Another quiet day downunder ,where we have bucked the global sell off for the time being. After a tentative start we fell away to 5392 before climbing gradually to close down 3 at 5411 to keep the dream alive. The major winners were the miners on the back of the stronger Iron Ore price and the continuing strength in the big four banks. BHP Billiton Limited (A$37.88, +0.4%),RIO Tinto Limited (A$64.50, +0.9%) ,Newcrest Mining Limited (A$10.50, +1.9%) and Fortescue Metals Group Ltd (A$5.59, +2.4%) all posted good gains as did Westpac Banking Corporation (A$34.46, -0.1%) and Australia and New Zealand Banking Group Limited (A$33.55, +0.2%) but Telstra Corporation Limited (A$5.04, unch) eased. Big falls though in net stocks not that we have too many in this country but some got trashed as they came back to earth with a resounding thud. XRO was the standout although we did see some buying creep in. Freelancer, REA Group Ltd (A$45.30, -1.9%),Seek Limited (A$16.24, -2.8%),Flight Centre Travel Group Limited (A$51.98, -1.2%) and MNW all in the dog house but Iproperty Group Limited (A$2.68, -1.1%) rallied hard off a low today of $2.51 which was encouraging.
Gambling stocks were mixed as Crown Resorts Limited (A$16.64, -1.7%) fell but Echo Entertainment Group Limited (A$2.36, +1.3%),#ARD#,Ainsworth Game Technology Limited (A$4.04, +0.7%) and Tatts Group Limited (A$2.97, +0.3%) moved higher as they are perceived as safe. Healthcare stocks fell led by Csl Limited (A$69.70, -0.9%) but Mesoblast Limited (A$4.96, +7.6%) ted off after a presentation to the Alliance for Regenerative Medicine. Builders were mixed with James Hardie Industries PLC (A$13.97, -1.5%) and Brickworks Limited (A$13.98, -1.2%) down but Boral Limited (A$5.76, +1.1%) AND Csr Limited (A$3.52, +0.3%) basking in merger glory if only they can keep the ACCC happy.
Strutting their stuff today were Mesoblast Limited (A$4.96, +7.6%),Treasury Wine Estates Limited (A$3.87, +7.2%),Oceanagold Corporation (A$2.67, +6.8%),Atlas Iron Limited (A$1.01, +4.7%),Australian Agricultural Company Limited (A$1.29, +4.5%),Panaust Limited (A$1.695, +4.6%) and Arrium Limited (A$1.37, +3.4%) whilst tech stocks dominated the loser list. Freelancer, XRO,Tpg Telecom Limited (A$6.05, -5.5%),Donaco International Limited (A$1.20, -5.1%),Seek Limited (A$16.24, -2.8%),Unilife Corporation (A$0.62, -8.8%) and #MNW#.
Volume was woeful as punters preferred to watch and wait. Only around $3.1bn for the day with the Aussie at 92.89 and Gold trading around $1300.The computers seem to have gone quiet as the furore about the High Frequency traders continues to rumble round.
Asian markets also took heart from the BOJ decision not to pump any more money in to the economy until they see the results of the tax increases. After early falls, most had clawed their way back into the game. Tokyo down 1% Shanghai up 1.76% and Hong Kong up 0.9%.
Stocks and Stories
Treasury Wine Estates Limited (A$3.87, +7.2%) held their first briefing session with the new wine vigneron at the helm. The market liked what they saw with lots of motherhood statements, learnt fresh from the MBA course which was enough to send the shorts running for the hills. Not sure for how long but it’s a start. Still expect someone to knock on his door with some money before he gets too settled.
The RBA’s foreign currency reserves jumped $US10 billion last month ,the biggest such increase in 45 years .Data on Australia Official Reserve Assets, showed the central bank’s foreign reserves jumped $US10.4 billion to $62.2 billion in March from the month-earlier $US51 billion.
Some bloke called Roy Morgan has completed a business survey and it showed business confidence has weakened to its lowest levels since the federal election as sluggish activity weighed on positive sentiment, a monthly private survey has found.
US financial services company, Genworth distributed detailed pre-marketing research reports to fund managers this morning, which valued Genworth Mortgage Insurance Australia Limited at up to $2.4 billion. They forecast $235 million net profit after tax in the 2014 financial year, and said the valuation implied an eight-to-10-times on a price-to-earnings basis.
Spare a thought for Cabcharge Australia Limited (A$3.87, -5.4%) today as BOF(Barry O’ Farrell) has announced that they will no longer be able to rip us off with a 10% surcharge on credit cards or the beloved Cabcharge docket. Bout Time! Roll on goCatch I say.
Ten Network Holdings Limited (A$0.25, unch) has now got 9% of its register shorted. Seriously.
Tomorrow’s News Today
Currency wars are back with the US warning China on the level of the Remnimbi following a sharp drop. Not sure they are listening.
Takeda Pharmaceutical Co. and Eli Lilly & Co. were ordered to pay a combined $9 billion after a federal court jury found they hid the cancer risks of their Actos diabetes medicine in the first U.S. trial of its kind.
Cement titans Holcim and Lafarge said on Monday they would off-load assets worth €5bn in a move to secure backing for their blockbuster merger. The deal, which is being billed as a merger-of-equals, will create a €40bn cement powerhouse that operates across 90 countries, with combined sales of €32bn and a combined workforce of 135,000 employees.
Cash is king. US firms were sitting on some $US1.6 trillion in cash at the end of 2013, a 12 per cent increase from a year ago. That’s more money in the tin than Japan! Apple, alone, has more than Malaysia in cash reserves.
Ukraine has not paid off any of its debt to Gazprom despite a deadline for the nation to start reducing its debt by midnight (Moscow time) on Monday. A Gazprom spokesperson told Reuters: “There have been zero payments from Ukraine. “Ukraine owes Gazprom $2.2bn for supplies of natural gas. Good luck with that! The bailouts go straight to Mother Russia. RasPutin must be laughing his head off!
This is the stuff of movies, usually with Gene Hackman and a bank of screens, but the chief executive of a private bank has been shot dead in the underground car park of his bank’s headquarters in the principality of Liechtenstein, Swiss media report.
Obviously if you are going to run an Tech company you need a cool name. One that means absolutely nothing. Well these guys have it in spades with the new listing of GrubHub which is an online food ordering service. The company generated $137 million in revenue last year, up significantly from 2012.Limited profit of course but listed with a 30% premium valuing it at $2.7bn.Haven’t we got online ordering already .It’s called home delivery on the beaches!
And finally my best tip ever. Someone who starts saving at the age of 21 and then stops at 30 will end up with a bigger pension than a saver who starts at 30 and puts money aside for the next 40 years until retiring at 70.Most powerful force in the universe according to Einstein. Compound interest. Are you listening Gen Y?
That is all