Following on from big falls in the US, it was no surprise that we followed suit today, with a gap down on the opening and trading around the lows of 5428 for most of the day. Volume was light considering and we await to see what the Computers do in the US tonight. Tech stocks here took it badly with former darlings getting called fugly and sold off heavily. Things like Xero Limited, Freelancer, Veda Group,Carsales.Com Limited (A$10.45, -4.1%) were hit hard and hit often. Of course the big news of the corporate day was the downgrade by incoming new CEO Alison Watkins of the outlook for Coca-Cola Amatil Limited (A$9.74, -14.6%). Things did not go better at all. One analyst at the briefing had a huge dummy spit too. No names but Gino, come on. It is inevitable if you are flogging soft drink at 15 bucks a carton of 24 in Woolies. Anyway the combo of NASDEAD falls, Chinese data again bad, no rate cuts, Coke withdrawal symptoms and looming Easter break took their toll, and I suspect that next week will also be struggle. Am quietly surprised that we haven’t been worse this week. Guess it shows how much cheap money is coming this way for the great yields. The high Aussie dollar is testament to this. Even the king of Jawboning can’t get the dollar down.
In the sectors as Martha once said, Nowhere to run to, Nowhere to hide! Banks took it badly down around 0.8%.Resources also suffered with BHP Billiton Limited (A$37.62, -0.8%),RIO Tinto Limited (A$64.11, -1.3%) and Fortescue Metals Group Ltd (A$5.29, -2.2%) wounded. Golds had some profit taking in the mid -caps. Actually they are all mid-caps now! Newcrest Mining Limited (A$10.74, -1.8%) gave up some of this week’s gains despite gold being better. Techs were murdered and even safe consumer stocks Wesfarmers Limited (A$42.57, -0.6%) and Woolworths Limited (A$36.04, -0.9%) eased. Retail stocks like Harvey Norman Holdings Limited (A$3.29, +0.3%),JB Hi-Fi Limited (A$20.64, +0.0%) and Kathmandu Holdings Limited (A$3.44, -1.1%) fell despite all the activity in the space this week.
For the week we are up 6 whole points! Wow .Big week huh? US down 1.5% and Japan toilet bound down 6.6%.So much for ‘Abenomics’ and no issue with the sales tax, BOJ reckons no need for any more stimulus .Mission accomplished! UK unchanged but Friday still to come!
Big winners today included Echo Entertainment Group Limited (A$2.70, +12.0%),Hutchison Telecommunications (Australia) Limited (A$0.09, +4.7%),Energy World Corporation Ltd (A$0.295, +1.7%),Goodman Fielder Limited (A$0.52, +2.0%),G8 Education Limited (A$4.55, +1.3%) in the ‘Bigs’ and Paladin Energy Ltd (A$0.45, +4.7%),Starpharma Holdings Limited (A$0.78, +5.4%),AFJ# in the ‘Smalls’. Biggest losers were Coca-Cola Amatil Limited (A$9.74, -14.6%),Magellan Financial Group Limited (A$12.12, -6.6%) (got lots of tech stocks), Mayne Pharma Group Limited (A$0.85, -5.0%),Bt Investment Management Limited (A$6.62, -4.3%),Karoon Gas Australia Limited (A$2.64, -4.0%),Billabong International Limited (A$0.51, -4.7%) and ##PBT#.
Volume was on the low side at around $3.6bn.seems that the computers are going into Low Frequency Trading mode! Aussie dollar now at 93.70,Bitcons at $428 and Gold at $1320.
Asian markets took a hit today as China again disappointed. The MSCI Asia Pacific Index sank 1 percent at lunchtime its biggest drop since March 20. Tencent , now called (Eightcent!) China’s biggest internet company, led declines, followed by Japan’s Softbank and South Korea’s Samsung.
Stocks and Stories
Already discussed Coca-Cola Amatil Limited (A$9.74, -14.6%) a little but news of a 15% profit downgrade sent the stock down 15%.Easy metrics.
In the banking sector Bank of Queensland Limited (A$12.62, unch) Underlying profit up 8% and div up 14% not too shabby. Couple this, though, with a large acquisition that shareholders are being asked to pay for through an entitlement issue at 10.75 for $400m and everything was peachy. Trading halt still in place as they thrash out the money side of things.
Echo Entertainment Group Limited (A$2.70, +12.0%) surged today as they found a new Bunnyman. Matt Bekier. Final approvals came through today so he is official CEO and MD. Never quite sure what the difference is. Probably about 200 grand!
Challenger Diversified Property Group (A$2.74, +4.6%) received a takeover today from their best buddies Challenger Limited (A$6.26, -2.0%) $2.75.Done deal.
Beadell Resources Limited (A$0.665, +3.9%) some rare good news in this one today with some stunning gold hits. Looks like they have drilled in to a vault at Fort Knox by accident. That is if you believe that there is any gold at the Fort.(That’s another story!)31m at 490 g/t gold and 6m at 2491 g/t!!!
Big winner today was PDY which announced they had secured $6.bbn for development of the Oakajee Port in WA. Lots of details to come and now in a trading halt pending a material announcement. Topped out at 5.2.Suspect they should have been in a halt all along
China’s consumer price inflation (CPI) rebounded to 2.4 per cent annually in March, up from 2.0 per cent in February, but sequential data suggest that China’s inflationary pressures remain mild. Producer prices meanwhile trended lower to -2.3 per cent, from -2.0 per cent in February, pointing to a weak demand for manufacturing goods.
Seek Limited (A$16.28, -2.9%) has paid $US5 million for a 25 per cent stake in “Bangladesh’s leading online employment business” bdjobs.com, the company said in a statement to the ASX. Should blow away the competition.
Tomorrow’s News Today
Is it just me or is it scary lending to Greece at 4.95%.They were killed in the rush.$16bn looking at $5bn offering. Are you demented?
Russia about to turn off the gas to Germany and Ukraine. Still BP has said its business as usual with the Ruskies. Bless!
The Co-operative Bank, in the UK, has confirmed it made a loss of £1.3bn for 2013.The losses, in line with expectations, come after the bank’s failed bid to buy 632 branches from Lloyds Bank last year. The deal collapsed after the discovery of a £1.5bn black hole in the Co-op Bank’s balance sheet.
I was interested to read in the only economist worth listening too today, “The Kouk ” wrote that since the implementation of the Carbon Tax which was supposed to kill off Australia, we have created 193,100 new jobs. The stock market has risen by 32 per cent, adding just under $400 billion in 20 months. Around $90 billion in dividends have been paid out, over that time. Houses are up 14% and the price of stuff like cars ,furniture, food has fallen too. So remind me again about the tax!
Seems that the Islamic opposition parties in Indonesia are making a big comeback in their elections!
Marc Faber has predicted yet another crash. Predicted every one bang on the money. The 2000 crash, the 2001 crash, 2002 crash etc..you get the idea!
Tony is confident the pings are from Flight MH370.God he’s good, two trade deals and a plane. Lord Lucan and Shergar better watch out!
And loser of the week has to go to ‘Sir’ Bob Carr. Doing a great job for the coalition .
Have a great weekend and enjoy the ride