A quiet and drifting start to the week despite a weaker than expected Chines PMI number at lunch time which the ASX 200 shrugged off. The theory is that the Chinese will push the stimulate button soon. So after a weak start, the market rallied back from 5301 to 5347 ,up 9 and closing on its highs, as miners picked up some friends and two big corporates delivered some good news in the shape of Macquarie Group Limited (A$56.42, +2.9%) and Kathmandu Holdings Limited (A$3.45, +11.3%). Financials were once again doing pretty well as were the big miners BHP Billiton Limited (A$35.74, +0.4%),Fortescue Metals Group Ltd (A$5.09, +2.2%) and Newcrest Mining Limited (A$10.79, +2.3%) together with some energy stocks like Woodside Petroleum Limited (A$38.64, +0.5%) although Santos Limited (A$13.35, -0.3%),Oil Search Limited (A$8.55, -1.3%) and Origin Energy Limited (A$14.35, -0.6%) all slipped.
Consumer stocks were also continuing to feel unloved as the Metcash Limited (A$2.70, -5.3%) downgrade washed through its peers like Woolworths Limited (A$35.59, -0.6%) and Wesfarmers Limited (A$41.59, -0.3%). We also saw falls in gambling stocks with Crown Resorts Limited (A$16.82, -1.8%) leading us down but Aristocrat Leisure Limited (A$5.21, -4.2%) doing their bit, Domino’s Pizza Enterprises Limited (A$20.40, -2.2%) and Flight Centre Travel Group Limited (A$52.15, -1.3%) also fell in a heap. Tech stocks were a bit in the nose, except for Tpg Telecom Limited (A$5.76, +3.8%), with falls in Vocus Communications Limited (A$4.79, -4.2%)iiNet Limited (A$7.57, -1.3%),Silex Systems Limited (A$2.20, -1.8%),Computershare Limited (A$12.20, -1.1%) and Reckon Limited (A$2.23, -1.3%)
Big Chelsea winners today were Kathmandu Holdings Limited (A$3.45, +11.3%),UGL Limited (A$6.88, +4.6%),Beadell Resources Limited (A$0.68, +4.6%),Oz Minerals Limited (A$3.31, +4.1%),APN News & Media Limited (A$0.59, +3.5%),Macquarie Group Limited (A$56.42, +2.9%) and VED whilst Arsenal Wenger losers were Yancoal Australia Limited (A$0.58, -9.4%),Metcash Limited (A$2.70, -5.3%)(again),Oceanagold Corporation (A$2.72, -4.6%), PBT,Aristocrat Leisure Limited (A$5.21, -4.2%) and Iproperty Group Limited (A$3.77, -4.1%).Lynas Corporation Limited (A$0.21, -8.7%) continues to slide into the teens as does Qantas Airways Limited (A$1.065, -0.5%) but this one surely has the best name on the ASX,#RUL#!
Volume was pretty thin with around $3.4bn done whilst Gold was trading around $1327 ,the Aussie dollar around 90.8 and Bitcons at $613.
In Asian markets the MSCI Asia Pacific Index added 0.9 % at lunch time. in Tokyo as a measure of Chinese companies in Hong Kong increased a second day after entering a bear market last week. Standard & Poor’s 500 Index futures climbed 0.1 %.
Stocks and Stories
In house stocks, a placement today in #MBE# worth nearly $12m.
G8 Education Limited (A$4.76, unch) has stunned the market revealing that the recently pulled Sterling Education group which was supposed to be a $200m IPO was instead consumed by GEM, paying slightly more than they normally do for the 91 centre package. The GEM juggernaut continues to roll on. Now close to 28,000 childcare places every day! At $150 a kid its big money.$100m a year at least.
Macquarie Group Limited (A$56.42, +2.9%) The Millionaire factories rehab continues as today they issued a profit upgrade. Yes, some companies still have those. News that the company was hoping for a 40-45% profit upgrade thus year. Macquarie won’t beat its 2008 record profit of $1.8 billion in the year to March it is about to rule off, but it’s going to be well clear of the $871 million profit it posted a year later as the global crisis hit. The result is shaping up to be its third best ever, beaten only by the record $1.8 billion profit in 2008 and a $1.46 billion profit in 2006-07.
Kathmandu Holdings Limited (A$3.45, +11.3%) delivered a 6.6 per cent same-store sales growth, following a 9.6 per cent increase in the same period last year. In New Zealand, same store sales rose 3.2 per cent compared to a 1.3 per cent increase in the first half of 2013.
Yancoal Australia Limited (A$0.58, -9.4%) Yanzhou Coal Mining has decided to walk away from a privatisation offer to purchase the 22 per cent of Yancoal Australia it does not already own.
Yanzhou, the Chinese state-owned company which owns 78 % of Yanzhou, notified the Australian company it “no longer wishes to pursue” its proposal announced July last year, Yancoal said.
The Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics dropped to 48.1, compared with the 48.7 median estimate of 22 analysts surveyed by Bloomberg News and February’s final 48.5 figure. Numbers above 50 signal expansion.
Tomorrow’s News Today
Now that Arthur has gone his offsider Mathias Cormann has “paused” plans to immediately implement controversial changes to financial advice regulation as he seeks to calm the growing opposition from financial planning, seniors and consumers groups to the changes.
In Beijing, the property price to disposable income ratio is a staggering 33 times, the world’s highest, according to figures from Numbeo. Shanghai is only slightly better at 29 times, which is well ahead of the ratio of 9 times income in Sydney and 15 times in London.
89% of the citizens of Venice voted for their own sovereign state in a ‘referendum’ on independence from Italy. The proposed ‘Repubblica Veneta’ includes the five million inhabitants of the Veneto region and has been largely driven by the wealthy ‘who are tired of supporting the poor and crime-ridden south’ (Venice pays EUR71bn in taxes and receives only EUR21bn in services and investment).
Violence has broken out at the end of an anti-austerity protest attended by tens of thousands of people in the Spanish capital Madrid. Dozens of youths threw projectiles at police, who responded by charging at them. Demonstrators were protesting over issues including unemployment, poverty and official corruption.
Gotta love Russian humour as one of their ambassadors suggested that they could take Alaska back too. He did qualify it as saying only joking of course. Sent shudders through the Palin household!
Across Zombieland, debt agencies have raised 29 per cent of their estimated 2014 funding goals, according to calculations by Barclays – more than in any year since 2010.
Meanwhile in China, a third rate Chinese city like Guiyang will boast a seven-star hotel centred on a 67-storey, 400-metre-tall skyscraper. Another ghost town!
And in Japan, 250,000 old people live on feeding tubes! More than 90 percent estimated to be fed through a tube are bedbound, according to a survey. They are, on average, 81 years old and nourished by tube for 2.3 years. No Youth in Asia here!
More fun and games no doubt to come in Ukraine as Obama heads to Europe for some serious sanctions bluster. News that Russian troops have taken another Crimean Naval base. That’s three now in 24 hours! Gold anyone?