It has really been a ‘Flying Kangaroo’ day today with the airline ‘shocking’ the market with news of another 5000 workers to be culled in the next three years. Nice big loss too and of course the politicians in Canberra playing the blame game. Edifying to say the least. The negative sentiment infected the market coupled with falls in the Iron ore price hurting the big miners a little but general weakness really across the board. Not helped either by business spending expectations for the three months to December falling by a greater-than-expected 5.2 per cent. Seems the mining boom is well and truly over and nothing seems to be there to take its place. The problem with QAN is lack of concrete plans and a vision. Much like Federal Politics at the moment.
After a tepid start we slipped all day as February option expiry played out. With the reporting season drawing to a close its tricky to see what the catalyst is going to be to kick us higher. Reckon the soothsayer was right when he mention to Julius that the Ides of March may be a good day to stay in bed! For the record the index closed at 5410 down 26 points with a low of 5406 and a high early of 5434.
Messy and mixed in the sectors with BHP Billiton Limited (A$38.38, -0.5%),RIO Tinto Limited (A$66.60, -0.6%) and Fortescue Metals Group Ltd (A$5.50, -3.2%) holding up more than they deserved. Banks and financials were mixed with QBE Insurance Group Limited (A$13.12, +2.0%) continuing their post result run on broker upgrades. Henderson Group PLC. (A$4.68, +4.9%) were the standout in the finance sector following their numbers, Perpetual Limited (A$50.79, +2.2%) joined in but others preferred wall flower status. Healthcare stocks suffered led by Mesoblast Limited (A$5.75, -3.7%),ResMed Inc. (A$4.80, -3.2%),Ramsay Health Care Limited (A$47.22, -3.6%),Ansell Limited (A$18.12, -1.6%) and Cochlear Limited (A$58.27, -1.0%) but Blackmores Limited (A$26.26, +22.2%) took some seriously good pep ills following an analyst briefing and . Energy stocks were mixed as Oil Search Limited (A$8.57, unch) went into a halt pending a transactional announcement. Woodside Petroleum Limited (A$38.15, +0.8%) put on a few cents but Origin Energy Limited (A$14.44, -1.0%),Santos Limited (A$13.76, -1.0%) and WorleyParsons Limited (A$16.70, -2.5%) fell. Gold shares as usual were under the pump with falls in Kingsgate Consolidated Limited (A$1.21, -6.6%),Regis Resources Limited (A$2.33, -8.6%) and Beadell Resources Limited (A$0.75, -5.1%) not helping.
Sitting in the spa with Champers in one hand and a big fat Cuban in the other were Whitehaven Coal Limited (A$1.86, +4.8%),#VED#,Henderson Group PLC. (A$4.68, +4.9%),Mayne Pharma Group Limited (A$0.91, +3.4%),Perpetual Limited (A$50.79, +2.2%) and #CVO# whilst missing out on the invite were ALS Limited (A$7.50, -10.8%),Regis Resources Limited (A$2.33, -8.6%),Qantas Airways Limited (A$1.155, -9.1%),Wotif.com Holdings Limited (A$2.54, -8.6%),Northern Star Resources Ltd (A$1.165, -7.2%),Mount Gibson Iron Limited (A$0.865, -5.5%),Beadell Resources Limited (A$0.75, -5.1%) and Oceanagold Corporation (A$2.65, -4.3%).
Volume was up around that $4bn level again, so computers seem to be busy. February equity option expiry day today. Aussie dollar 89.40,Gold $1327 and the digital tulips $655.Asain markets seem to be waiting for the busy Chinese week next week with some PMIs and the Budget. Japan up a smidge, HK up too and Shanghai pretty much unchanged.
Stocks and Stories
Qantas Airways Limited (A$1.155, -9.1%) Loss of $250m.5000 Jobs. All credibility. No vision. No clearly articulated plan. Something depressingly inevitable about this one! Think the Leprechaun may struggle to motivate his staff! Still, he gets over $5m a year! Suspect his share option plan is stuffed though!
APN News & Media Limited (A$0.60, -8.4%) ex entitlement today. Seems lots of entitlement offers around at the moment.
Bid withdrawn for Austin Engineering Limited (A$2.67, -14.4%) from Bradken Limited (A$4.36, -4.6%). In house stocks Regeneus Ltd (A$0.485, -3.0%) issued their half yearly. #RLE# improved but Strata-X Energy Limited (A$0.365, unch) remained scoreless.
And as the Mr Punch says “that’s the way to do it” with Air New Zealand reporting a 29 per cent rise in interim profit before tax to a record $NZ180 million.
Macquarie Atlas Roads Group (A$3.01, unch) Analysts need an IQ of 180 to understand this one. Way beyond my pay grade(especially as I write this for nothing!) but the stand out star from this sector in the last three years still delivers. There is even a analysts spreadsheet model pack for this following the stock. Bad MIG!
Seven Group Holdings Limited (A$8.01, -2.0%) announced an interim result worse than the expected 30 per cent to 40 per cent decline in underlying profit it flagged to the market back in November. The company has reported an underlying interim net profit of $131 million, a 44 per cent decline from the December 2012 half.
The third world arbitrageurs #FLN# reported today a little below estimates with an EBITDA of $1.2 million. Its reported earnings were $700,000 after a $394,000 charge for its initial public offering. Costs a bit to go public. Maybe they should have outsourced it!
Oil Search Limited (A$8.57, unch) Oil Search Says to Place 149.4 Mln Shares at A$8.20 Each. Net Profit US$205.7 Million, Up 17%. To Buy 22.8% Stake in Elk, Antelope Gas Fields.
ALS December quarter net profit of $44 million well short of earlier expectations of an unchanged net profit of $47 million earned in the September quarter.
Maca Limited (A$2.38, unch) has made the unconventional move of declaring a 30¢ a share special dividend, while raising equity to prop up the company’s balance sheet. Good way to get rid of those pesky franking credits!
Optus chief executive Kevin Russell will leave the telecommunications company at the end of next month, less than two years after taking on the role.
NEC delivered its first result since listing with revenue increasing 9 per cent to $846 million and EBITDA by 17 per cent to $189 million.
Perpetual Limited (A$50.79, +2.2%) will pay an interim dividend of 80¢ per share – a 60 per cent improvement from the first half of fiscal 2013. The group’s funds under management also enjoyed healthy gains after rising 20 per cent since June 30 to $30.4 billion. Revenue rose 16 per cent to $203.51 million.
Tomorrow’s News Today
Seems there is one sector of the Greek economy that is going great guns. The Shipping industry dominated by players such as Aristotle Onasis have established side industries in hotels, airlines amongst others in a industry worth over $600bn! Greek shipowners placed a record number of orders to build new vessels in shipyards around the world, outstripping any of their global competitors. But now they are up in arms over Government plans to tax them! Previously they were allowed by law to make voluntary payments. Quaint customs they have in Greece! Still Rupert is following in their footsteps as are Google etc!
Ukraine’s currency, the Hryvnia, has fallen to a new low of 10 to the US dollar. Ukraine’s economic performance was dismal. The economy is still smaller than it was in 1992, in the early days of post-Soviet independence.
In Japan looks like Abenomics has another target in sight as he wages war on the poor old guys growing rice in massively subsidised small paddy fields. The government on Nov. 26 approved a plan to end a four-decade policy of paying rice farmers to reduce their production to support prices. The “gentan” subsidy is scheduled to be halved from April 2014 and abolished by March 31, 2019.
Crimea will be the flash point with RasPutin in the coming days as war games kick off for the Russians. Any students of history will know that the Crimea is a graveyard for superpowers. The Light Brigade are not the only ones to have suffered there.120,000 people died in the siege of Sevastopol in 1854.Most from disease. Enter Florence.
Sergei Shoigu (Defence minister) says Russia plans “to expand permanent military presence outside its borders by placing military bases in a number of foreign countries,” including Vietnam, Cuba, Venezuela, Nicaragua, the Seychelles, and Singapore. “The talks are under way, and we are close to signing the relevant documents,” Shoigu told reporters in Moscow.
When rich nations fight, the poor suffer!
This is genius Boeing have invented a self-destruct smartphone. Me, I just give it to my son!
That is all