Brace! Brace! Brace!
It has been a long week and nothing really has changed. We have had more leaks than a St David’s Day parade in Cardiff and more kite flying than Mary Poppins but it all comes down to Tuesday and how tough the budget is going to be. For the week the market has really gone nowhere, finishing last Friday at 5458 and today after a small rally into the weekend we are closing around 5461 down 16 for the day having hit a low of 5431.The big news of the week hasn’t been the bank dividends or Fox leaving our shores or even the continuing slide in the iron ore price but the fight between The “Packer Whacker” in the Blue corner and David “Glass Jaw” Gyngell in the red corner. Of course along the way Super Mario in Europe has announced that things are so serious with inflation that he is going to do something in June ,whilst in the US, Yellen (“Not Screamin”) has revealed that she doesn’t trust the numbers so its lower for longer. The big overseas story has been the upcoming listing for Alibaba and the Forty thieves and the meltdown of the Twitterverse due to the impending avalanche of shares that are hitting the market. So this week’s theme has been disappointment in banking results with no special reasons to be cheerful and the safe haven of yield stocks and defensives in eth US as they finally work out that these high flyers are over priced.
Next week of course we see Underbelly ”the Razor Gang” Episode one in full flight so expect a soft start to the week as we digest the bad news on the hip pocket and get told this is the budget we had to have. Jobs numbers this week have been mildly positive so it will be hard for Jokin Joe to find any solace from the RBA.Today’s minutes from our august independent bank suggested that rates will be on hold for some time to come.
Today’s action was quiet and not as bad as it could have been as Australia and New Zealand Banking Group Limited (A$32.72, -3.2%) went ex div with more banks to follow. Another bid from Asia for Envestra Limited (A$1.335, +18.1%). BHP Billiton Limited (A$37.34, -0.8%) eased again as did RIO Tinto Limited (A$60.95, -0.8%) and Fortescue Metals Group Ltd (A$4.81, -0.2%) held on clinging by their fingertips. Copper hopeful Bougainville Copper Limited (A$0.53, -8.6%) had a shocker today which was strange as copper hasn’t been too bad
In the winners circle today were Envestra Limited (A$1.335, +18.1%) with another bid on the table.Virgin Australia Holdings Limited (A$0.405, +6.6%) also improved after selling their Brisbane office and Leighton Holdings Limited (A$20.05, +6.9%) also had a day out in the sunshine as the Europeans continue to up their holding.APN News & Media Limited (A$0.655, +4.0%),Syrah Resources Limited (A$3.73, +3.3%),Shopping Centres Australasia Property Group (A$1.75, +2.9%) and JB Hi-Fi Limited (A$19.47, +2.8%) also did well with Fairfax Media Limited (A$1.005, +2.6%) also climbing as the strike finished and we realised that sacking people is good for the share price. In the losers today were Arrium Limited (A$1.105, -4.7%), CVO, Corporate Travel Management Limited (A$5.80, -3.3%),United Overseas Australia Limited (A$0.56, -3.4%),Mermaid Marine Australia Limited (A$2.18, -4.0%) and Perpetual Limited (A$45.05, -3.2%) after a presentation at a conference. Shouldn’t have bothered!
Volume was low again around $3bn with the dollar stuck at a one month high around 93.6.Digital tulips were $474 and Gold was$1291. In Asia Macau casinos rebounded after big falls in the last few days with Galaxy Entertainment Group Ltd. rebounding 5.2 percent after dropping 7.6 percent yesterday.HK unchanged Tokyo up 0.6% and Shanghai down 0.2%
Stocks and Stories
Wow. It seems that the staid world of the ABS has been rocked today with news that an employee was passing on sensitive economic news to a friend who worked for National Australia Bank Limited (A$34.38, +0.7%) and he has been insider trading.
Two bids now for Envestra Limited (A$1.335, +18.1%) after a last-minute $2.37 billion bid by a Hong Kong conglomerate led by Asia’s richest man triggered the prospect of a bidding war with local gas pipeline major APA Group. The approach by Cheung Kong Group, which is offering $1.32 per share in cash, came just days before shareholders in the gas distributor were due to vote on APA’s $2.1 billion scrip-based offer. Suspect more bids to come in all sectors.
News Corporation.. (A$18.29, +3.0%) has reported a 5 per cent decline in revenue to $2.08 billion for the third quarter, due largely to currency fluctuations and falling advertising sales in its news and information business.
Seems that we are a little more discerning here downunder with the float of pub group AG&E for $100m sunk with institutional investors shying from the asking price for the stock. Now the pubs are all on the market! Five of them. Sounds like a stock split!
Fairfax Media Limited (A$1.005, +2.6%) has reiterated its support for a relaxation in Australia’s media ownership laws, as it reported a 4 per cent decline in group revenues for the first four months of calendar 2014.
Finally some good news in the bio tech space with Prima Biomed Ltd (A$0.048, +33.3%) shares are soaring after US regulators granted fast-track status to the cancer drug developer’s CVac clinical development program.
Tomorrow’s News Today
One of the big mergers between Publicis and Omnicom has unravelled in a fog of recrimination and tax issues. Was a $35bn merger so pretty large fees at stake.
Weekends are usually quite eventful in Ukraine so expect more fun and games there in the next few days.
And it looks like the White House is toying with the idea of relaxing export restrictions on oil!!That would be big!
Mr Packer and Mr Gyngell have been fined for offensive conduct after their public brawl. Sure that will hurt them. Their reputations are intact in fact probably better now. Who is going to take on James after those punches! Still its not all bad with news that Apple is looking to buy Dr Beats for $3.2bn which is nice given that Packer is a long time investor in the headphone cum streaming company.
Thailand looks like they will be offering some good cheap deals for tourists too so that will ensure some brave souls hit Phuket with their strong Aussie dollars.
That is all have a great weekend and follow me on twitter @henryj007