A quiet start to the week as the biggest story in town was the stoush between Alien v Predator at Bondi. Didn’t they remember the first rule of Fight Club? Looks like little Lachlan at News has bought the pictures for $200,000. Who doesn’t want to see two titans of the local business community go head to head. Looking forward to the rematch on UFC. Anyway after a really impressive start we wilted as the banks came in for friendly fire due to disappointment in the WBC lack of special div. The market is a tough mistress at the moment in the banks and they seem to be on a hiding to nothing. It’s also hard for them to crow about how much money they are making with an austerity budget coming up. Maybe ‘Jokin’ Joe would look at a super profits tax on the banks. Can’t even believe that I wrote that. Never in a million years. Anyway it seems that the bank’s largesse only extends so far and the RBA guidelines on the amount of cash they keep back is being reluctantly acknowledged. After topping out at 5486, a combo of weak banks and the latest Chinese PMI below expectation was enough to see it plunge to 5442 before a small bounce to close at 5462 up a whopping 4 points.
The biggest drag on the ASX 200 was the banks with all down around 1% although Macquarie Group Limited (A$60.46, +3.0%) continued to find friends after the result last week, hitting $60.Material and energy stocks were firm with BHP Billiton Limited (A$37.49, +0.6%) in the green as were RIO Tinto Limited (A$61.65, +1.1%),Santos Limited (A$13.99, +1.9%),Woodside Petroleum Limited (A$40.98, +0.8%) and Oil Search Limited (A$8.95, +1.6%).Golds also rallied hard as the shiny stuff hit $1306.Newcrest Mining Limited (A$10.49, +3.6%),Kingsgate Consolidated Limited (A$0.88, +3.5%),Beadell Resources Limited (A$0.69, +7.8%) etc etc. Insurers were in top form as AMP Limited (A$5.19, +1.2%),Insurance Australia Group Limited (A$5.81, +1.8%) and even QBE Insurance Group Limited (A$11.80, -0.1%) rallied.
Industrials were better with consumer stocks Wesfarmers Limited (A$43.25, +0.5%) and Woolworths Limited (A$36.84, +0.7%) plus Telstra Corporation Limited (A$5.21, +0.2%) all adding cents whilst Treasury Wine Estates Limited (A$3.94, -3.7%) gave up some of its bid talk frenzy. Discretionary consumer stocks were mixed with JB Hi-Fi Limited (A$18.80, -0.5%),Harvey Norman Holdings Limited (A$3.20, -0.3%),Myer Holdings Limited (A$2.15, +1.4%) and David Jones Limited (A$3.95, +0.3%) going in different directions.
Hogging the limelight today were Aquila Resources Limited (A$3.34, +36.3%),Sirius Resources NL (A$2.78, +9.0%),Beadell Resources Limited (A$0.69, +7.8%),Evolution Mining Limited (A$0.855, +5.6%),Northern Star Resources Ltd (A$1.155, +5.0%) and Sandfire Resources NL (A$5.76, +4.7%) whilst copping a hiding were Peet Limited (A$1.17, -6.0%),Aurizon Holdings Limited (A$4.92, -4.8%),Ardent Leisure Group (A$2.54, -3.8%),Treasury Wine Estates Limited (A$3.94, -3.7%)(as takeover greed eased),Whitehaven Coal Limited (A$1.40, -2.1%) and Peninsula Energy Limited (A$0.029, -9.4%).
Volume was light, with some ‘Zombieland’ markets closed for a bank holiday, at around $3bn. Asian markets re weaker following Chinese data .HK and Shanghai down around 1% but Tokyo closed today.UK also closed tonight.
Aussie dollar 92.65,Bitcons at $473 and Gold perking up to $1306 as Ukraine continues to trouble the world order.
Stocks and Stories
Westpac Banking Corporation (A$34.45, -1.2%) Another 6 months another $3.77bn.Not bad Gail, not bad. Dividend was increased to 90 cents and a positive outlook statement but some dummy spitting from the bulls as there was no special dividend this time. Whaaaaa!!!
Bendigo and Adelaide Bank Limited (A$11.39, unch) today bought the Rural Finance Corp for $1.7bn from the State Government and launched a $230m capital raising in the process.
Aquila Resources Limited (A$3.34, +36.3%) was the subject of a bid today for cash from Chinese steel group Baosteel and rail owner Aurizon for $3.40 in used notes. Surprisingly this bid seems to have taken the market by surprise with no significant price rise pre the takeover announcement.
Westside Corporation Limited (A$0.375, unch) has rejected as undervalued a takeover offer from China’s diversified energy company Landbridge Group that valued the company at $177.6 million. Westside said the proposal, which was already increased to 40 cents per share a week ago from 36 cents was still too low.
Building approvals fell in March but remain strong over the year. The number of residential building approvals slipped by 3.5 per cent in March to take the annual rate of growth to 20 per cent.
Inflation has jumped by an “alarming” 0.4 per cent to take the annual rate to 2.8 per cent in a sign that the strengthening consumer prices could see the Reserve Bank raise rates by the end of the year. A survey by TD Securities and the Melbourne Institute showed that inflation rose by 0.4 per cent in April after a 0.2 per cent lift in March.
The final reading of the HSBC/Markit purchasing managers’ index (PMI) for April came in at 48.1, lower than a preliminary reading of 48.3 but up slightly from an eight-month low of 48.0 in March
And finally in some good news for the Pilbara Iron Ore players, exports to China from Port Hedland, which accounts for about a fifth of the globally traded market, rose by almost 7 per cent in April, from March when they jumped 27 per cent. Shipments to China amounted to 28.89 million tonnes in April, up from 27.04 million in March, data from the Port Hedland Port Authority showed.
Tomorrow’s News Today
Greece is poised to formally open debt relief talks with its creditors. The Greek finance minister, Yannis Stournaras, will raise the once off-limits topic with his Zombie counterparts in Brussels on Monday, almost four years to the day after Athens received its first slice of international aid. Portugal has already joined Ireland in the Outpatients department ,so it can’t be long before the Greeks do the same.
The May 25th referendum in Ukraine is shaping up to be the watershed moment for more sanctions according to scary Obama. If the Russians continue to interfere he is going to get very cross indeed. Trouble is countries like Germany are reluctant to annoy RasPutin too much as they are Russia’s largest trade partner after China, with imports of $50.7 billion worth of Russian goods and services and exports to Russia worth $38.3 billion.
Of course Zombieland could dance with another devil in the pale moonlight as Iran has popped up and offered to sell them all the gas they need. One small snag though, Tehran needs finance as it plans to invest $14bn to develop oil and gas fields that it shares with neighbours in the Persian Gulf. The South Pars fields, which combined with Qatar’s North Dome area, is estimated by the International Energy Agency (IEA) to hold 1,800 trillion cubic feet of natural gas and 51bn barrels of natural gas condensate.
The Federal Government is looking to clamp down on Pirates. Hope they do it after GOT has finished. Good to see how much it costs to access lunch with Politicians. Seems they are all at it. Bill Shorten at $3300, not sure that’s such good value as the Jokin Joe lunch pack! Mind you the full premium package at $22,000 is a bit steep. Barry O Farrell just asked you to bring a bottle…
Tony Abbott says Australians would ultimately “thank” him for raising taxes on the higher earners. However KPMG analysis indicates the introduction of a debt levy for the wealthiest Australians to repair the budget would make Australia the eighth-highest taxed nation in the OECD.
Crisis what Crisis? Fact; Australia’s Government debt level is 11% of its GDP .Germany’s is 83% of its GDP, US 107%, Japan 237%, UK 89%.Still let’s not let the facts stand in the way of a good scare campaign!
Looking forward to the Fight Club video tomorrow. Jamie v David, head to head, mano y mano. Not sure it’s a good look though for a would be Sydney casino owner.