nother relatively quiet day but at least a more positive one than yesterday’s rout . A good rally throughout the day took us in to positive territory after a lacklustre start. A low of 5384 saw a few buyers emerge especially in the banks and big miners. In the end the market closed up 11 points at 5420 having wilted a little towards the close. A high of 5433 was set as we enjoyed a merger charged rally despite Iron Ore falling below $100. Telstra Corporation Limited (A$5.30, +0.8%) was especially strong as a number of brokers, me included ,suggested that punters take another look. I reckon it’s an easy option when you have nothing better to recommend to investors. The last refuge of the broker or is it scoundrel! Anyway the banks were positive except for Westpac Banking Corporation (A$33.68, -0.3%) whilst BHP Billiton Limited (A$37.45, +0.1%) came back from the dead or at least a low of $37.15.
In industrials/financials QBE Insurance Group Limited (A$11.25, +2.1%) had a day in the sunshine as did Treasury Wine Estates Limited (A$4.80, +17.9%) following an approach from private equity. Inevitable really. Just when the new man was getting the cork out and having a taste too. Energy stocks were a little weaker with Santos Limited (A$13.95, -0.6%) and Woodside Petroleum Limited (A$40.92, -0.5%) as were healthcare slightly in the doldrums following the budget last week. Consumer stocks were better despite consumer sentiment falling heavily both leading into and after the budget. Woolworths Limited (A$37.11, +0.5%),Wesfarmers Limited (A$42.70, +0.1%) and even Coca-Cola Amatil Limited (A$9.54, +1.6%) fizzed up on the TWE news. Gambling stocks were also better as a few buyers emerged for the pokies. You would have thought that these guys would be hit hard by the latest budget moves. Maybe hope springs eternal.
In the winner’s circle today were Air New Zealand Limited (A$2.01, +5.8%), NPX,Fortescue Metals Group Ltd (A$4.54, +3.9%),Sirius Resources NL (A$3.08, +4.1%),Mount Gibson Iron Limited (A$0.745, +2.8%) and WSA# whilst amongst the back markers were TFS Corporation Limited (A$1.63, -8.2%) (placement),Tassal Group Limited (A$3.89, -4.9%),Mineral Resources Limited (A$10.70, -4.3%),GWA Group Limited (A$2.55, -2.3%),Energy World Corporation Ltd (A$0.295, -4.8%),Breville Group Limited (A$8.19, -3.4%) and Fairfax Media Limited (A$1.025, -2.4%). Asian markets were better with Tokyo up 0.5% ,HK up 0.7% and Shanghai little changed. More trouble though as the cyber war between the Us and China heats up ,the border issue continues with Vietnam and Japan and RasPutin seeks a deal with China worth $400bn in gas supplies for the next decade. Who needs Europe eh?
The Aussie dollar was just shy of 93.0,with digital tulips $490 and shiny happy gold around $1293.Volume was around $3.8bn in the end.
Stocks and Stories
RBA came out today and said they expected no change to rates for some time to come.2016 looks possible! What are all those traders going to do now?
Treasury Wine Estates Limited (A$4.80, +17.9%) announced today that they had been chatted up at a dance by a bloke called KKR and he had suggested something in the vicinity of $4.70 to take the company home and introduce them to his etchings. Was inevitable that someone would pounce on this strong stable of brands that has looked as miserable as a wallflower at a Saturday night dance. The time to strike is always when a new CEO starts .Those strategic reviews tend to mean a few people get to see under the hood. Sorry, too many metaphors! But at least the company is on notice now. “Come, Watson, come! The game is afoot. Not a word! Into your clothes and come!” They will not be around in a year. Love Sherlock.
GMA the long awaited IPO came on today with a blast. Pretty impressive for those lucky enough to get some.
Talking IPOs Media monitoring business iSentia will have a market capitalisation of $408 million when it lists on the ASX next month.
The company’s prospectus shows owner Quadrant Private Equity will retain 25 per cent of the company, while new investors will control around 70 per cent of the stock.
The IPO of Spotless Group was launched this morning by joint lead managers Citigroup, Deutsche Bank and UBS. Shares in the institutional book-build are being offered between $1.60 and $1.85 per share, spilling around $1 billion into the coffers of the catering services firm. The indicative enterprise value to pro forma FY15 forecast EBITDA is 7.9 times to 8.5 times. The pricing values the company at around $1.75 billion to $1.93 billion.
The problem with lending or borrowing money based on Iron Ore is there for all to see as Chinese iron ore traders are dumping stocks ahead of a June deadline to repay bank loans, as demand continues to be weak.
Ruralco Holdings Limited (A$3.68, +0.8%) said it swung to a first-half profit of $5.1 million from a $500,000 loss in the year-earlier period. Stronger livestock trading volumes and better sales in the rural supplies business contributed to the improved result.
Duet Group (A$2.34, +4.0%) had a good day after Spark Infrastructure announced they had taken a 14% stake. Another one in the spotlight?
Tomorrow’s News Today
More cheap deals on holidays to Bangkok coming down from Groupon and Livingsocial as Thailand’ military has declared a state of martial law but it’s not a coup. Bit like the governments tax definitions.
Surf camera maker GoPro has filed documents for a public share sale in the US. Money raised from the initial public offering (IPO) will go towards repaying debt and future acquisitions.
Credit Suisse has admitted to the US to evading tax for its clients. Big time. Big fine.
As takeover and merger fever rains throughout the world, AstraZeneca has told Pfizer where to stick its bid.
The London housing boom is starting to worry the Bank of England with a massive increase again this year. The average asking price of a property in London has risen by £80,000 since the start of 2014,asking prices in the capital hit an average of £592,763 in May, 3.3% up on April’s figure and 16.3% higher than in May 2013.
And here’s the ultimate geek prize. The Longitude Prize changed the world 300 years ago as it changed the face of navigation, as it measured longitude for the first time accurately. Now the prize is being modernised with 10m pounds being awarded to the genius that solves one of the world’s great problems. The public is being asked for suggestions for the problem. I would like to nominate getting pictures of cats off the internet!
Maybe time for a recap: we have Thailand in crisis, Syria, Libya and Ukraine ,problems with Vietnam and China, Japan and China, Russia and the US and Europe, cyber-crime in the US. It’s all happening! Japan with a quadrillion yen in debt, the US with $17 trillion in debt and a $7 co-payment here.
That is all. Breakfast Sky Biz tomorrow for the early birds.6.30am! The things I do.