What happened today?
- At the close we finishedup 23.8 points at 5589.9 after a low of 5538. Volume was on the low side as you would expect on a Monday pre-reporting season.
- After a subdued start to the day following overseas weakness, the market ground out a positive day primarily as a result of a rebound inBHP +0.99% and RIO -0.02% after a better Chinese iron ore price, with other miners getting dragged up in their wake. Independence Group (IGO) +1.02% Oz Minerals (OZL) +0.53 % and Sirius(SIR) +0.96 % the best of them. At the current Aussie dollar rate, BHP will be paying a 6.8% fully franked dividend which is underpinning the share price and will continue to do so. Biggest losers today in the sector were Atlas Iron (AGO) -70% and Cudeco(CDU) –41.47%. Gold stocks also bounced hard on the declining Aussie dollar and a slightly better price of gold in Asia, Newcrest (NCM) +4.53%, Evolution (EVN) +4.48% and market favourite Northern Star (NST) +7.43%. Energy shares also on the green today led by Woodside (WPL) + 0.59%, Origin (ORG) +1.27% and Oil Search (OSH) + 0.97%.
- Banks suffered from a malaise most of the day before an end of day rally helped them into the green. Rates on home loans are rising for interest only loans which is looking to weigh on growth and profits going forward. It looks like the market has taken a dim view of the chance of a sustained rally as the property market is the biggest driver of future growth. Other financials fared better with insurersSuncorp(SUN) +0.57 %, QBE + 0.27 % and Medibank Private (MPL) +0.49%
- Good strength today from the REIT sector withWestfield Corp (WFD) +4.45%,Dexus (DXS) +2.66% and General Property Trust (GPT) +2.05%.
- Banks are continuing to raise rates to dampen the appetite for investment home loans. National Australia Bank is raising interest rates on interest-only home loans. The bank said it would raise interest-only rates by 0.29%; this follows other moves last week ANZ and Commonwealth Bank to raise rates for investment loans.
- The rest of the market was mixed with Health Care slightly better, as wasTelstra(TLS) +0.47% and Qantas (QAN) +2.17%. Woolworths (WOW) –0.07% andWesfarmers (WES) +0.05% both slid a little.
- iSelect(ISU) +15.99% had a great win today soaring after agreeing to a settlement with NIA for $42m leaving it with a strong $100m in cash on the balance sheet now. The market was not expecting a result as good as this and it is now back to the post float high.
- iiNet(IIN) +0.32% shareholders have approved a $1.56 billion takeover offer fromTPG Telecom (TPM) +0.88% in a move that will create Australia’s second-biggest provider of fixed-line Internet services. TPG will now become a telecommunications powerhouse with 1.7 million broadband subscribers and the power to reshape the Australian internet market. This places it behind Telstra’s 3 million accounts and ahead of Singtel-Optus’ 1.03 million users with M2 Group a distant fourth. The deal still needs ACCC approval, which is due around August 20th.
- Navitas(NVT) -6.36% had a shock to the system today as it announced a net profit that was looking flat for next year after a 42% rise. The company reported an impairment charge of $19.5m as it wrote down the value of some of its discontinued programs and the problem with Macquarie University. There was also some visa changes and increased competition.
- Atlas Iron(AGO) -70% resumed trading today after a three month suspension as it looked to raise money at a deeply discounted 5 cents. The stock came back on having failed to raise the $185m that it was after with only $87 raised and the stocks fell a massive 70% to around 3.6 cents, which together with the attaching free 2107 option trading at 0.6 cents. Recent investors were nearly square on their support package but not much joy for long suffering shareholders who did not subscribe for the recent issue. The stock is now a huge call on a recovering iron pre price but with the price still trending down it could well end up as a binary outcome.
- Ten Networks(TEN) + 2.38% today announced that Chairman and CEO Hamish McLennan has resigned and will be replaced by relatively unknown COO Paul Anderson. Looks like Hamish will be heading off to a News International role after sewing up the recent corporate deal with Foxtel. He announced on his departure that his role is complete. Good to know.
- Asian market resumed their recent weakness with Shanghai down 3.7%, Hong Kong down 2.6% and Japan down 0.95%