ASX 200 closed slightly higher on a late rally with a gain of 13 points to 5667 after the early rally faded to red at lunch though afternoon buyers remerged. Materials and the big banks the culprit as telcos utilities and industrials rose. Asian markets mixed with China up 0.37% and Japan down 0.38%. AUD weakened to 76.30c with US Futures down 10.

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The rumours of death have been grossly exaggerated. No new bad news is good news for oversold industrials. No known unknowns perhaps?

STOCKS AND SECTORS

  • Miners started the day soggy at the big end after the RIO -0.67 % numbers and never really recovered. BHP -1.24%, Fortescue Metals (FMG) -3.64%. Base metal stocks also in the dog house despite commodity price rises overnight South32 (S32) -2.65%, Alumina (AWC) -0.52% and Sims Metals (SGM) -2.61%.
  • Gold stocks still the ones. Resolute Mining (RSG) +3.30%, Gold Road (GOR) +2.59% and Evolution Mining (EVN) +0.85%. Peripheral mining services stocks also catching the bull by the horns. IPH Limited (IPH) +2.49%, ALS Ltd (ALQ) +1.35%, Seven Group (SVW) +0.90%
  • Energy stocks benefitting from higher crude prices with Origin Energy (ORG) +2.90%, Oil Search (OSH) +0.73% though Santos (STO) -0.26% continue to be the ugly duckling. Paladin Energy (PDN) +14.81% perked up after their recent consolidation though coal stocks weighed as Yancoal (YAL) -6.32% rattles the tin for a big equity raising for its Coal and Allied purchase from
  • Industrials was the where the action was. Oversold industrials like Domino’s Pizza (DMP) +5.18%, Vocus Comm (VOC) +6.73% and TPG Telecom (TPM) +4.09%. Some of the IT sector also ran with REA Group (REA) +2.19%, Superloop (SLC) +8.88% and Speedcast (SDA) +2.26%. We also saw good bounces in Aconex (ACX) +6.13% and iSentia (ISD) +7.14% as another two oversold underachievers were bought back. Surprises can be positive or negative. Both are bad news for traders.
  • Financials pretty wimpy in the big banks with the Basket slipping ever so slightly to $174.07 although insurers picked up on the bounce in AMP +3.98% and the takeover of Tower (TWR) +43.24%. Suncorp (SUN) +0.92% and IAG +1.20%.
  • REITs trotted out in style today on bind market moves with Westfield (WFD) +2.46%, Scentre Group (SCG) +2.25% and GPT +2.95%
  • Utilities were in the green zone on bond buying with APA Group (APA) +2.16%, Ausnet Services (AST) +1.56% and Meridien Energy (MEZ) +1.56%
  • Consumer stocks had a day in the sun with BWX +16.01%. Wesfarmers (WES) +1.31%, Woolworths -0.43%, A2 Milk (A2M) +2.61%
  • Speculative stock of the day: Berkut Minerals (BMT) +50.00% after announcing a deal to buy an option to acquire 100% of Kobald Minerals in Europe. Kobald holds rights to four cobalt deposits in the Czech Republic, Norway and Sweden.

CORPORATE NEWS

  • Rio Tinto (RIO) -0.67% out late last night with a US$500m share buy back in London and a US$5.1bn profit number. Dividend at US$1.70 fully franked was slightly higher than some had hoped for
  • Crown Resorts (CWN) +0.62% will expand its Southbank site to eight hectares after it won approval from the Andrews government to build a $1.75bn 90-storey tower. Once completed it will be Melbourne’s tallest building, at 322m, exceeding Eureka Towerby 25ms.
  • Fairfax Financial Holdings a Canadian investment and insurance company has agreed to buy New Zealand insurer Tower (TWR) +43.24% for $NZ197 million ($186.8 million) in cash Fairfax has offered NZ$1.17 a share for Tower, 48% more than Tower’s closing price.
  • Brambles (BXB) +0.38% Organisational changes. The new CEO is making his mark, with a change in structure and some management moves. BXB will be flattening its structure, streamlining reporting lines and emphasising BXB digital. Brambles’ Containers operations will no longer form a separate segment, and Peter Mackie and Jason Rabbino will both be leaving Brambles
  • AMP +3.98% Reported a net loss of $344m, with underlying profit down 56.6% to $486m. AMP also announce a share buy-back of up to $500m share buy-back. Final dividend of 14c. There were strong performances from AMP Capital, AMP Bank and New Zealand. Australian Wealth Management resilient in volatile market. A $415m loss in Wealth Protection reflects negative claims experience and capitalised loss.
  • Suncorp (SUN) +0.92% Net profit up 1.3% to $530m on revenue up 11% to $8.64bn. SUN said it is considering strategic options for the life insurance division. Earnings for the life insurance business fell 52%. There were natural hazard claims of $319m in the 1H, above the $300m allowance.
  • AGL Energy +4.35% Underlying 1H net profit up 3.7% to $389m. AGL expects underlying profit after tax for the full year to be in the top half of its previously disclosed guidance range of $720-800m, subject to normal trading conditions for the remainder of the year, as rising wholesale electricity price begin to flow through to the bottom line. The dividend was increased to 41c from 32c.

ECONOMIC NEWS

  • The Housing Industry Association said its survey of large-volume builders showed new home sales rose a seasonally adjusted 0.2 per cent in December from November, when they jumped 6.1%. Sales of houses dipped 1.6%, while apartment sales climbed 6.4%.

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  • Gold exports rose by 30% in 2016, adding $4.4bn to export receipts, while iron ore exports rose by 8.4% over the year, adding $4.1bn to Australia’s foreign revenue.
  • Across the ‘ditch’ the RBNZ has signalled rates will be steady for longer and says it wants a weaker dollar. Not Robinson Crusoe there Bro.

BOND CORNER

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ASIAN NEWS

  • Gotta love Trump. He phones most world leaders including our own Trunbull but he sends a letter to the Chinese President. Not quite a Dear John (or Xi) as he was seeking smoother ties between the world’s biggest economies. Xi has reached out to Trump three times since his election win. They had a phone conversation a week after the election in which Xi said cooperation was “the only correct choice” for ties.
  • Chinese H shares listed in Hong Kong rose to a 14-month high as punters piled into to relatively’ cheap’ equity valuations in car and financials stocks.
  • Iron ore futures in China are trading higher again, rising for six out of eight sessions, with values underpinned by a weaker US dollar and signs of strong demand in world’s top steel consumer China. Iron ore on the Dalian Commodity Exchange is up 1.7% at 646.5 yuan ($US94.12), while the most-active rebar contract on the Shanghai Futures Exchange was up 1.1% at 3234 yuan.
  • China’s foreign exchange regulator has said that risks from cross-border capital flows will be generally under control in 2017.
  • Moody’s has upgraded its credit outlook on Indonesia to “positive” from “stable“, praising its progress on reforms.
  • Singapore Telecommunications has hired three banks as it prepares for an initial public offering to divest more than 75% of its wholly-owned fibre broadband network unit.

EUROPE AND US

  • Chelsea Clinton’s husband has quietly closed his hedge fund, Eagleville Eagleville, based in New York, is in the process of returning money to clients. Meanwhile Goldman is closing its London internal hedge fund in a move unrelated to Brexit fears apparently.
  • US federal court blocks $48bn Anthem-Cigna
  • The Greek crisis (Crisis, what crisis?) is going to be back in the news very soon. The soon to be new ambassador to the EU said the Eurozone might break up, and the Netherlands warned it will not take part in another bailout if the International Monetary Fund drops out of the process. The IMF and the Eurozone nations which together bailed out Greece’s government are in a fierce dispute over the next steps in its €86bn bailout programme.

And finally………….

Last year I had air coin installed.Today, I got a call from the contractor who installed it. He was complaining that the work had been completed a whole year ago and I still hadn’t paid for them.

Hellloo………… Just because I am blonde doesn’t mean that I am automatically stupid. So, I told him just what his fast talking sales guy had told me last year, that in ONE YEAR these windows would pay for themselves!

Hellloo? It’s been a year! I told him. There was only silence at the other end of the line, so I finally just hung up.
He never called back.

I bet he felt like an idiot.

Clarence

XXXX

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NT Markets

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