Energy World Corporation Ltd (A$0.395, +3.9%),Oceanagold Corporation (A$1.795, +3.2%) and RIO Tinto Limited (A$66.06, +2.5%) whist in the pits having their tyres changed for wet weather running were GrainCorp Limited (A$8.72, -22.1%),Chorus Limited (A$1.36, -15.5%) of disapproval, United Overseas Australia Limited (A$0.60, unch),Ten Network Holdings Limited (A$0.29, unch),#AIZ#,Oz Minerals Limited (A$3.07, -3.2%),#OPNA# and JB Hi-Fi Limited (A$20.40, -2.3%).
• Aussie dollar looks like it is about to test the 90 cent level in the next few days as foreign investors take note of the domestic economy and our new found distrust of foreign investment unless Barnaby says its ok.3 month lows in the Aussie today.
• Asian markets faced their first monthly decline since August as Japanese inflation rose the most since 1998 under the new ‘Abenomic’ model. Consumer prices rose by 0.9% excluding food and unemployment remains rock steady at 4% with 98 jobs offered for every 100 people seeking work. Jobs for all! And the Nikkei at a six year high!
Stocks and Stories
• GrainCorp Limited (A$8.72, -22.1%) announcement this morning to coincide with Thanksgiving as the Treasurer Big Joe knocked back the US company Archer Daniels in its takeover ambitions. The decision was not due for another few weeks but he decided to try and sneak it through whilst the yanks were all carving up a turkey. Well it appears that GNC are one turkey they will not be able to carve up. Although hedge funds and shareholders will feel they have been stuffed and knifed.
• Forge Group Limited (A$0.75, +9.5%) continued to bobble around after their disastrous return to the boards yesterday. One now for the day traders and the computer traders to play with.
• RIO Tinto Limited (A$66.06, +2.5%) announced its hardly surprising decision to get the hell out of Gove. Our glorious leader has suggested they owe a moral debt to the people there. Not sure about that. Shows the dangerous of investing in a one horse town. though. At the stroke of a board room decision it can be all over red gover!
• Woodside Petroleum Limited (A$37.40, -2.0%) also fell hard today as media attention focussed on what Shell is going to do with their stake. The window to flog their $3.5bn stake is closing apparently as the IPO season floods the market.
• And the horror, a day went by without another bid for Warrnambool Cheese & Butter Factory Co.Hold.Ltd (A$9.25, -0.8%). Hard to believe I know but true. Maybe spoke too soon as Fonterra Shareholders’ Fund (A$5.88, +1.9%) has acquired a further stake in Bega Cheese Limited (A$4.68, -1.3%) to bring them to a slice under 10%.
• Channel NINE has finished its roadshow and seems happy with the level of interest. Time will tell. IPOs will be coming thick and fast in December with #MCS# one of the first off the rank with EBOS about to go live too.recent float #FLN# continue to slide after a dramatic opening a few weeks ago, although #ISU# improving as one broker ups their forecasts.
• Chorus Limited (A$1.36, -15.5%) fell away again today as it responded to an ASX speeding ticket .Did not seem to convince anyone.
• Ten Network Holdings Limited (A$0.29, unch) fell away again as news that brekkie guru Adam Boland has taken leave again didn’t help the stock. Seems there are only 23,000 people watching this early morning disaster.Maybe with Adam at home it will boost viewers to 23,001.Someone put it out of its misery.
Tomorrows News Today
• Half day trading for the US as they celebrate Black Friday. This is the day when consumers lose all sense of reality, open their wallets and just go for it. Music to the retailers ears!
• Indian GDP is due out and expected to show that Asia’s third largest economy grew 4.6 percent on year, according to a Reuters poll, following 4.4 percent growth in the previous three months.
• European leaders appear to have made no progress on reviving a landmark trade pact with Ukraine at the first day of an EU summit in Vilnius. Ukrainian President Viktor Yanukovich abruptly froze plans to sign the trade and reform deal last week, under pressure from Russia. Putin the bootin to the Opt-in. Now they are scrambling!
• The knock back of the ADM bid for GrainCorp is making headlines around the World. This at the same time that QAN is trying to get the Government to protect them from nasty overseas players. Good to see we are open to competition and business. And from a country with a very high uncompetitive cost base too. Just as well house prices are soaring.
• Things are heating up in the east China sea over the disputed islands as China is sending jets into the airspace to counter South Korean and Japanese planes. Maverick and Iceman are on their way! Roger that Goose
• And in the UK the “Gubernator” Carney has wound back one of the schemes that allows’ Funding for Lending’ to the housing sector seems to be a grudging admission that the UK property market has got somewhat overheated and that maybe one or two banks have been taking the mickey with their lax lending standards. You watching this Uncle Glenn? He wants lenders to focus on Small and medium sized businesses instead. Good luck!
• And while we are on housing , L J Hooker has appointed a Chinese Concierge service. Easy to see why?
• In the 2012-2013 financial year, Chinese nationals invested an estimated $5.4 billion in Australian real estate, according to Juwai.com research. Chinese investment in Australian property climbed 75 per cent over the most recent two years China is the third-largest source of visitors to Australia. The 120,000 Chinese students in Australia are more than any other nationality. Australia was the second most popular country for Chinese property hunters in August 2013, as measured in their activity on Juwai.com, after the USA and before the UK, Canada and Germany.
• Have a good weekend.