A snapshot of today:
What happened today?
ASX 200 up 4.1 points to 5155.7 after touching 5229 earlier in a rush of blood to the head. Energy stocks run out of fuel as banks and miners give back gains. Asian markets firm with China up 0.45% and Japan 1.26%. US futures down 20. Hardly a surprise though.
Following the massive gains on the US markets on Friday, our market burst out of the blocks with an 80-point gain at one stage, topping 5229 before wariness and scepticism came back to the fore. From 10.30am it was downhill all the way, with no follow through and the banks wilting in the midday sun. Commodities continue to spoil the party and we only just kept our head above water.
- Financials gave back most of the early gains as National Bank (NAB) -0.17% updated the market with its planned IPO of UK Clydesdale Bank. Westpac (WBC) +1.05% the best of the bunch.
- REITs were firm following some M&A activity from Dexus (DXS) +1.05%.
- Insurers and wealth managers were mixed. Challenger Finance (CGF) -0.34%, BT Investment Management (BTT) -1.03% and Magellan Financial (MFG) +2.67%.
- Gold stocks were in demand following a 2% rise in the bullion price on Friday.Northern Star (NST) +5.08%, Evolution Mining (EVN) +5.37%, Newcrest (NCM) +2.92% and OceanaGold Corp (OGC) +3.11%.
- Energy stocks were smashed (-4.5% for the sector) as OPEC went rogue and declared it was free-for-all season with every man for himself. Looks like OPEC has busted itself in its rush to rid the globe of that pesky Russian and US production.Santos (STO) -9.93% was the big loser as the rights issue stock hit the market, pushing it well below the recent clearing price of 410c and the capital raise price of 385c. Oil Search (OSH) -5.41%, Woodside (WPL) -3.68%, Origin (ORG)-5.54% andBeach Energy (BPT) -9.71%.
- Miners tried really, really hard to buck off the negative vibe but ultimately failed.BHP +0.33% eked out asmall gain but others fared worse. RIO -0.18%, Fortescue Metals (FMG) -1.85% and Arrium (ARI) -11.43%
- In the industrials, Telcos were a little weaker. Telstra (TLS)-1.66% and TPG (TPM) -1.69% as were health care stocks Regis Healthcare (REG) -2.68%, Healthscope(HSO) -2%, Ramsay Health Care (RHC)-0.52% and ResMed (RMD) -1.52%.
- Speculative stock of the day: Updater (UPD) +72.5% floated today on the ASX. The US company that basically updates your details when you move raised $22m to value the company at $140m. Certainly one of the IPOs of the year.
- iSelect (ISU) -11.11% as private equity buyers and the board could not agree on terms for a takeover bid. The company will not focus back on its strategy and the 10% buy back.
- Broadspectrum (BRS) +47.65% was back in the foreign invaders sights todays as Ferrovial launched another takeover bid for the company, formerly known as Transfield Services, which runs our detention centres. It was only one year ago that the Spaniards were prepared to pay 200c. Now they are only paying 135c in a bid worth $715m.
- McGrath (MEA) -12.62% first day today as a listed company did not go too well. Despite all the hype of being the first listed Australian real estate agent, the stocks failed to inspire. Remember when Slater & Gordon was the first listed lawyers. Existing investors, including CEO John McGrath, sold 31 million of their shares as part of the IPO, which raised $129.6 million.
- A rare success story from private equity at least for shareholders in Estia Health(EHE) -2.23% as it has bought rival Kennedy Health Care which operates eight facilities with 959 beds. Following the acquisition, Estia will have acquired 1690 new beds for a total $399.4 million in the 2015-16 year.
- Investra Office Fund (IOF) +7.31% is in talks with Dexus (DXS) +1.05%, with Dexus looking to buy IOF in a $2.5bn deal. Dexus has offered 0.424 and 82 cents in cash for each IOF valuing it at 411 cents.
- National Bank (NAB) -0.17% announced the proposed demerger of the UK Clydesdale bank with shareholders getting 75% and a 25% IPO to institutions. The scheme will be voted on 27 January with expected completion in February. Eligible NAB shareholders will get one CYBG for every four NAB shares. They will be listed on the London Stock Exchange and the ASX.
- Iluka Resources (ILU) +1.86% pulled the pin on its bid for Kenmare Resources PLC following the biggest shareholder being unwilling to support the deal.
- Job ads in newspapers and on the internet rose 1.3%, the fourth straight month of growth. Ads were 12.3 % higher on November last year. Internet ads climbed 1.4%, while newspaper ads fell 4.3%.
- Asian markets were slightly firmer following gains in the US and the USD.
- China is set to take the helm of the G20 next year and is already looking at setting the agenda. Having got the yuan into the reserve currency basket it is now looking at ways to strengthen the basket and potentially some commodities.
In Europe and the US
- In France, the Far-right party is on course for its first regional election victory following terrorist attacks last month.
- Greece has approved its austerity budget for 2016. The budget makes €5.7bn in public spending cuts including €1.8bn from pensions and €500m from defence. It also includes tax increases of just over €2bn. Despite the cuts, the budget will still have a greater deficit than the 2015 budget.
- Aussie hit Atlassian will list later this week with the ticker code TEAM. Lovely that the US has vanity plates. The IPO will raise around $350m resulting in a valuation of close to $3.5bn.
- As OPEC falls apart it is worth looking at how much it costs every producer to pump a barrel of oil.
- The Bank of International Settlements has said financial markets are experiencing an ‘uneasy calm’. In the bond market, “a number of anomalies suggest that all is not well,” said Claudio Borio, the head of the monetary and economic department at BIS. He also warned the amount of bad loans in the Eurozone is “too high”.
- Looking ahead:
- FTSE +42 points.
- DAX -74 points.
- CAC -16.50 points.
And finally authorities in Finland are considering giving every citizen a tax-free payout of €800 ($1500) each month. Under proposals being draw up by the Finnish Social Insurance Institution, this national basic income would replace all other benefit payments, and would be paid to all adults regardless of whether or not they receive any other income. Could catch on.