It was the best of times. It was the worst of times. On a day when two significant job loss events hit the market it was left to BHP Billiton Limited (A$38.89, +2.3%) to bolt out of the gates following better than expected numbers. Numbers were better than the analysts had been expecting .I have been expecting good ones for some months though. RIO Tinto Limited (A$70.88, +1.9%) and Fortescue Metals Group Ltd (A$5.98, +2.7%) joined in but the big bank blob of green was a little mixed today. Westpac Banking Corporation (A$32.86, -0.2%) were down while National Australia Bank Limited (A$35.04, +0.8%) improved and Macquarie Group Limited (A$55.99, +0.7%) continued their predicted bounce. So that was the best of times. The news from Alcoa on the closure of Point Henry together with the decimation of newly listed #MCS# business due to pesky government inspections was the worst of times. Over 1500 job losses announced by these two today in a bleak reminder of the cost of management failure and international competitiveness.
So to the scores on the doors. The market flirted with positive numbers all day mainly as a result of the ninth straight day of rallies for BHP and continued strength in Telstra Corporation Limited (A$5.23, +0.2%). Most moves were confined to those reporting and the ASX 200 closed up slightly at 5302 up 9 after a surge on the death, having traded in a tight range. Coca-Cola Amatil Limited (A$11.22, -5.3%) results knocked the consumer stocks a little with Woolworths Limited (A$35.68, +0.2%) and Wesfarmers Limited (A$43.40, -0.4%) falling slightly and healthcare stocks better led by Csl Limited (A$69.71, +0.7%),Ramsay Health Care Limited (A$43.62, +0.9%) and Fisher & Paykel Healthcare Corporation Limited (A$3.86, +2.4%). And in retailers, place your bets, David Jones Limited (A$3.23, +2.2%) or Myer Holdings Limited (A$2.47, -1.2%) round and round they go ,where it ends no one knows!
Gold stocks took a breather as their moment seems to have passed for the time being. Silver Lake Resources Limited (A$0.69, -8.0%),Newcrest Mining Limited (A$11.26, -1.7%),Evolution Mining Limited (A$0.855, -2.8%),BDR# and Kingsgate Consolidated Limited (A$1.35, -12.6%) in the dog house today.
Big grinners today included Monadelphous Group Limited (A$17.10, +9.7%),Sirtex Medical Limited (A$14.96, +3.8%),#SDF#,Domino’s Pizza Enterprises Limited (A$20.56, +2.9%)(again),Challenger Limited (A$6.61, +3.3%),Ardent Leisure Group (A$2.18, +3.3%), and G8 Education Limited (A$3.95, +3.4%) whilst hanging out with Big Kev in the ‘Biggest Loser’ episode was Pacific Brands Limited (A$0.655, -9.0%)(more write downs on their comfy undies),Hutchison Telecommunications (Australia) Limited (A$0.10, -9.1%),#GWA Group Limited (A$2.88, -8.6%),Panaust Limited (A$2.02, -3.3%),Evolution Mining Limited (A$0.855, -2.8%) and Sirius Resources NL (A$2.50, -4.6%).
Volume was again pretty good at around $4.5bn and the Aussie remained relatively stable at 90.56 and the Digital Tuiip bounced back to $380.Gold was a little easier in Asia at around $1322.Japan was back in the money printing business as the BOJ announced that they pledged to expand the monetary base by 60 trillion to 70 trillion yen ($686 billion) per year. This was enough to get things back on track in the Nikkei up 2.5% whilst HK was steady and Shanghai slipped a fraction.
Stocks and Stories
BHP Billiton Limited (A$38.89, +2.3%) cannot believe the numbers were a surprise but they were, it appears as the Big Aussie flexed its muscle with a near $8bn profit. Pretty fly for a white guy. A clear improvement on the $US5.68 billion from last year.US 59 cents dividend a little underwhelming but the stock is trading at a one year high! No sign of a buyback or special but thems the breaks. Still good enough I suspect to get them up a tad more.
MCS Job cuts and the sale of half its trucks together with a $47 million hit to its full-year earnings from the crackdown on the troubled fuel-haulage business. Good to see that Mark Rowsthorn can add another disaster to his CV. Asciano and now McAlesse.
Challenger Limited (A$6.61, +3.3%) Challenger, has posted a 10 per cent increase in profit to $163.5 million for the six months to December 31, 2013, as annuities sales and funds under management surged.
Amcor Limited (A$10.33, -4.2%) Disappointing reaction to the numbers today. On first glance I thought it was a solid result. Earnings up bolstered by recent acquisitions and strong growth in emerging markets. Sales revenue rose 14%and a 21% jump in first half profits. Overreaction I suspect.
Sonic Healthcare Limited (A$16.90, -0.5%) announced an 18 per cent rise in net profit to $177 million, boosted by cost saving initiatives and the depreciation of the Australian dollar. This is a familiar theme coming from this season. Lean and mean seems to be the winning formula.
Kingsgate Consolidated Limited (A$1.35, -12.6%) Ooops. Reality bites as the results scupper the recent rally. Statutory net loss after tax $4.9 million. Guidance on production confirmed.
Coca-Cola Amatil Limited (A$11.22, -5.3%) lost their fizz as they wrote down a huge chunk of money on the SPC business together with trouble at the supermarket competing with arch rival Pepsi.
Rcr Tomlinson Limited (A$2.98, +2.1%) is one of a trio of mining services companies that have had a pleasant investor reaction to its earnings update. The company posted a 14.2 per cent increase in interim net profit against last year’s result to $18.3 m .Monadelphous Group Limited (A$17.10, +9.7%) also surprised with a record half year profit. That’s right a mining services company with a record profit of $87.1 million, up 10.1 per cent on the previous corresponding period.
That’s not to say business isn’t tough: revenue was down 1 per cent to $1.28 billion, and the company expects about a 10 per cent decline in sales for the 2014 full year. But it looks like their cosy relationship with BHP is continuing to pay off.
Sirtex Medical Limited (A$14.96, +3.8%) had a great day as it announced a 43.6 per cent rise in interim net profit to $11.2 million, off the back of sales growth of its radiotherapy treatment. Falling Aussie dollar also helped things along as US is their main market.
Arrium Limited (A$1.745, -2.0%) posted a net profit of $220.4 million, a reversal of the $448 million loss recorded a year earlier, on revenue which rose 7 per cent to $3.64 billion. They will pay a 6c a share interim dividend, up from 2c a share paid out a year earlier.
Nexus Energy Limited (A$0.077, +16.7%) have gone into a trading halt following news that Don Voelte is stepping aside. There’s a deal brewing here and the stock has run quite hard in the run up to the announcement. Buru Energy Limited (A$1.535, -4.1%) continue to suffer after disappointing Ungani III drilling.
Minutes today released by the RBA suggest that things are gradually improving thanks to low rates and the declining dollar. Uncle Joe will be happy by the increased tax receipts but rates on hold for the year I suspect. Next move up!
Tomorrow’s News Today
US back on line tonight after their Marilyn moment.
Biggest surprise today was Craig Thomson being found guilty. Who would have thought eh?
Chumpy goes for Gold in the Snowboard finals.
The Chinese PBOC has drained $8bn out of the money markets through repos there for the first time in eight months. Doesn’t help the bulls case on China.
Average UK house price is now 250,000 pounds whilst in London its 540,000!!Different country basically. May follow Scotland in the end!
Gold talk continues to rumble around with two of the most accurate forecasters in the last two years still predicting average prices around $1020-1050 for the year. Good to see though that perma gold bull John Paulson has hung on to his long position. It’s a billion dollar bet on Gold ETFs.
More results tomorrow.