ASX 200 finishes the week losing another 11 points to 5727 after a 5707 low as banks continue to fall whilst gains in miners saved the market from a worst close. Builders recover led by a bounce in James Hardie. Asian markets modestly higher with Japan up 0.17% and China up 0.06%. AUD 74.25c and US Futures up 3.
- For the week, the Big Bank Basket has fallen from $175.79 to $169.96 or 3.4%. Feels like more.
- The ASX 200 has dropped from 5837 to 5727 down 1.9%
- BHP and RIO the big winners this week, up 2.1% and 5.77% respectively.
STOCKS AND SECTORS
- Miners better across the board with BHP +1.38% benefitting from stable iron ore prices and plans for the oil business. RIO +2.33% a superstar at the moment and Fortescue Metals (FMG) +5.65% seeing some bargain hunting driving it higher. Base metal stocks also higher with Oz Minerals (OZL) +5.73%, Western Areas (WSA) though unchanged and Iluka Resources (ILU) +1.21%.
- Energy mixed with Santos (STO) +0.43% and Oil Search (OSH)- 0.28% after the AGM.
- Gold miners sagged as bullion fell. Newcrest (NCM) -1.79%, Northern Star (NST) -4.54% and Resolute Mining (RSG) -2.87%. Gold Road (GOR) +6.67% a winner on corporate moves.
- Banks and financials was again under pressure with the Big Bank Basket (BBB) down to $169.96 with insurers modestly lower too. Suncorp (SUN) -1.20% the worst of the bunch.
- Industrials eased slightly as consumer staples slid, Wesfarmers (WES) -0.92% and Woolworths (WOW) -1.11% together with Coca Cola Amatil (CCL) -0.76%. Some good moves in agri stocks with Huon (HUO) +6.52% and Bellamy’s Australia (BAL) +5.57% both doing very well. Some selective buying too in retail stocks but far from convincing with Harvey Norman (HVN) +0.26% and Super Retail (SUL) +1.61%.
- Telcos found friends again on defensive qualities Telstra (TLS) +0.45%, Vocus Group (VOC) +1.96% and TPG Telecom (TPM) +0.68%. IT stocks firmer with Xero (XRO) +0.88% and Mitula Group (MUA) +0.60%.
- Healthcare narrowly mixed as Resmed (RMD) -0.44%, Cochlear (COH)+0.08%, Ramsay Health Care (RHC) -0.07% succumbed to selling although CSL +0.95% bucked the trend.
- Speculative stock of the day: Xped (XPE) +27.27% after the company delivered the Lenze App for both Android and IOS. The APP will control the iCharger and iPark products.
- Commonwealth Bank (CBA) -0.72% is set to announce bigger deposits, smaller discounts and the scraping of some rebates in a bid to discourage borrowers from applying for interest-only loans.
- Sydney Airport (SYD) -0.82% Released some positive traffic numbers with 12.1% growth in international traffic in April. A busy Easter and school holiday period it seems. April numbers year to date are up 7.1% for international and 0.4% for domestic.
- G8 Education (GEM) – Suspended from quotation last night as the company terminated its agreement with the HK based investment company CFCG for failing to pay the outstanding $150m for the second tranche of shares placed with them back in February.
- Gold Road (GOR) +6.67% Gold Fields Limited has acquired another 74.8m shares at 86c a 27% premium to the closing price. Gold Fields now has 10% of the company.
- Origin Energy (ORG) -1.81% Has entered into an agreement with Jemena Gas Pipelines to sell its Darling Downs Pipeline Network for $392m. ORG has now divested around $1bn worth of assets.
- APN Outdoor (APO) +1.62% and Ooh!Media (OML) -0.45% have scrapped their merger plans. According to the press release any restrictions that the ACCC placed on them to allow the merger to proceed would have compromised the merits of the deal.
- Ooh!Media (OML) -0.45% has updated guidance to an EBITDA of between $88m-$92m and has noted the increasingly short nature of the booking lead time. The company also announced a $35m-$40m capex on increasing the number of digital signs and data systems.
- Computershare (CPU) +0.70% Media reports in India suggest CPU will sell its 50% interest in Karvy Computershare. The company said it had held discussions but no certainty that it will lead to a transaction.
- Oil Search (OSH) -0.28% AGM this morning. Record production was offset by lower prices but the company is in talks with ExxonMobil/Total on PNG LNG projects.
- Mortgage Choice (MOC) +0.49% The company has delivered record growth in Q3. Strong growth in mortgage broking and financial planning with a 6% increase in home loan applications and a 4% growth in approvals. The value of FUA for the planning business surged by 59%.
- Southern Cross Media (SXL) -5.43% is selling its Northern NSW TV operations to WIN for $55m in two tranches. The company has also provided a trading update with EBITDA now likely to fall below last year’s $168m. Previously the company had expected a range of $177m-$183m. Advertising markets remain challenging and short of expectations.
- Nothing significant today
- Malaysia’s economy grew 5.6% from a year earlier driven by household spending and a recovery in exports that was helped by higher oil prices.
- Two Chinese SU-30 fighter jets intercepted an American military aircraft over the East China Sea on Tuesday, according to the U.S. Air Force.
EUROPE AND US
- British consumers bought 2.3% more in April than they did in March, beating forecasts of 1% growth and raising hopes that the economy is bouncing back from its slow early start to the year.
- We are so alike so many countries. The UK has its own energy price problems just as we do. The government’s solution was to threaten a cap on costs from energy suppliers. The new Tory manifesto is promising to make energy the cheapest in Europe. Previously Theresa May had promised a hardline, market-wide cap on household energy tariffs but the party line appears to have softened following fierce criticism on competition issues. Fracking looks set to be expanded with plans for increasing the shale industry.
- Latest polls show the Conservatives romping home on June 8th.
- Would you pay US$110m for this painting by Jean Michel-Basquiat. It has just sold in New York to a Japanese billionaire. It was the highest ever paid for an American artist. The painting last traded at US$19,000 in 1984. And you thought Sydney and Melbourne housing was a good investment.