Feeling any whiplash at all? Bit like the Grand ol’ Duke of York at the moment. When they were up they were up, and when they were down they were down. And today was the down after the rally yesterday. In the end we settled down 41 points at 5188 after touching 5161 and a high of 5230. Sadly, we are just a small dinghy getting tossed around on a sea of International troubles and forces. However we do manage to shoot ourselves in the foot. So many metaphors I am getting lost now! Todays’ disasters were Treasury Wine Estates Limited (A$3.64, -20.0%),Navitas Limited (A$6.57, +2.2%) and MCS. Fortescue Metals Group Ltd (A$5.23, -1.3%) also tried to get in on the act as they announced that due to the weather their production guidance would be at the lower end of the forecasts. Good rally off their lows saved the day though and helped sentiment with the other iron ore stocks. The theme of better performing resource stocks whilst banks underwhelm continues.
To the sectors Batman, let’s get the positive stocks out of the way. Telstra Corporation Limited (A$5.13, +0.6%) ,Westfield Group (A$10.15, +1.2%) and Ramsay Health Care Limited (A$43.87, +1.6%) were the best of the biggies while banks flopped as Australia and New Zealand Banking Group Limited (A$30.05, -1.1%) owned up to a glitch that seems to have cost them $70m.Most were off around 1%.Insurers also predictably fell, Insurance Australia Group Limited (A$5.50, -1.6%),Suncorp Group Limited (A$12.40, -1.1%) and QBE Insurance Group Limited (A$11.50, -0.9%) whilst big resource land suffered from Iron Ore prices slipping and weather related issues led by BHP Billiton Limited (A$36.69, -0.5%) and Atlas Iron Limited (A$1.015, -3.3%) although RIO Tinto Limited (A$65.80, unch) was relatively unscathed and Newcrest Mining Limited (A$9.66, +1.0%) even rallied. Other sectors in the dog house were energy Woodside Petroleum Limited (A$37.49, -1.0%),Oil Search Limited (A$8.08, -2.1%),Santos Limited (A$13.32, -1.3%) and Origin Energy Limited (A$13.94, -0.3%), consumer stocks like Metcash Limited (A$2.99, -1.3%),Wesfarmers Limited (A$42.00, -0.8%),Woolworths Limited (A$33.95, -0.2%) and Coca-Cola Amatil Limited (A$11.79, -0.9%). The IT sector was mixed Carsales.Com Limited (A$9.20, -0.2%),IRESS Limited (A$8.92, -1.3%),Codan Limited (A$0.955, -4.0%)Silex Systems Limited (A$2.05, -2.4%),Integrated Research Limited (A$1.17, -0.8%) all down and dirty whilst Melbourne IT Limited (A$1.375, +3.4%) bucked the trend as they were quoted Ex return of capital..
As usual mining services took things to heart, Leighton Holdings Limited (A$15.99, -1.9%),Seven Group Holdings Limited (A$7.66, -1.2%),Monadelphous Group Limited (A$15.88, -3.6%),Lycopodium Limited (A$4.29, -4.7%),Toll Holdings Limited (A$5.55, -3.0%). More bad news for #QAN Today as it has had to can a few Sydney/Melbourne London flights due to lack of interest. Building stocks were a bright spot with Csr Limited (A$2.97, +0.7%),Boral Limited (A$4.77, -0.4%),DLX# and Adelaide Brighton Limited (A$3.70, unch) also performing better than the overall market.
Expect tomorrow to be better with end of month buying and tarting up to benefit the index. For January, we are down around 3%! Not an auspicious start as we head into the all-important reporting season. Challenging times ahead! I cannot remember a period of so many downgrades from corporate Australia. It’s the new black!
Big winners today were few and far between but Golds stood out led by Beadell Resources Limited (A$0.74, +5.0%),Oceanagold Corporation (A$2.12, +5.0%), followed by Independence Group NL (A$3.33, +3.7%),#VED#,Western Areas Limited (A$2.62, +1.6%),Ramsay Health Care Limited (A$43.87, +1.6%),Lynas Corporation Limited (A$0.305, +1.7%) and Evolution Mining Limited (A$0.64, +4.9%) whilst joining Michelle and her team were #MCS#,Treasury Wine Estates Limited (A$3.64, -20.0%),Downer EDI Limited (A$4.83, -5.1%),Mount Gibson Iron Limited (A$1.02, -5.6%), FLN,REA Group Ltd (A$40.21, -4.9%) and Village Roadshow Limited (A$7.07, -4.6%). Volume was reasonable at over $4.4bn with the Aussie dollar 87.30 ,Bitcons $1055 and Gold $1262.
In lands far, far away ,Japan slumped as ‘Contagion’ seems to be the watch word at the moment. Nikkei down 380 points, Shanghai down 0.5% and Hong Kong off 1.5% in Chinese New Year shortened trading sessions.
Stocks and Stories
Treasury Wine Estates Limited (A$3.64, -20.0%) shocker. Sales suffering in their main markets of China ,US and also Australia. Oversupply and weak trading to blame apparently. This has been an ongoing saga for some time now. Think the only salvation is a tap on the shoulder. May happen. At least they can drown their sorrows in the boardroom.
Forge Group Limited (A$0.68, -17.1%) need a miracle to arrest the death spiral with more bad news on the doorstep. They couldn’t take one more step!
Navitas Limited (A$6.57, +2.2%) announced interim net profit figures of $36.1 million, up 3 per cent on previous year’s first half. That was despite revenue increasing 19 per cent to $421.9 million. The interim dividend is up 1c to 9.4c.
MCS today announced that they had been unsuccessful in a tender for Shells’ business. Given their safety record should not be a surprise.
Fortescue Metals Group Ltd (A$5.23, -1.3%) had originally promised to export between 127 million and 133 million tonnes in the 2014 financial year, but it today predicted that it would export exactly 127 million tonnes.
Beach Energy Limited (A$1.405, -2.1%) revised its production and capital expenditure forecasts. The company said stronger oil production volumes from the Western Flank, in the Cooper Basin, would maintain maximum capacity Production guidance for the 2013-14 financial year was upwardly revised to between 9.2 million and 9.6 million barrels of oil equivalent (mmboe).
Billabong International Limited (A$0.595, -4.0%) looked to have fallen into the hands of the hedge funds following a vote at the EGM.
Wotif.com Holdings Limited (A$2.41, -0.4%) Graeme Wood today announced his corporate philanthropy has ceased and he is closing his Global Mail news web site in Mid-February. Seems his wallet isn’t as big as it once was!
The Markit /HSBC final manufacturing PMI for January dipped to 49.5 from December’s 50.5, the first deterioration in six months. The figure was in line with the 49.6 reported in the preliminary version of the PMI released a week earlier.
New Home sales dipped slightly in December but still recorded their biggest rise since 2008.
Tomorrows News Today
More to come from FOMC fallout I suspect. Emerging market turmoil to continue. Russian Rouble at its lowest level. Argentina ouch! Turkey love those interest rates! Ukraine, Thailand, Syria, contagion anyone?
A Japanese Bio Tech team has found a way to make adult stem cells. Just add acid! So much quicker. Now for human trials but if successful will open Pandorra’s box.(Great line from Notting Hill on this one!) You thought we had an issue with ageing populations at the moment. Wait til we can regenerate like Dr Who. Cool. Anyone remember Logan’s Run?
And here’s a desperate moves as Qantas and Virgin rolls out unsolicited debit cards for 16 year olds!! Nice. Course it against the law but look for the Frequent Flyer Card in your letter box. Coming soon.
Global interest rates are on the rise. Beware. South Africa’s Reserve Bank surprised observers by boosting its main interest rate to 5.5% from 5%.
And in a possible move that makes me think the US isn’t as dumb as it looks, there is a movement to have Justin Bieber’s US visa rescinded for crimes against music.100,000 already signed. There must be more surely!