Henry Jennings’ Market Wrap
A quiet start to the week with a number of high profile and high dividend paying stocks going xdiv, Wesfarmers Limited (A$42.80, -2.3%),Woodside Petroleum Limited (A$37.99, -3.0%),Suncorp Group Limited (A$12.34, -3.3%) and Telstra Corporation Limited (A$5.12, -2.5%). These three were responsible for 14 index points as we overcame a weakening US and kicked early only to drift lower as the day wore on. Asian market weakness probably to blame for the pause in proceedings. In the final wash up we closed at 5440 up 1.5 after a touch up at the close. Top of the day was 5455.The big winners continue to be Iron Ore stocks with BHP Billiton Limited (A$39.38, +0.5%) leading the way ,Fortescue Metals Group Ltd (A$5.99, -0.5%) Bluescope Steel Limited (A$6.30, +7.3%) and the Golds also did well. Newcrest Mining Limited (A$11.43, +2.9%), Evolution Mining Limited (A$0.95, +6.7%),Medusa Mining Limited (A$2.21, +3.3%),Regis Resources Limited (A$2.70, +5.5%),Silver Lake Resources Limited (A$0.695, +2.2%) all firmed.
In the finance sector Suncorp Group Limited (A$12.34, -3.3%) went xdiv whilst National Australia Bank Limited (A$34.43, -0.3%) slipped with gains for Westpac Banking Corporation (A$33.57, +0.8%) and Australia and New Zealand Banking Group Limited (A$32.00, +0.6%). Fund managers were firmer with the exception of Platinum Asset Management Limited (A$7.31, -1.6%) which go ex tomorrow. Magellan Financial Group Limited (A$13.62, +2.0%),Perpetual Limited (A$51.73, +2.8%) and Henderson Group PLC. (A$4.46, +0.9%) all looking fine and dandy.
Gambling stocks were mixed with Crown Resorts Limited (A$17.03, +2.1%) rolling the dice and coming up 7 with Reef Casino Trust (A$4.00, +6.1%),Skycity Entertainment Group Limited (A$3.61, +2.3%) and Tatts Group Limited (A$3.03, +1.7%) all pulling royal flushes. Energy stocks gained Caltex Australia Limited (A$20.94, +2.2%),Paladin Energy Ltd (A$0.425, +1.2%),Energy Resources of Australia Limited (A$1.34, +5.1%) and Oil Search Limited (A$8.57, +0.9%)
Big gold medal winners today were Beach Energy Limited (A$1.66, +8.9%),Bluescope Steel Limited (A$6.30, +7.3%),Evolution Mining Limited (A$0.95, +6.7%),Monadelphous Group Limited (A$17.66, +6.5%),Energy Resources of Australia Limited (A$1.34, +5.1%) and Regis Resources Limited (A$2.70, +5.5%) whilst sliding across the ice into the barriers were #FLN#,Independence Group NL (A$4.12, -4.0%),ARB Corporation Limited (A$11.78, -2.6%),Mermaid Marine Australia Limited (A$2.81, -3.1%),Mount Gibson Iron Limited (A$0.945, -3.6%) and SAI Global Limited (A$3.85, -3.0%). Volume was respectable for a Monday at nearly $5bn though with dividend stocks taking the Lion’s share .Telstra Corporation Limited (A$5.12, -2.5%) at $360m,BHP Billiton Limited (A$39.38, +0.5%) at $350m,Wesfarmers Limited (A$42.80, -2.3%) and Woodside Petroleum Limited (A$37.99, -3.0%) around $270m.
Asian markets sagged which didn’t help the local sentiment as rumours emerged of more property lending curbs with Chinese house prices surging again.Tokyo was down around 0.5% but China took a big hit off 2.6%
Natural gas climbed to its highest price in five years and oil rallied on the cold snaps in the UK and the US .Aussie at 89.65 and Digital tulips at $638 with Natural Bitcons(gold) a tad weaker at $1320.
Stocks and Stories
In house stocks, G8 Education Limited (A$4.23, +1.4%) continued their meteoric rise despite denying that the unsecured note issue was complete. Acrux Limited (A$2.26, +6.1%) launched its Axiron product in Germany. Boart Longyear Limited (A$0.36, -15.3%) reported another shocker today(time for a strategic review?) whilst Gr Engineering Services Limited (A$0.72, +17.1%) made a positive announcement and a very upbeat outlook and an increased dividend. Just shows you it’s not all doom and gloom in the services sector.
Beach Energy Limited (A$1.66, +8.9%) has posted a 160 per cent per cent jump in first-half underlying net profit to $158.1 million, beating some analysts’ estimates.
Myer Holdings Limited (A$2.63, +1.5%)/David Jones Limited (A$3.30, +1.2%) seem to be doing their mating dance. Talk is that the two giants of retailing are looking once again at getting together.
Caltex Australia Limited (A$20.94, +2.2%) has reported a 27.5 per cent fall in full-year profit to $332 million, in line with its December forecast of $320 million-$340 million.
Australia’s biggest insurance broking network, #SDF#, has reported an 8 per cent jump in net profits for the half year to December as the company continues to grow its broker numbers.
M2 Telecommunications Group Limited (A$6.45, -2.6%) has reaffirmed guidance of profit up to $70 million for the 2014 financial year after delivering a 26 per cent increase in profits during the first half.
Transfield Services Limited (A$0.99, +24.5%) had a great day today as news emerged that they would be taking over the contract to run Manus Island. In a deal worth $1.2 billion they will provide “garrison and welfare services” at the Nauru and Manus detention centres.
Good result today from Senex Energy Limited (A$0.785, +2.6%) with a 9 per cent increase in first-half net profit to $25.6 million. Underlying profit climbed 37 per cent to $31.8 million on revenue that climbed 14 per cent to a record $88.3 million.
Monadelphous Group Limited (A$17.66, +6.5%) has announced it has been awarded a construction contract worth around $680 million for mechanical works at the Ichthys project onshore LNG facilities in Darwin.
Average new home prices in China’s 70 major cities rose 9.6 per cent in January 2014 from a year earlier
Tomorrow’s News Today
Looks like UBS is trying to once again save itself billions of bucks in fines for its role in the currency fixing scandal with news that it is dobbing itself in and throwing itself on the mercy of the regulators. Worked before!
Seems that Game of Thrones is going to be a major watershed this year in more ways than one. Foxtel which has got the rights is launching it on its Foxtel Play service plus they are launching Presto very soon as well as an attempt to fend off the threat of Netflix cutting into their lunch.
Now the Ukraine looks to be lurching back towards the West it seems that the boffins in Europe are racing around trying to come up with a plan.
Politician s are used to trying to bribe us to vote for them but it looks like it is reaching new heights as the Scots vote on whether to stay in the Union or break away.PM Cameron is holding a cabinet meeting in Aberdeen promising to enable $200bn worth of oil and gas extraction over two decades in the North Sea. This one will get even more ridiculous the closer we get to the September referendum.
CNN has confirmed it is pulling the plug on Piers Morgan, as falling ratings finally took their toll. Shame.
Mark Karpelès, chief executive officer of Mt. Gox, the embattled Toyko-based bitcon exchange, resigned on Sunday from the board of the Bitcon Foundation .The Bitcon Foundation confirmed in a statement on its website that Mt. Gox had resigned its board seat and thanked Mt. Gox for its efforts.
HSBC is about to announce highest profits since GFC as UK mortgages and property boom drive the banks bottom line.