A quiet and dismal start to the week following on from last weeks’ disastrous 25 point drop. After managing a positive opening for five minutes , we succumbed to a 22 point loss to 5577 as the banks once again came under renewed attack. Only flesh wounds but death by a thousand cuts so far. Financials generally were weaker with Platinum Asset Management Limited (A$6.02, -1.0%),Magellan Financial Group Limited (A$13.20, -1.3%),Henderson Group PLC. (A$3.94, -1.0%) and Perpetual Limited (A$48.50, -1.6%) struggling as were property trusts like Dexus Property Group (A$1.18, -1.7%) and CFS Retail Property Trust Group (A$2.09, -0.9%).

Telcos were in demand as Telstra Corporation Limited (A$5.65, +0.2%) continued to firm, together with #TPG#,Amcom Telecommunications Limited (A$2.04, +1.5%),Hutchison Telecommunications (Australia) Limited (A$0.073, +4.3%) and Newsat Limited (A$0.30, +7.1%). Other industrials were also firm as Woolworths Limited (A$36.38, +0.2%) sold some pubs for $603m to Charter Hall Group (A$4.37, +0.2%).

In resource stocks Iron Ore stocks bucked the negative vibes on the commodity and managed to eke out modest gains in BHP Billiton Limited (A$35.66, +unch) and Fortescue Metals Group Ltd (A$4.00, +2.0%).Second liners didn’t fare too well with BC Iron Limited (A$2.20, -1.8%),Arrium Limited (A$0.74, +0.7%) and FMS# slipping. Energy stocks also slid with Woodside Petroleum Limited (A$42.67, -0.7%),Oil Search Limited (A$9.49, -0.9%) and Santos Limited (A$14.91, -1.3%) leading us down there.

Ex-Dividend today were Csl Limited (A$72.16, -1.7%) and Insurance Australia Group Limited (A$6.16, -4.9%) and jobs adverts did nothing to help the market especially given the numbers from Japan showing GDP shrank 7.1% annualised in the last three months. Not a good sign considering how much printing is going on there. China also chimed in with some record surplus numbers as exports to US and Zombieland went through the roof.

In the box seat today were #ZNZ#,Transfield Services Limited (A$1.645, +4.4%),Northern Star Resources Ltd (A$1.50, +3.1%),Mighty River Power Limited (A$2.14, +3.4%),Virtus Health Limited (A$7.97, +2.6%) and Toro Energy Limited (A$0.13, +42.9%),#PSY# in the smalls. More flesh wounds in Drillsearch Energy Limited (A$1.35, -7.5%),Senex Energy Limited (A$0.555, -5.1%),Mesoblast Limited (A$5.05, -4.4%),Iproperty Group Limited (A$3.27, -3.3%),Fairfax Media Limited (A$0.815, -4.1%) and Orora Limited (A$1.665, -3.5%) in the big caps whilst #PBT#,Coventry Group Limited (A$2.76, -4.8%) and Bougainville Copper Limited (A$0.36, unch) took it badly in the smaller end. Volume was modest but it was Monday so $3.2bn not too bad really. Asian stocks were muddled but China the standout up nearly 1% on eth export figures.Aussie dollar was back towards 94c at 93.66,digital tulips at $502 and gold at $1269.

Stocks and Stories

Charter Hall Group (A$4.37, +0.2%) has created a new partnership with HOSTPLUS to acquire a $603 million portfolio of pubs from the Woolworths-owned ALH Group (ALH).

#SYP# is deepening its network of brands, snapping up a Queensland chemist chain for $26.7 million.

Goodman Fielder Limited (A$0.63, -1.6%) slipped slightly today as the timeline for the takeover seems to be slipping again in the face of regulatory approvals.

China’s trade surplus for August has come in well ahead of expectations, up to $US49.8 billion against the previous month’s $US47.3 billion surplus, which was a record.
Analysts had been expecting a figure of $US49 billion. Annual export growth came in at 9.4 per cent, ahead of the consensus forecast of 9 per cent.

ANZ showed total job advertisements rose 1.5 percent to 135,569 per week on average in August. That was the highest average since March last year.Not sure how many are genuine jobs as lots seem to be fishing exercises by recruitment agencies!

Tomorrow’s News Today

Our Kiwi ‘kissin’ cousens’ hit a record close today at 5261 on a massive $136m of volume. And I thought it was quiet here. There you could hear a pen drop.

Looks like the UK government is wading into the do we fine BP another $18bn debate! Hopefully they will be more successful than the French Government with BNP’s fine.

Two dams down as Iraqi forces have captured Haditha Dam from IS following on from Mosul.Some good news.Only 143 air strikes by the US and a plan to come on Wednesday.

Three US companies seeking to use controversial takeovers to cut their US tax bills hold at least $21bn in “trapped” offshore cash that the deals could unlock.
According to data the biggest offshore cash piles held by companies pursuing so-called “tax inversions” belong to Medtronic, a medical devices group; AbbVie, a drugmaker; and Applied Materials, a technology group.

FOMC meeting in ten days, will be interesting as the Fed seeks to change the way they communicate on when rates will rise. No more QEIII, just low rates although with unemployment now so low in the US we shall see what Yellen has to say.US dollar strong Zombie Euro weak seems to be the future.UK pound under pressure as the Independence vote looms. Of course now the Pork Barrelling begins to bribe the Scots to stay loyal. Wasn’t it always thus!

GE announces that it is selling its appliance business to Electrolux for $3.3bn.

Alibaba (and the forty thieves) looks set to grab a rug and fly. Could be the biggest float ever! Starting the marketing now with this cult like company.

Talking of biggest ever. Destiny is calling. New online game starts this week with costs of $500m and 10m people expected to play. And there is the iPhone 6 later this week too.

That is all

Clarence
Xx

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