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END OF DAY REPORT
What happened today?
ASX 200 closes up 71.4 at 5113.5 on the day’s high as banks recover on bargain hunting. Volume was very light in school holiday trade. Materials continue to drag. China slightly weaker. US Futures up 21.
After a slow start the banks took up the challenge and pushed ahead, up around 1.5%. Confidence grew after M2 Group (MTU) +13.42% and Vocus Communications (VOC) -7.4% announced a new tie up, following the recent marriage of TPG (TPM) +0.37% and iiNet. The new $3bn company is set to finalise the deal early next year assuming they can get regulatory approval.
- Broad based gains across financials and industrials. AGL (AGL)+3.58% was the stand out in the defensive utility sector as the company pushes its renewables credentials. Insurers were also very strong, AMP +1.98%, IAG+ 2.29% and QBE Group (QBE) +2.02%. Wealth managers Macquarie Group (MQG) +1.81%, Platinum Asset Management (PTM) +1.79% and BT Investment (BTT) +1.76% all stronger.
- Telecom stocks were very firm on takeover news. Telstra (TLS) +1.23%, TPG (TPM) +0.09% and Spark NZ (SPK) +1.07% all benefiting from the Vocus and M2Group announcement.
- Discretionary spending stocks were also firm, gamers and gamblers came up cherries with Tatts Group (TTS) +3.01% and Echo Entertainment (EGP)+2.27% the best of the bunch. Retailers were also in demand with AP Eagers (APE) +2.33%, Myer (MYR) +2.78% and Super Retail (SUL) +2.04% outperforming.
- Infrastructure stocks were stronger with Sydney Airports (SYD) +1.97%, Auckland Airports (AIA) +2.42% and Transurban (TCL) +1.58% doing well.
- Healthcare stocks though were in the doldrums as the government has announced a review into the Medicare system with a focus on expensive tests and over servicing. Ramsay Health Care (RHC) -0.33 %, Sonic Healthcare (SHL) +0.42% and Primary Healthcare (PRY) -0.25% all lagging behind.
- In resource land, energy stocks were better with Woodside (WPL) +3.13% Origin Energy (ORG) +4.28% and Z Energy (ZNZ) +2.94%. Beach Energy (BPT) -1.99% fell back though as news of its aborted sale of an Egyptian asset to Rockhopper Exploration, an AIM listed UK company. Big miners though failed to launch with BHP + 0.92% slightly firmer in late trade but Fortescue Mining (FMG)-0.83%, RIO -0.33% and Oz Minerals (OZL) -0.29% all gave up ground again.
- In the speculative corner today Pan Continental Oil (PCL) +100% announced that Namibia was showing considerable potential. PCN is fully carried and the company said that it was considering divesting part of its 30% interest to strengthen the balance sheet.
- ANZ is close to announcing the winner in the race for Esanda. Macquarie Group (MQG) +1.81% is still in the mix.
- Second best is now good enough for M2Group (MTU) +13.42% as it has announced a merger with Vocus Communications (VOC) -7.4%. M2 Group shareholders will get 1.625 Vocus shares for every M2Group share. Both companies will be equally represented on the board with David Spence continuing his leadership. M2 Group is the fourth largest telecommunication company and owns Dodo and iPrimus. The deal is hoped to be signed and sealed in early 2016 but depends on the ACCC agreeing.
- Atlassian has announced that it will seek a listing on NASDAQ with a $3bn plus listing.
In Asian markets today, Japan eased 1.29%, Shanghai was quiet in front of the PMI numbers later this week and was down 0.55% at our close. Singapore has entered a bear market, now down 20% from its recent peak. Another 1.4% today.
- Industrial profits tumbled 8.8% in August from a year earlier, with the biggest drops concentrated in producers of coal, oil and metals, the National Bureau of Statistics said Monday in Beijing. It was the biggest decline since the government began releasing monthly data in October 2011. Profits in coal mining plunged 64.9% in the first eight months of this year from the same period last year, while oil and gas profits tumbled 67.3 %.
As market commentators continue to play guess the real Chinese GDP number rather than the ‘official’ number of 7%, there is another index called the Li Ke Qiang. It is calculated by combining three different measures, railway cargo volumes, and electricity consumption and bank loans.
Comcast Corp. will acquire a 51% stake in Japanese theme park owner USJ Co as the largest US cable company seeks to expand its business overseas. Comcast’s NBC Universal unit will pay $1.5 billion for the stake in the owner of Universal Studios Japan in Osaka city.
Ahead in Europe:
- FTSE down 23 to 6086
- DAX down 74 to 9615
- CAC down 38 to 4442
Interesting vote in Catalan over the weekend on independence from Spain.
US personal consumption numbers, income, spending and pending home sales from the US.
And finally, Shell has announced that it will stop drilling in Alaska after a disappointing drill result, citing high costs and regulations. Suspect a large write down is coming as Shell values their Alaskan position at around $3bn.