Another positive day as we cruise into the long Easter/Anzac break. The market however took second fiddle today to the news that Barry Grange O Farrell had resigned as NSW premier following revelations that he sent a thank you note for his bottle of wine. He obviously was brought up the old fashioned way to thank people who gave him presents. Shame he didn’t think to declare it or remember it. ICAC gets another one. Events in Macquarie Street were a welcome diversion though, to a firm but pretty quiet market today. After a tentative start the ASX 200 took heart from the Chinese GDP number and pushed ahead to close up 32 at 5420.Low point seen just after the opening at 5386 and high around 5424.BHP Billiton Limited (A$37.94, +0.4%) numbers helped as did Fortescue Metals Group Ltd (A$5.39, +1.1%) and RIO Tinto Limited (A$63.37, +unch). Financials were better as always except for QBE Insurance Group Limited (A$11.98, -0.2%) which is still suffering from a strategic review of its US operations yesterday but good broad based gains in consumer stocks, healthcare ,telcos and energy also helped things along. In the oil stocks Woodside Petroleum Limited (A$39.59, +1.1%),Santos Limited (A$13.44, +0.9%) and Oil Search Limited (A$8.64, +2.2%) were the best .Csl Limited (A$67.53, +0.6%),Sonic Healthcare Limited (A$17.50, +0.9%) and ResMed Inc. (A$5.02, +3.5%) in healthcare stocks, Woolworths Limited (A$36.34, +1.0%),Wesfarmers Limited (A$42.73, +0.7%) and Bega Cheese Limited (A$5.02, +1.4%) in food stocks and Seek Limited (A$16.65, +3.4%),Brambles Limited (A$9.37, +1.4%) and Skilled Group Limited (A$2.81, +2.6%) in widget makers.
Stocks drinking the Grange(not 1959) today included Freelancer, Challenger Limited (A$6.45, +5.6%),Ten Network Holdings Limited (A$0.265, +6.0%),Karoon Gas Australia Limited (A$2.76, +6.2%),Beach Energy Limited (A$1.68, +3.1%),Qube Holdings Limited (A$2.27, +4.1%) and Tpg Telecom Limited (A$5.93, +3.7%) whilst taking the Jacobs Creek were #MCS#,Iluka Resources Limited (A$9.11, -6.8%),Sandfire Resources NL (A$5.74, -4.2%),Sigma Pharmaceuticals Limited (A$0.725, unch),Sirius Resources NL (A$2.53, -2.7%),GWA Group Limited (A$2.78, -2.5%),Mighty River Power Limited (A$1.995, -2.7%),Incitec Pivot Limited (A$2.83, -2.4%) and Yancoal Australia Limited (A$0.36, -7.7%) after the wall collapse in the Hunter sadly claimed two lives. Volume was anaemic at best at around $3bn.Gold remained under pressure despite events in Ukraine at around $1300.aussie dollar at 93.75.
Asian markets were positive taking their cue from the NASDEAD stocks, SoftBank which owns about 37 %of Alibaba surged 8.3 percent in Tokyo after Alibaba posted its fifth straight quarterly profit gain. Nikkei was up 2.7% whilst China rose 0.35% and HK up 0.6%.Whole bunch of economic make believe numbers from China today, which as always will be taken with a grain of salt.
Stocks and Stories
BHP Billiton Limited (A$37.94, +0.4%) announced an upgrade to production today as it defied the weather related downturn of Rio and others. Iron Ore production would now reach 217 million tonnes in the 2014 financial year rather than 212 million tonnes.
Fortescue Metals Group Ltd (A$5.39, +1.1%) Despite disappointing with its production numbers, Team Twiggy believe they can run the miner at “Sprint” capacity to achieve their full year forecasts of 127 million tonnes .
That will require the boys to ship a massive 41.6 million tonnes in the June quarter; a rise of about 32 per cent above the 31.5 million tonnes that were shipped in the March quarter.
Challenger Limited (A$6.45, +5.6%) after the company reported assets under management increased 1 per cent over the March quarter to $49.5 billion, up 21 per cent year-on-year
Iluka Resources Limited (A$9.11, -6.8%) issued a production report and again disappointed the market with its outlook from Europe and Asia. I can never understand why if your whole business is based on prices that are not determined by you ,that you don’t hedge. That is what commodity markets are there for. Seems crazy that you go through the whole process of producing something and then you just accept what the market tell you is the price. Madness. Wrong model!
MCS Another day another issue as costs mount and profits dive. Could well be the worse float since Iselect Limited (A$1.11, +0.9%)
This whole NBN thing is just a joke with them announcing a $1bn loss today, revenue of barely $70m and hoping that negotiations with Telstra Corporation Limited (A$5.10, +0.4%) over the $11bn deal with be settled mid-year. That Mike Quigley guy is making the Pink Batts look like a successful rollout!
Chinese GDP came in better than expected at 7.4% but at the lowest level in 24 years! Apparently that is positive as it means the Chinese authorities will stimulate. China’s home sales fell and new property construction declined 25 percent in the first quarter, as credit remained tight, adding to signs of a slowdown in the world’s second-largest economy.
Tomorrow’s News Today
Japan’s government will cut its economic assessment for the first time in almost a year and a half, reflecting concern about the blow to consumption from this month’s sales-tax increase, the Nikkei newspaper reports.
Chinese foreign currency reserves hit $4trillion !!!US not happy. This is what Treasury had to say in their semi-fredo report. “A stronger RMB would support domestic consumption by increasing the purchasing power of households, and encourage a shift from tradable goods production to production of domestically-oriented goods and services”. Not going to happen though!
Over in the UK ,news today that four companies are going to build their own fibre network in York, Capable of delivering speeds of up to 1 gigabit per second (1Gbps). This will be in direct competition to BT.BT’s infrastructure mostly takes fibre as far as the street cabinet, relying on copper for the final mile to the doorstep, giving a top speed of up to 80 megabits per second (80Mbps). The company does offer fibre all the way to the premises at 330Mbps to consumers who request it – the product costs £38 a month plus installation but is not available from all exchanges. Does this sound like NBN II here?
Here is something to tell your kids. It’s a competitive world out there! Close to 7 million Chinese this year will graduate college, up from 1.1 million in 2001. By 2020, China’s college-educated talent pool is expected to number 195 million people — more than the entire U.S. labour force that year.
Gotta love a property boom. London homes increased in value by more than twice the average person’s income last year, figures show. The typical value of properties in the capital rose by £63,000 in the last year, reaching an average of £458,000. he typical price paid by first-time buyers reaching £192,000. The average income of people purchasing their first properties is now £47,000. The average property price in the UK is now £253,000 or around $450,000.
Not sure what the Duke and Duchess make of all the shenanigans in NSW today! Will make interesting small talk over canapés!