Yo!

ASX 200 finished the week on a strong and unexpected note with the index closing up 45.5 points at 5753.5 fading into the close. Across the board gains led by banks and industrials. Miners slightly weaker and gold miners falling as risk on again. Asian markets better led by Japan up 0.81% and China up 0.14%. AUD 76.15c and US Futures up 51pts.

For the week, the ASX 200 has slipped from 5800 to 5754 (-0.8%) with yet another test and bounce off the 5700 level. The Big Bank Basket has fallen from $183.12 to $ 181.00 with BHP down 2.3%, Rio Tinto (RIO) down 4.4% and Fortescue Metals (FMG) down 6.5%.

STOCKS AND SECTORS

  • Miners missed out a little on the buying today with BHP +0.29%, Rio Tinto (RIO) +0.18% and Fortescue Metals (FMG) +unchanged after paying off another US$1bn from their credit card. Base metal stocks eased too with South 32 (S32) -1.09% with Independence Group (IGO) +1.10%.
  • Gold miners suffered as a sell down in Evolution Mining (EVN) -3.76% put pressure on the sector. St Barbara (SBM) -3.47% and Saracen Mineral (SAR) -3.30%.
  • Energy stocks modestly higher as Caltex (CTX) +3.04% found friends following the refiner margins update yesterday. Santos (STO) +1.37% was the best of the oils with a good bounce too from Yancoal (YAL) +9.72% on thin volume.
  • Industrials the stars of todays’ show. Consumer stocks rallied hard with Wesfarmers (WES) +1.11%, Woolworths (WOW) +1.29% and surprise bounce from Asaleo Care (AHY) +5.68% fighting its way back. Gaming stocks also doing well Tatts Group (TTS) +1.41%, Tabcorp (TAH) +0.67%, Aristocrat Leisure (ALL) +1.20% and Crown Resorts (CWN) +0.96%
  • Healthcare in the green led by CSL +0.92% on hopes for US Health reform. Cochlear (COH) +1.60% Primary Health Care (PRY) +2.38% and Ansell (ANN) +1.16%.
  • IT and Telcos also seeing bargain hunting though Hutchison (HTA) -6.25% defied the trend. Telstra (TLS) +1.55% put in a respectable performance as did Vocus Group (VOC) +0.95% and TPG Telecom (TPM) +2.11%.
  • Banks and financials a good day with the Big Bank Basket up to $180.73. Insurers did well QBE +1.99% as did REITs with Scentre Group (SCG) +1.94%.
  • Speculative stock of the Day: Southern Hemisphere Mining (SUH) +48.15% despite a ASX ‘please explain’ query. The company knows of no reason for the rise. Seems that someone does though.

CORPORATE NEWS

  • Slater and Gordon (SGH) +13.64% received an all clear from ASIC this morning in relation to the accuracy of the company accounts. Seems there were no breaches of the law.
  • Downer EDI (DOW) -20.71% after a tepid response to its underwritten capital raising of $1bn to fund the unpopular purchased of Spotless Group (SPO) for 115c cash. Institutions took up a mere 66% of the stock at 595c. The rights are trading DOWR is the code and trade until 4th
  • Syrah Resources (SYR) +5.77% updated the market on its Balama Graphite project with commissioning on schedule for Q2 2107 and the budget remains unchanged at US$193m.
  • Evolution Mining (EVN) -3.76% the biggest shareholder La Mancha has sold down part of its holding in a complicated equity derivative collar transaction. Citi completed a bookbuild of 87.4m at 200c to a range of institutional investors.
  • Collins Food (CKF) -9.01% completed its $54.5m capital raising at 525c to fund the purchase of 16 KFC outlets (leys not call them restaurants) in Holland.
  • Sky and Space Global (SAS) +10.26% has secured a new contract for its 3 Diamonds nano-satellite operations. Sal-Space Africa is set to become the first wholesale operator for the new commercial contracts.

BOND CORNER

bonds 234

ECONOMIC NEWS

  • Foreign buyers are purchasing new housing in New South Wales and Victoria at a rate of $8bn a year. Using FOI to extract the data Credit Suisse estimates “foreigners are acquiring 25% of newly completed supply in NSW and 16% in Melbourne, or 21% if we combine the two states”. The total value of new houses in both states was $39bn over the relevant 12 months. Chinese buyers, defined as those from mainland China, Hong Kong, Macau and Taiwan, accounted for 80% of the properties sold to foreign buyers.
  • Westpac and ANZ have moved to raise their rates for interest-only loans. Westpac said it was lifting fixed rates, effective immediately, on a range of interest-only loans by between 17bps and117 bps. ANZ has raised rates between 11bps and 20bps. CBA said its standard variable rate for interest-only owner-occupier mortgages will increase by 25bps to 5.47%.

ASIAN NEWS

  • Spare a thought for shareholders in Huishan Dairy where the share price has dropped 85% today knocking US$4.2bn off the market Why? Short seller Carson Block’s Muddy Waters Capital LLC said in December the company is “worth close to zero” and questioned its profitability in a report. Huishan said the allegations in the report were groundless and contain misrepresentations.

EUROPE AND US

  • Deutsche Bank has made a commitment to London with its new HQ in the City at 21 Moorfields.
  • Tonight’s the night. Deal or no deal for Trump and his plan for a repeal and replace on Obamacare. Apparently if it fails he will just move on to tax reform. Markets like that.
  • Funds invested in US shares recorded US$9bn of withdrawals within the week to March 22, the largest weekly redemption since last June. The outflows diminished the additions to the asset class since the election to roughly US$90bn.

etf 24

And finally…………….

An older couple, who were both widowed, had been going out with each other for a long time.

Urged on by their friends, they decided it was finally time to get married. Before the wedding, they went out to dinner and had a long conversation regarding how their marriage might work. They discussed finances, living arrangements, and so on.

Finally, the old gentleman decided it was time to broach the subject of their physical relationship. “How do you feel about sex?” he asked, rather tentatively.

“I would like it infrequently “, she replied. The old gentleman sat quietly for a moment, adjusted his glasses, then leaned over towards her and whispered, “Is that one word or two?”

 

Have a great weekend

Clarence

XXXX

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NT Markets

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