A wishy washy start to the new financial year as the positive vibe after the late rout yesterday evaporated with Financials under the ‘Bang bang Maxwell’s silver hammer’. In the final countdown, the market fell 20 pts to close at 5376 after a high of 5415 and a low of 5375. Commonwealth Bank of Australia (A$79.97, -1.1%) continue to suffer as bad press and ASIC investigations swirl around but others getting sucked into the vortex were in fact doing worse, Australia and New Zealand Banking Group Limited (A$32.84, -1.5%) and Westpac Banking Corporation (A$33.38, -1.5%) well out of favour. Insurers chimed in too and health care provider NIB Holdings Limited (A$3.10, -4.9%) had a shocker. Resources though were on the tear with BHP Billiton Limited (A$36.00, +0.3%),Newcrest Mining Limited (A$10.84, +3.0%) and RIO Tinto Limited (A$60.45, +1.9%) in demand as well as the much oversold gold stocks like Silver Lake Resources Limited (A$0.55, +7.8%),St Barbara Limited (A$0.12, +4.3%),Kingsgate Consolidated Limited (A$0.905, +5.2%),Regis Resources Limited (A$1.70, +3.7%) and #PRU. Other miners joined in the fun Iluka Resources Limited (A$8.30, +2.1%),Oz Minerals Limited (A$4.19, +2.4%),Western Areas Limited (A$4.77, +3.2%) and Sirius Resources NL (A$3.31, +2.2%).
In the industrial space Wesfarmers Limited (A$41.52, -0.8%) and Woolworths Limited (A$35.08, -0.4%) were under fire from the regulator for bullying but discretionary spenders like Gambling were firmer Crown Resorts Limited (A$15.20, +0.5%),Tatts Group Limited (A$3.37, +3.1%),Ainsworth Game Technology Limited (A$3.77, +0.8%) spinning the wheel and winning. Tech stocks were also better led by Iproperty Group Limited (A$3.22, +5.2%),Carsales.Com Limited (A$10.91, +3.0%),#ADJ# and #FLN#. Healthcare stocks were mixed as ResMed Inc. (A$5.30, -3.3%) fell away but Csl Limited (A$67.13, +0.9%) rallied as did Ramsay Health Care Limited (A$45.85, +0.8%) as we expect to see some investors making way for the Healthscope IPO in the months to come.
Slotting in during extra time were TFS Corporation Limited (A$1.76, +6.7%),Liquefied Natural Gas Limited (A$2.26, +5.6%),Energy World Corporation Ltd (A$0.34, +6.3%),Iproperty Group Limited (A$3.22, +5.2%),Energy World Corporation Ltd (A$0.34, +6.3%),Adelaide Brighton Limited (A$3.56, +3.2%) and Domino’s Pizza Enterprises Limited (A$22.00, +2.5%) in large caps while in smalls Audio Pixels Holdings Limited (A$4.75, +18.8%),Coventry Group Limited (A$3.15, +12.5%),Perseus Mining Limited (A$0.48, +15.7%) and #TNG# shone. Bringing down a striker in the box were #NEC#,NIB Holdings Limited (A$3.10, -4.9%),#NPX# and Ansell Limited (A$19.19, -3.2%) with Brockman Mining Limited (A$0.055, unch) and Silex Systems Limited (A$1.07, -7.8%) suffering in the small caps.
Volume was big at nearly $4.2bn with the banks starring in the volume stakes taking out 4 of the top 5 spots. Aussie dollar firmed to 94.50 and digital tulips continue to draw in suckers to $683 and gold $1327.
Asian markets were mixed as Japan put on 1% and China and HK down around 0.13%.
Stocks and Stories
Rates remain on hold. So widely anticipated that no one even noticed I think. Talking heads will pour over the statement but rates will be on hold for a long time to come.Dollar to continue to feel lovingly supported by International investors and Japanese housewives.
Computershare Limited (A$12.53, +0.4%) had a small downgrade as the global share registry has forecast a $US40 million fall in net profit for the 2014 financial year following a major review of its business.
In August 2013, the company reported a 9.2 per cent fall in net profit to $157 million for the 2013 financial year
The directors of mining services company Coventry Group Limited (A$3.15, +12.5%) have fired their first salvo in response to investors demanding $25 million in shareholder capital be returned through fully franked dividends who have threatened to roll the board. Coventry Group has proposed returning $21 million through a series of five, 11¢ per share, fully franked dividends scheduled over the next 13 months.
Carsales.Com Limited (A$10.91, +3.0%) has entered the financial services sector by buying a controlling stake in online car finance company Stratton Pty Ltd for $60.1 million.
Macquarie Group Limited (A$58.99, -1.1%) continues to build its loan book with gross loans and advances up 4.9 per cent in May, equating to 58.7 per cent annualised loan growth mainly driven by mortgages.
Good news out of Asia with the Chinese PMI coming in at 51 which was in line and the Japanese Tankan survey also showed big Japanese companies across the board plan to increase capital spending by 7.4 %, against estimates of 6%, this fiscal year through March, more than a 0.1 percent gain they signalled three months earlier a report showed today.
Ansell Limited (A$19.19, -3.2%) No bounce here after announcing late yesterday that they were under taking the corporate restructure and writing off $124m.
Henderson Group PLC. (A$4.44, +3.3%) have been a huge winner in the last few years as they ride the bull market wave but the recent purchase of Geneva Capital management which looks after $6.3bn looks set to kick them along again.
Tomorrow’s News Today
BNP get hit with a $9bn fine for sanction busting! Seem to be happy to cop it sweet.
The Chinese anti-graft purge continues with high ranking military official Xu Caihou the latest casualty to face trial.
GM has now recalled 29m cars. Incredible.
Don’t you love the banks, Barclays in the UK uses its Luxemburg office to effectively reduce its tax bill. The boys there will be popping the Bolly as the 14 of them made a$1.4bn last year. And only paid $20m in tax. Way to go.
UK mortgage applications fall to 11 month low as BOE tightening starts to bite on lending criteria.
Argentina plays tonight and have now got a 30 day extension to negotiate on their debt with the ‘Vulture” hedge funds.
And finally the biggest and most anticipated event kicks off tonight. No it’s not sport but the Live Monty Python show in the UK. Tickets sold out for the opening night in 40 seconds. They have two main weapons, fear and surprise. And the comfy chair!
That is all