Another day when the resources outperformed by a country mile. This theme is starting to gather some momentum even some of the big houses like Citi are now jumping on the bandwagon. Of course we have been talking this for a while now so it’s good to see them play catch up. Good gains today from BHP Billiton Limited (A$37.89, +2.9%),RIO Tinto Limited (A$66.32, +1.1%),Fortescue Metals Group Ltd (A$5.68, +2.7%) and the like helped negate some of the downward pressure on the banks and other defensives. Yesterdays’ heroes!
Following a weak lead from NY and disappointment in the finance sector, it was hardly surprising that our big four came under pressure. National Australia Bank Limited (A$33.74, -1.0%) was the worst affected with Commonwealth Bank of Australia (A$75.47, -0.4%) not looking too flash either. Other financials also eased back with Platinum Asset Management Limited (A$6.73, -1.3%),Suncorp Group Limited (A$13.03, -0.8%),QBE Insurance Group Limited (A$11.60, -1.1%),AMP Limited (A$4.49, -0.2%),Challenger Limited (A$6.21, -1.6%) and Macquarie Group Limited (A$53.96, -0.2%) all a little on the nose. Defensives also suffered some slings and arrows with the w’s,Wesfarmers Limited (A$43.70, -0.4%), Woolworths Limited (A$34.19, -0.1%) and Westfield Group (A$10.20, -1.0%) failing to find any friends.
In the industrial space, retailers took a hammering on the Super Retail news with David Jones Limited (A$3.06, -2.9%),JB Hi-Fi Limited (A$20.25, -3.5%),Kathmandu Holdings Limited (A$3.06, -5.0%),#PMD#,Myer Holdings Limited (A$2.66, -2.2%) and Harvey Norman Holdings Limited (A$3.26, +0.3%) all getting tarred with the same brush.‘Rien ne va plus’ as gaming stocks also eased back with Crown Resorts Limited (A$17.60, -1.7%),TABCORP Holdings Limited (A$3.53, -1.9%),Aristocrat Leisure Limited (A$4.42, -0.5%) and Echo Entertainment Group Limited (A$2.43, -1.2%) coming up on red. Building stocks also fell with Adelaide Brighton Limited (A$3.75, -2.3%),James Hardie Industries PLC (A$13.17, -2.4%),Csr Limited (A$2.88, +0.3%) and Boral Limited (A$4.80, -1.8%) .
Big cheesy grins today for Beadell Resources Limited (A$0.835, +4.4%),Hutchison Telecommunications (Australia) Limited (A$0.085, +4.9%),New Hope Corporation Limited (A$3.58, +5.0%),Orora Limited (A$1.38, +4.5%),Orica Limited (A$24.78, +3.4%),Bluescope Steel Limited (A$5.78, +3.2%),Yancoal Australia Limited (A$0.72, +2.9%) and Paladin Energy Ltd (A$0.56, +13.1%) whilst in the dummy corner were Super Retail Group Limited (A$10.79, -14.2%) (now looking Super Cheaper) Abacus Property Group (A$2.30, -4.6%),ARB Corporation Limited (A$11.36, -5.3%),Pacific Brands Limited (A$0.605, -4.0%),Myer Holdings Limited (A$2.66, -2.2%) and Mesoblast Limited (A$5.85, -3.1%).
Asian markets are a smidge off with the MSCI Asia down around 0.3% with Shanghai down 0.7% as the IPO markets starts up again in China after a long hiatus.Neway the first IPO for more than a year rose 20% today.
For the week we are down 6 points after today’s fall of 3.2 to 5305.Good rally into the close again today, but not much overall movement however the tide on resource stocks is definitely turning and this trend may be the start of a significant move in the markets. The dogs are barking ,”Woof,Woof!”
Volume today was still on the skimpy side at around $3.7bn but things will be back to normal next week. The Aussie dollar was still slightly above the 88 cents whilst my favourite tulip , “bitcon” was trading around 1024 AUD.
Stocks and Stories
Shocker of the day was Super Retail Group Limited (A$10.79, -14.2%) which fessed up to a disappointing sales picture in the last six months . Ouch! Now really Super Cheap.One of the problems that market darlings have is if they fly too close to the sun and fail, they are severely burnt.
Following hot on the heels of a promising production report from Paladin Energy Ltd (A$0.56, +13.1%) ,today they announced a refinancing package of their Langer Heinrich project. They are hoping to save US$5.5m on debt repayments per annum.All helps. Everything is heading in the right direction with this one as Japan opens a couple of reactors too. Worst looks to be over and the rally could move ahead much further.
Analysts have upgraded their RIO Tinto Limited (A$66.32, +1.1%) numbers with a 12 month price target now between 80 and 90 bucks. Good production numbers cited with plenty more upside to come.
Tomorrows News Today
Overall spending by Chinese high net worth individuals slipped 15 per cent from a year ago “whilst spending on gift-giving is down a dramatic 25 per cent according to one survey. Australia remains the favoured destination for wealthy Chinese and travel is their favourite way to spend their money.
Lui Che-Woo, founder of casino operator Galaxy Entertainment Group Ltd., became Asia’s richest person yesterday eclipsing Hong Kong real estate investor Li Ka-Shing, according to the Bloomberg Billionaires Index. The gambling mogul’s net worth has risen by $3.5 billion this year to $29.6 billion.
Google has said it is testing a “smart contact lens” that can help measure glucose levels in tears. It uses a “tiny” wireless chip and a “miniaturised” glucose sensor embedded between two layers of lens material. Almost enough to make you cry!
Goldman Sachs pays employees average of $383,000 after profits rise 5%.The real “Wolf of Wall Street”.
China Mobile starts selling iPhones. The most significant development since they were introduced.
Australia’s Cooper Basin has the most attractive shale gas prospects outside North America, according to Magnum Hunter Resources, the oil and gas producer with acreage in some of the biggest shale areas in the U.S.
Numbers out from China on the 20th expect to show China’s factory output and investment growth probably weakened in December, adding to signs the world’s second-largest economy is losing momentum as analysts forecast 2014 expansion at the lowest in 24 years.
Good to see a former Dutch finance minister getting into drag and comparing banking with the world’s oldest profession ! Gotta love the Dutch!
Have a great weekend.!