Knocking on records door! After a wishy washy start due mainly to weakness in mining stocks, the market ground a smidge higher led by a slew of corporate profit results that brought joy and happiness to investors. Financials led us higher with the big green blob back in favour as QBE Insurance Group Limited (A$12.86, +4.8%) continued their bounce as did Suncorp Group Limited (A$12.24, +0.6%). Materials were the red blob today as the Iron Ore price slipping below 4120 convincingly put a dent in the share price of BHP Billiton Limited (A$38.58, -1.3%),RIO Tinto Limited (A$66.97, -2.4%) and Fortescue Metals Group Ltd (A$5.68, -2.7%).
Consumer stocks were healthy with Woolworths Limited (A$36.52, -0.2%),Wesfarmers Limited (A$42.78, +0.2%) and Coca-Cola Amatil Limited (A$11.29, +1.1%) in demand.$17 for a case of 30 cans of Coke has got to hurt them though. Healthcare stocks continued their rosy cheeked run as Ramsay Health Care Limited (A$48.97, +3.0%) continued to gather upgrades after their numbers yesterday with Csl Limited (A$71.95, +1.1%),Cochlear Limited (A$58.87, +1.5%) and Sonic Healthcare Limited (A$17.83, +1.4%) all joining in the fun.
Despite the gas price collapsing in the last few days energy stocks were better. Amazingly there were only 15 exploration wells drilled in the North Sea last year.Our locals enjoyed a day out with Woodside Petroleum Limited (A$37.86, +0.5%) recovering with Santos Limited (A$13.90, +1.5%) and Origin Energy Limited (A$14.58, +1.4%) keeping it company. Industrials were better too with new jailer on the block Transfield Services Limited (A$0.965, +7.2%) locking it down tight with Brambles Limited (A$9.48, +1.4%),SAI Global Limited (A$4.00, +3.6%),Seek Limited (A$16.85, -0.3%)(when will it stop) but mining services continued to look like a train wreck with Boart Longyear Limited (A$0.28, -18.8%) heading into a dark ,dark tunnel, as did Calibre Group Limited (A$0.49, -9.3%) and Lycopodium Limited (A$4.04, -5.2%).
Once again gold stocks failed to launch despite a better gold price again overnight and locally. Seems that no one believes in them anymore. They also had an earthquake in Kalgoorlie which rattled a few cages but damage appears to be minimal at this stage. Uranium shares though were a different kettle of mutated Japanese fish as word of an imminent restart of nuclear reactors there helped the sector to go critical. Paladin Energy Ltd (A$0.54, +21.3%) and Energy Resources of Australia Limited (A$1.465, +8.5%) were the two biggest beneficiaries.
In the end our market closed up 3 points at 5437 as it ground out a result. Not pretty but workmanlike to keep the bulls happy.
Shiny happy people holding hands today included WorleyParsons Limited (A$17.13, +10.6%),Energy Resources of Australia Limited (A$1.465, +8.5%),Cabcharge Australia Limited (A$4.49, +5.2%),QBE Insurance Group Limited (A$12.86, +4.8%),Ramsay Health Care Limited (A$48.97, +3.0%),Whitehaven Coal Limited (A$1.775, +3.8%) and AWE Limited (A$1.425, +1.4%) whilst the gloom descended on Hutchison Telecommunications (Australia) Limited (A$0.096, -1.0%),Regis Resources Limited (A$2.55, -6.9%),BC Iron Limited (A$4.94, -5.7%),Brockman Mining Limited (A$0.057, -5.0%),M2 Telecommunications Group Limited (A$6.28, -4.4%),Atlas Iron Limited (A$1.005, -5.2%) and Arrium Limited (A$1.57, -4.3%).
Volume for the day was better again at around $4.4bn but still “Mums and Dads” stay transfixed on the sidelines. Only gives me reason to think we have further to rally as they don’t usually come in to the market until things are rattling along. Greed is good.
Asian markets were again looking to China and the weakness of the Yuan as the cause of early falls before some bargain hunters stepped back in and pushed them up to little change on the day.
Aussie dollar around 90 cents ,Gold was steady(ish) at a four month high and the digital tulips bounced to $627.
Stocks and Stories
AGL Energy Limited (A$15.95, -0.2%) had a volatile day as profit dived after unseasonably warm weather hit profits but the early loss was recovered with the stock closing little changed. Net profit fell 27.1 per cent to $261 million. Dividend held steady at 30 cents though,
WorleyParsons Limited (A$17.13, +10.6%) signalled a major restructure after a strategic review and the loss of 500 jobs. Seems the more jobs they cut the happier the market. Should mean a good rally for Qantas Airways Limited (A$1.27, +2.8%) tomorrow. They also reiterated the group’s current profits guidance for 2014.
Sydney Airport (A$4.05, +2.8%) has forecast it will increase its distributions to shareholders by 4.4 per cent in the current financial year after reporting a 7.3 per cent rise in full-year EBITDA to $910 million in 2013.
Flight Centre Travel Group Limited (A$51.39, +3.2%) another record number as our appetite for overseas travel sees no sign of abating. Unless that is if you are Qantas, in which case forget it.
Mortgage Choice Limited (A$3.11, -3.7%) Some months ago I met with management on this one and they could hardly contain their joy with how the business was going. The phrase never had it so good came to mind. Well today we saw that officially with record profits and an increased dividend. They did tell me so! Been a favourite for some time. Net profit of $11 million for the six months to December, up 46 per cent from a year earlier and importantly for its future the loan book has grown 4.4% to $46bn.
BC Iron Limited (A$4.94, -5.7%) Bumper result today with revenue up 186%,profit up 800% and dividend up to 17 cents. Shares down though as commodity price weakness and ‘buy the rumour sell the fact’ , took hold.
Wotif.com Holdings Limited (A$2.78, +0.7%) has reported an 18 per cent fall in first-half earnings to $22.6 million, at the top end of its guidance issued in December.
Unusual to get a downgrade with numbers due on Friday. Mining services group AJ Lucas has announced a downgrade to forecast earnings for this June financial year, saying EBITDA is expected to be “approximately breakeven” ahead of interim profits results on Friday.
In house stocks recent floats Strata-X Energy Limited (A$0.365, unch),Regeneus Ltd (A$0.50, unch) and #RLE# were steady.
The Japanese government has announced its intention to restart the country’s 48 nuclear reactors, after two years of inactivity. I thought they had signalled this a while ago but set to go before cabinet .Explains the run in Paladin Energy Ltd (A$0.54, +21.3%) today. Perhaps?
Regis Resources Limited (A$2.55, -6.9%) announced a falling in the sword today as COO Morgan Hart has left the building. Usually that is a reason to buy them but not this time!
Tomorrow’s News Today
A meeting of Chinese lawmakers to set economic policy and growth targets begins next week in Beijing. The U.K. reports preliminary fourth-quarter gross domestic product figures, while data on U.S. mortgages and home sales are due today before durable goods orders and jobless claims tomorrow.
I find this hard to believe of the Swiss. Credit Suisse “helped its US customers conceal their Swiss accounts” and avoid billions of dollars in American taxes, a report has alleged. It claims the bank opened Swiss accounts for more than 22,000 US customers, with assets totalling $12bn at their peak.
Hong Kong’s economy only grew 2.9% in a bit of disappointing news.
Bank of America has disclosed that it is the subject of a new probe. Apparently its mortgage and FX businesses are under investigation with potential legal losses now allowed for to the tune of $6bn.
Seems that Gold companies are looking at novel methods of exploration as a Northern California couple out walking their dog on their Gold Country property stumbled across a modern-day bonanza: $10million in rare coins. Nearly all of the 1,427 coins, dating from 1847 to 1894, are in mint condition.
The man behind the infamous @GSElevator tweets has been unmasked after a three year search. John Lefevre lives in Texas and has never even worked for the Wall Street bank. Some of his tweets though were priceless as he purported to be a Goldman Sucks insider. Amazing it took three years. Not sure what hope there is for discovering real crime! As they say at GS, “There are only 2 paths to happiness in life. Stupidity or exceptional wealth”. Got one nailed already!
That is all