Friday the 13th. Another disappointing lead from overseas as worries on Iraq and the global consequences of higher oil prices seeps into consciousness. Lost in translation were the comments from Mark ‘Circus’ Carney at the BOE on the upcoming UK rate rises .Sooner rather than later. Now we all know an economy marches on its house prices and the UK is certainly marching away but the UK banking regulator is starting to curb lending ratios and this will slow growth somewhat, except in London where they pay cash anyway.
So ,after a 20 point down start ,things accelerated and hit down 55 at 5373 before some pre-weekend book squaring took hold and we closed down 24 at 5405. Iron ore weakness added to the gloom. Resource stocks fell obviously with BHP Billiton Limited (A$35.29, -1.2%), RIO Tinto Limited (A$57.60, -1.9%), Fortescue Metals Group Ltd (A$4.06, -6.2%) leading us down but golds improved as did energy stocks. Newcrest Mining Limited (A$9.88, +1.8%), Woodside Petroleum Limited (A$42.79, +1.9%), Santos Limited (A$14.66, +1.0%), Origin Energy Limited (A$14.32, +0.7%) and Oil Search Limited (A$9.80, +0.5%) in the bigs. Other Golds improved with takeover target Papillon Resources Limited (A$1.825, +7.4%) sprinted out of the gate followed by Beadell Resources Limited (A$0.63, +3.3%), Silver Lake Resources Limited (A$0.375, +8.7%), Evolution Mining Limited (A$0.845, +3.7%) and Kingsgate Consolidated Limited (A$0.81, +5.2%).
In the industrial space we saw Woolworths Limited (A$36.48, -0.3%) cop a bashing after the Jamie Oliver row and banks the biggest culprits with Westpac Banking Corporation (A$34.26, -0.9%),Commonwealth Bank of Australia (A$81.73, -0.2%),National Australia Bank Limited (A$33.21, -0.4%) and Australia and New Zealand Banking Group Limited (A$33.75, -0.2%) down along with fundies like Platinum Asset Management Limited (A$6.31, -1.7%),Macquarie Group Limited (A$59.98, -0.8%) and Bt Investment Management Limited (A$6.62, -2.1%) all weaker. Consumer stocks and healthcare continued to weaken with Csl Limited (A$68.05, -0.9%), Ramsay Health Care Limited (A$45.95, -1.8%), Woolworths Limited (A$36.48, -0.3%), Metcash Limited (A$2.85, -4.4%) and retail bricks and mortar players Harvey Norman Holdings Limited (A$2.99, -0.7%) and Myer Holdings Limited (A$1.99, -1.5%) slipping.
Scoring goals today were Neymar, of course, and Oceanagold Corporation (A$3.10, +8.0%),Drillsearch Energy Limited (A$1.555, +6.9%), Papillon Resources Limited (A$1.825, +7.4%), Virgin Australia Holdings Limited (A$0.43, +6.2%),Evolution Mining Limited (A$0.845, +3.7%),Whitehaven Coal Limited (A$1.455, +3.9%),SEA# and Karoon Gas Australia Limited (A$3.42, +2.7%) whilst fouling him in the penalty box(come on Ref, that was never a pulldown!) were Hutchison Telecommunications (Australia) Limited (A$0.072, -7.7%),Skilled Group Limited (A$2.36, -4.1%)Fortescue Metals Group Ltd (A$4.06, -6.2%),Liquefied Natural Gas Limited (A$1.605, -7.2%)(up 30% yesterday),Billabong International Limited (A$0.49, -5.8%),Seek Limited (A$16.38, -3.4%) and Metcash Limited (A$2.85, -4.4%). Retail stocks still feeling the pain in all this warm weather and budget inspired.
Volume was better than we have seen but a few concentrated trades helping like Coca-Cola Amatil Limited (A$9.10, -0.4%) but nice to see us around $4bn again. Won’t last I suspect. Asian Markets were actually better as oil stocks and other energy stocks helped rally things from lows.HK was up 0.6%,Tokyo up 0.15% and China up 1.25%.Aussie dollar continues to draw fiends from around the globe at 94.17 and digital tulips at $622 and the shiny stuff at $1273.
Stocks and Stories
Things go better with Coca-Cola Amatil Limited (A$9.10, -0.4%) as Goldman Sachs placed 30m at $9.00.
Aquila Resources Limited (A$3.10, -12.4%) today slumped as the bidding consortium called their $3.40 bid final and did not extend it. Looks like Mineral Resources Limited (A$9.55, -1.5%) is now driving the show. Nice tax loss to show for it at the moment having bought 50m shares at $3.75.Sure they know what they are doing. Looks like the hedge funds who piled into this one have done some serious money. The smart ones sold to MIN.
One of the big winners recently is Liquefied Natural Gas Limited (A$1.605, -7.2%) and after a huge 30% run yesterday we got news today that Baupost Group, the Boston-based hedge-fund firm run by Seth Klarman, bought a 6.69 per cent stake in LNG Ltd as the Australian company considers further projects to follow its proposed $3.5 billion US venture.
Nexus Energy Limited (A$0.013, unch) went into administration after the activists shareholders effectively blocked Seven Group Holdings Limited (A$7.64, -0.8%) 2 cent bid. I expect they will now try to buy the assets off the administrators. Maybe even cheaper.
Cabcharge Australia Limited (A$4.05, unch) is back on the front foot again as the WA Government looks to cut the surcharge form 10% to 5%. Go Uber!
Profit update at Cryosite Limited today with new numbers expected in the 500k-800k range rather than 8-1m.
Gotta love the naming of things. Mining Tax (No One pays it anyway). Future Fund. (Whose future!) Anyway David Neal has been appointed head of Australia’s $92 billion Future Fund.
Tomorrow’s News Today
The Bank Of Japan is holding its aggressive monetary policy settings as the economy “continued to recover moderately as a trend.” When you are 1 Quadrillion Yen in debt stop digging? Apparently not.
China’s Yuan rose to two-month highs against the US dollar on Friday, fuelling expectations that the central bank may allow the currency to rise for a while after stronger economic data.
The Yuan has gained 0.7 per cent so far this week.
And while we are in China ,Dalian iron ore futures are currently off -0.6% at ¥666.It’s a sign And not only but also, nice déjà vu feeling with China’s home buyers being offered no-money-down purchases in an echo bygone days. Deals skirting government requirements for minimum 30 % down payments have emerged this year from Guangzhou and Shenzhen .
Gambling Chief Mark Scheinberg, whose father is under indictment in the U.S., has emerged as a billionaire after PokerStars’ agreement to be acquired for $4.9 billion in cash. Only started the business in 2001. Not bad. No debt either. Just loadsa money.
The Chinese Ports story is gathering some momentum as authorities investigate irregularities using stockpiles of metal multiple times for loan collateral!
And possibly the biggest heist we have seen for a long time as the extremists who have taken over Mosul in Iraq seem to have stumbled on nearly half a billion in US dollars…not a bad pay day for a terrorist organisation. Seems they may have found a Black Hawk or two. I guess with that kind of money though they can buy a few! Pretty tough new rules imposed too.
Nice look when the CEO of a UK utility gets a 2.7m pound salary while 10% of his customers are living in fuel poverty! Good on yer Alistair Phillips-Davies, chief executive of energy group SSE.
The England football team went to an orphanage in Rio “it’s heartbreaking to see their sad little faces with no hope”, said Jose aged 6′.
I am back on Sky Biz at 4.30 this afternoon til 6pm! Not sure why! Profile apparently.