The ASX200 closed up for the second day in succession, today rising 11pts thanks to a decent late rally over the last few hours of trading. Volume was solid at around $5.5b. The market is again closing in on that crucial 5400pt level, as opinion remains divided as to where we trade next. The market remains in a 100pt trading range, as investors remain cautious ahead in light of the recent Ukraine crisis, and the crucial Fed meeting to follow later in the week. All eyes continue to be focused offshore, with this week’s macro developments likely to be pivotal in dictating any short term momentum.
The share market has edged higher as investors wait to see how quickly the United States will continue to wind back its economic stimulus measures. Investors are looking past developments in Ukraine’s Crimea region and are waiting on comments to be made by the US Federal Reserve on Thursday, Australian time, at the conclusion of its two-day policy meeting.
The Westpac Melbourne Institute Leading Index which indicates the likely pace of economic growth three to nine months into the future fell from 0.53% in January to –0.19% in February, continuing a sharp loss of momentum since late 2013. The February result marks the first sub-trend reading since December 2012.
Wotif.com Holdings Limited (A$3.00, +23.0%) continued on its positive run from yesterday, following a pre-market trade of around 3.5% of the company shares at $2.40. After being asked by the exchange to explain the move WTF said they had nothing additional to declare.
Stockland (A$3.75, -2.6%) bought a 19.9% stake in Australand, or more than 115 million shares, for about $435.3 million. The purchase comes as Australand’s former major shareholder, Singapore-based real estate CapitaLand, sells out of the Australian company. Stockland and Australand own and develop housing estates, industrial properties and office and apartment blocks.
David Jones Limited (A$3.32, -0.3%) posted a half year profit of $70.1m which was slightly better than BBY’s expectations but generally in line with what the market was looking for. Earnings were 4.6% lower than last year mainly due to weakness in the financial services division following changes to their agreement with American Express. All eyes really on this company are on whether or not a deal with Myer eventuates.
Cardno Limited (A$6.66, +5.2%) popped 5.2% today as investors continued to get their teeth into their recent acquisition of PPI group in Houston Texas for $145m and the stock settles in after its $50m placement. BBY’s analyst is very positive on Cardno’s capabilities and this purchase.
G8 Education Limited (A$4.48, +2.5%) extended its recent rise after the failure of the Sterling IPO last week. The gain today was assisted by the announcement of the quarterly dividend (ex date 24 March) of 3.5c. The stock has risen 10% since it was made known to the market that the Sterling IPO would not proceed after the book build was initially delayed and a cornerstone shareholder could not be found. While positive for GEM, the Sterling issues have not had the same effect on Affinity Education Group Limited (A$1.34, unch) which has been a slight underperformer relative to the market since the beginning of the week.
Among the big banks, National Australia Bank eased three cents to $34.51, Westpac rose 16 cents to $33.75, Commonwealth Bank gained 26 cents to $75.45, and ANZ added 17 cents to $32.43.
Retailer David Jones dipped one cent to $3.32 after announcing a five per cent fall in profit in the first half of its fiscal year. Rival Myers nudged one cent higher to $2.66.
There is now clearer evidence that labour demand is beginning to strengthen,” reckon ANZ economists, following the release of Department of Employment’s job vacancies data today.
“While the improvement this year to date may be overstated due to seasonal adjustment challenges, job vacancies have been trending higher since September last year,” they write.
“Labour demand is showing signs of improvement across the suite of different measures that we look at (including ANZ job ads), which is consistent with our view that the unemployment rate should stabilise in the near term around the current level of 6 per cent.”
The Australian dollar’s recent resilience in the face of headwinds in international markets has seen analysts lift their forecasts for the currency for this year and in 2015. The local currency has traded within the range of US89¢ to US91¢ over the past few weeks despite bouts of risk aversion in markets about the ongoing crisis in Ukraine, and as China showed signs of financial stress. The dollar rose to its year’s high early today, fetching US91.36¢ as risk sentiment improved as concerns of escalating tensions over Ukraine eased.
Not my words today but good summation none the less