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clarence_beeks

A relatively quiet and listless start to the week and end to the financial year as school holidays took centre stage then accelerating carnage at the close. A spot of backsliding for resources kept the ASX 200 under pressure all day and we saw a low of 5395 at the close as end of year de-ramping took its toll with heavy volume smashing banks and big resources ,a high of 5445 in thin trade before closing at 5395 down a big 50. For the record the ASX200 is up 43 points since 1st January and 620 odd points or around 13% for the year. Financials got belted late despite Aussie banks being valued at the most profitable in the World. Big four were around 0.5-1% easier as were insurers like QBE Insurance Group Limited (A$10.87, -1.5%),Insurance Australia Group Limited (A$5.84, -1.0%) and AMP Limited (A$5.30, -1.1%). Property trusts were off too with Stockland (A$3.88, -1.5%)Dexus Property Group (A$1.11, -1.8%),GPT Group (A$3.84, -2.8%) all losing friends post their dividends. Airline and infrastructure stocks eased led by Qantas Airways Limited (A$1.26, -5.6%),Virgin Australia Holdings Limited (A$0.43, -3.4%) with Auckland International Airport Limited (A$3.64, -0.3%) and Sydney Airport (A$4.22, -0.2%) mixed. Consumer staples were mixed as Wesfarmers Limited (A$41.84, unch) improved but Woolworths Limited (A$35.22, -1.2%) lost out. Healthcare stocks fell a way again as did Telstra Corporation Limited (A$5.21, -1.0%). Big resources got whacked late too with BHP Billiton Limited (A$35.90, -1.4%),RIO Tinto Limited (A$59.31, -1.2%) and Fortescue Metals Group Ltd (A$4.35, -4.4%).

Winners included Iproperty Group Limited (A$3.06, +1.3%),Ten Network Holdings Limited (A$0.265, +3.9%),STW Communications Group Limited (A$1.435, +1.8%),#JHC#,Incitec Pivot Limited (A$2.90, +0.7%),Downer EDI Limited (A$4.52, +0.2%) and Sandfire Resources NL (A$6.22, +1.0%) in the biggies and #GOR# and #PBD# in the smalls. Losers were finally Liquefied Natural Gas Limited (A$2.14, unch),Sigma Pharmaceuticals Limited (A$0.73, -5.2%),#QAN3,Greencross Limited (A$9.24, -3.2%) and Arrium Limited (A$0.795, -4.8%) with Yancoal Australia Limited (A$0.25, +2.0%) and Indophil Resources NL (A$0.16, unch) in the tiddlers. Volume was big for a Monday but book squaring and ramping helped push it to around $3.8 bn whilst Asian markets firmed as HK pushed up 0.24% Tokyo up 0.2% and China up 0.67%.Aussie dollar up to 94.22 with digital tulips up to $636 and gold $1316.

Stocks and Stories

Goodman Fielder Limited (A$0.68, unch) is in a trading halt as Singaporean bidders are now trying to reduce their offer price due to more capital required. Not sure they can do that once they have lobbed a higher bid but we shall see. Looks like they only want to cough around 67 cents for the blessed bread maker.

Healthscope to raise A$2.6bn in IPO valuing the company at $3.8bn

Seems that you have to be quick on the stag stocks as recent listings #MVF# and #AHY# are struggling to gain traction. Dick Smith Holdings Limited (A$1.96, +1.6%) was also out today with their figures which were slightly ahead of the prospectus forecast but still below water. Good luck with Healthscope!!!

The Housing Industry Association said its survey of large builders showed sales of private sector new homes fell 4.3 percent in May from April.Still, sales grew by 3.8 percent over the three months to May to be up 21.0 percent compared with the same period a year ago.

House stocks in the news, AWE Limited (A$1.80, -0.8%) kicks off drilling the Drover in the Perth basin today, REY Resources Limited (A$0.105, unch) announces a capital raising ,in drug companies Pharmaxis Ltd (A$0.066, +3.1%) announced Bronchitol shortlisted for Orphan Drug award and Regeneus Ltd (A$0.39, +5.4%) entered a US marketing trial for Kvax.

Now I know the RBA doesn’t think this is a problem but Australia approved a record A$24.9 billion ($23 billion) of home purchases by foreign buyers in the nine months to March 31, a 93 percent jump from the same period a year earlier, a rival broker reported. 78 % were new homes, not unlike in China. Bet they were all in Sydney and Melbourne too.

Tomorrow’s News Today

In case you missed it Central Bank bankers have called a “Puzzling Disconnect” between equity markets and the real economy and Mark ‘Circus’ Carney is talking 2.5% for the new normal in interest rates!!

Buybacks in the US this year are set to top $US600 billion! IPO fever is on again in China as Lianming Machinery jumps 445 on its first day..

Argentina may have Messi but looks like they are set to default yet again on $540m bond payment for the second time in 13 years. Hope the footballers are getting paid in US dollars!!Or Bitcons! Very Messi.

In Bulgaria more arrests for trying to take down the banking systems with false rumours about an impending crisis.One bank had to be taken over by the Government whilst the queues at the ATMs from First Investment Bank, the country third-largest lender, were forced to close until today after depositors withdrew 800m lev ($600m) in a matter of hours.

He’s not coming out, he’s been a very naughty boy. Well, BNP have at any rate and look to be punished severely. Looks like it will cop a $9bn fine for busting sanctions. Of course they are French so the fine was always going to be huge. Over to you Monsieur Hollande!

Now I know inflation is completely dead. BUT, in the UK ,a couple with two children needs to earn £40,600 to have an acceptable standard of living, almost 50% more than before the recession, according to a report with food costs are up by 26%, domestic energy by 45% and bus travel by 37%. Long live inflation, at least in the UK that is.

London House prices up 18% YOY. Rest of the UK 6.7%.Think London should succeed!
The Abbott Governments FOFA starts tomorrow. Welcome to a Brave New World.

Happy New Financial Year!!!

 

Clarence

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