October begins with market slide
October 1, 2009
The local market weakened this morning as September’s gains made way for a lacklustre start to the new month. Banks and consumer discretionary stocks outperformed in September, but were tracking lower by lunch today.
By midday, the All Ords was down 18.9 points to 4,720.4, while the ASX/200 slid 21.4 to 4,722.2. Over 1.3 billion shares worth around $1.6 billion had changed hands.
The local equities market continued its run in September, finishing the month up 5.9% at 4,744 points. The market is up around 50% from March 2009 lows, but still down 30% from the pre-crisis November 2007 highs.
Banks have been among the top performers of the local market, up 38% for the quarter ended September, versus the market’s 22% rise. However, the sector was on the back foot this morning, down 0.8%.
The top performer among the big four was ANZ even after it lost 5c, or 0.2%, to $24.34. Meanwhile, CBA fell 55c, or 1.1%, to $51.20.
Macquarie Group announced the acquisition of Wall Street brokerage firm, Fox-Pitt Kelton as it continues to reinvent itself. This is just the latest in a series of additions to its equities markets business with the group already having acquired Tristone Capital Energy and Constellation Energy in 2009. Macquarie will pay US$147 million for the acquisition.
Macquarie was trading down $1.43, or 2.4% to $57.36.
The Property Trusts sector was down 0.8%, largely on Westfield’s weakness. The heavily indexed company was off 36c, or 2.6% at $13.54.
Goodman Group outperformed, gaining 2c, or 3% to 68.5c. Vanguard Investments Australia became a substantial shareholder in the group, lifting its stake to around 5.1%.
Consumer Discretionary stocks shed 0.7%, giving up some of yesterday’s gains which were spurred by retail sales data. The better than expected reading eased concerns that the Aussie consumer would retrench as the impact of government stimulus initiatives began to fade.
David Jones managed to build on yesterday’s rise. This morning its shares were up 5c, or 0.9% to $5.89. However, Harvey Norman, Billabong and JB Hi-Fi all backtracked, possibly on concerns about the increased likelihood of interest rate hikes in the near term and the effect it could have on consumers.
Recent data showing the economy was normalising has spurred speculation that the RBA would begin normalising its interest rate settings. The market is pricing in a 45 basis point increase in the cash rate by year-end, while at least one analyst is tipping 50 basis point increase as soon as November.
Backing this view, today the Aussie PMI found that manufacturing grew for the second consecutive month, with the index up 0.3 points to 52 points in September. This is the highest reading since December 2007.
Consumer Staples were off 0.3% with Woolworths losing 2c, or 0.1% to $29.23. A Merrill Lynch analyst said Woolworth’s foray into the hardware market could cost around $623 million over the next five years.
Wesfarmers fell 27c, or 1% to $26.22.
Energy shares outperformed the market, rising 0.7%.
NYMEX crude was up 5.7% in US trade overnight. The rise was fuelled by a larger than expected decline in crude inventories, which suggested strengthening demand. Like other US$ traded commodities, crude also benefited from the greenback’s weakness.
Woodside Petroleum was up 76c, or 1.5% to $52.89, while Santos added 12c, or 0.8% to $15.32. The latter was downgraded by UBS following a review of its commodity and FX forecasts.
Materials and Resources declined 0.5% even as base metals traded higher on the LME, with Nickel and Zinc outperforming, up 4.5% and 4.7% respectively.
BHP shed 42c, or 1.1% to $37.31. Yesterday, BHP said it had sent its inaugural uranium shipment from Olympic Dam to China.
Rio sank 62c, or 1% to $58.62, while iron ore specialist Fortescue shed 8c, or 2.1% to $3.74.
Yesterday, Fortescue said its deal with China Iron and Steel Association and Baosteel to supply iron ore at a 35% discount to the 2008 benchmark had fallen through.
Gold producers defied the trend after Gold futures rallied 1.5% overnight, settling above the key US$1000/oz psychological level. The spike closed out the precious metal’s best quarterly performance since early 2008.
Lihir added 9c to $2.89, while Newcrest Mining gained $1.05 to $32.95. Both were up around 3.3%.
Despite Tuesday night’s encouraging housing market figures, US housing leveraged construction materials makers, James Hardie and Boral continued to struggle. Boral is also significantly exposed to the NSW market, where yesterday’s building approvals data suggested a recovery.
James Hardie was off 3c to $7.83, while Boral fell 10c to $5.99.
Among Industrials, Leighton Holdings shares lost 49c, or 1.4% to $35.68 by lunch.
The stock backtracked even after Credit Suisse neutralised its view on the stock, noting that it was increasingly positive on Australian infrastructure markets and the company’s ability to grow its domestic work in had. In particular Credit Suisse cited impetus from government infrastructure spending and resource related infrastructure.
Also pressuring the sector, Brambles fell 20c, or 2.7% to $7.88.
However, their heavyweight industrial peers managed to advance, pegging the sector’s losses to 0.4%.
Qantas outperformed, trading 7c, or 2.4% higher at $2.93.
Around the region, the Nikkei 225 fell 142.9 to 9,990.4 and the Straits Times Index was off 13.9 to 2,658.6. Closer to home, the NZSE50 added 21.6 to 3,182.7.
Spot gold was trading at US$1006.38 per ounce, and the Aussie continued to strengthen against the US$, buying US$0.8832.
iCash and Metcash sign agreement
iCash Payment Systems and Metcash have signed an agreement enabling iCash to become part of Metcash Advantage. The ATM manufacturer and operator said the program provides Metcash customers with a comprehensive range of technology based products and services.
At lunch, iCash shares were trading at 6.6c, while Metcash shares were trading at $4.50.
Graincorp secures more trains
GrainCorp said it had secured three more trains to meet its logistics requirements across three locations in Queensland. The contract, with the Australian Railroad Group (“ARG”), a subsidiary transport and logistics company, QR was for three years the company said.
At noon, Graincorp shares fell by 18c to $8.85.
Campbell Bros to acquire PearlStreet for $87m
Campbell Brothers said it intends to launch a takeover offer for PearlStreet Limited (PST) of 56c per share, a 31.8% premium to the closing price Wednesday. The proposed offer values PearlStreet at $86.7 million.
At midday, Campbell Brothers shares were down 43c to $29.59, while PearlStreet shares were off by 4c to $42.5c.
Macquarie acquires FPK for US$130m
Macquarie Group announced it had entered into an agreement to acquire US based specialist investment bank Fox-Pitt Kelton Cochran Caronia Waller LLC (“FPK”). Macquarie said the transaction consideration consists of US$130 million in equity value, plus US$16.7 million of long-term liabilities, less cash on balance sheet at financial close.
Half way through the day, Macquarie shares were trading at $58.79.
By midday, the All Ords was down 18.9 points to 4,720.4, while the ASX/200 slid 21.4 to 4,722.2. Over 1.3 billion shares worth around $1.6 billion had changed hands.
The local equities market continued its run in September, finishing the month up 5.9% at 4,744 points. The market is up around 50% from March 2009 lows, but still down 30% from the pre-crisis November 2007 highs.
Banks have been among the top performers of the local market, up 38% for the quarter ended September, versus the market’s 22% rise. However, the sector was on the back foot this morning, down 0.8%.
The top performer among the big four was ANZ even after it lost 5c, or 0.2%, to $24.34. Meanwhile, CBA fell 55c, or 1.1%, to $51.20.
Macquarie Group announced the acquisition of Wall Street brokerage firm, Fox-Pitt Kelton as it continues to reinvent itself. This is just the latest in a series of additions to its equities markets business with the group already having acquired Tristone Capital Energy and Constellation Energy in 2009. Macquarie will pay US$147 million for the acquisition.
Macquarie was trading down $1.43, or 2.4% to $57.36.
The Property Trusts sector was down 0.8%, largely on Westfield’s weakness. The heavily indexed company was off 36c, or 2.6% at $13.54.
Goodman Group outperformed, gaining 2c, or 3% to 68.5c. Vanguard Investments Australia became a substantial shareholder in the group, lifting its stake to around 5.1%.
Consumer Discretionary stocks shed 0.7%, giving up some of yesterday’s gains which were spurred by retail sales data. The better than expected reading eased concerns that the Aussie consumer would retrench as the impact of government stimulus initiatives began to fade.
David Jones managed to build on yesterday’s rise. This morning its shares were up 5c, or 0.9% to $5.89. However, Harvey Norman, Billabong and JB Hi-Fi all backtracked, possibly on concerns about the increased likelihood of interest rate hikes in the near term and the effect it could have on consumers.
Recent data showing the economy was normalising has spurred speculation that the RBA would begin normalising its interest rate settings. The market is pricing in a 45 basis point increase in the cash rate by year-end, while at least one analyst is tipping 50 basis point increase as soon as November.
Backing this view, today the Aussie PMI found that manufacturing grew for the second consecutive month, with the index up 0.3 points to 52 points in September. This is the highest reading since December 2007.
Consumer Staples were off 0.3% with Woolworths losing 2c, or 0.1% to $29.23. A Merrill Lynch analyst said Woolworth’s foray into the hardware market could cost around $623 million over the next five years.
Wesfarmers fell 27c, or 1% to $26.22.
Energy shares outperformed the market, rising 0.7%.
NYMEX crude was up 5.7% in US trade overnight. The rise was fuelled by a larger than expected decline in crude inventories, which suggested strengthening demand. Like other US$ traded commodities, crude also benefited from the greenback’s weakness.
Woodside Petroleum was up 76c, or 1.5% to $52.89, while Santos added 12c, or 0.8% to $15.32. The latter was downgraded by UBS following a review of its commodity and FX forecasts.
Materials and Resources declined 0.5% even as base metals traded higher on the LME, with Nickel and Zinc outperforming, up 4.5% and 4.7% respectively.
BHP shed 42c, or 1.1% to $37.31. Yesterday, BHP said it had sent its inaugural uranium shipment from Olympic Dam to China.
Rio sank 62c, or 1% to $58.62, while iron ore specialist Fortescue shed 8c, or 2.1% to $3.74.
Yesterday, Fortescue said its deal with China Iron and Steel Association and Baosteel to supply iron ore at a 35% discount to the 2008 benchmark had fallen through.
Gold producers defied the trend after Gold futures rallied 1.5% overnight, settling above the key US$1000/oz psychological level. The spike closed out the precious metal’s best quarterly performance since early 2008.
Lihir added 9c to $2.89, while Newcrest Mining gained $1.05 to $32.95. Both were up around 3.3%.
Despite Tuesday night’s encouraging housing market figures, US housing leveraged construction materials makers, James Hardie and Boral continued to struggle. Boral is also significantly exposed to the NSW market, where yesterday’s building approvals data suggested a recovery.
James Hardie was off 3c to $7.83, while Boral fell 10c to $5.99.
Among Industrials, Leighton Holdings shares lost 49c, or 1.4% to $35.68 by lunch.
The stock backtracked even after Credit Suisse neutralised its view on the stock, noting that it was increasingly positive on Australian infrastructure markets and the company’s ability to grow its domestic work in had. In particular Credit Suisse cited impetus from government infrastructure spending and resource related infrastructure.
Also pressuring the sector, Brambles fell 20c, or 2.7% to $7.88.
However, their heavyweight industrial peers managed to advance, pegging the sector’s losses to 0.4%.
Qantas outperformed, trading 7c, or 2.4% higher at $2.93.
Around the region, the Nikkei 225 fell 142.9 to 9,990.4 and the Straits Times Index was off 13.9 to 2,658.6. Closer to home, the NZSE50 added 21.6 to 3,182.7.
Spot gold was trading at US$1006.38 per ounce, and the Aussie continued to strengthen against the US$, buying US$0.8832.
iCash and Metcash sign agreement
iCash Payment Systems and Metcash have signed an agreement enabling iCash to become part of Metcash Advantage. The ATM manufacturer and operator said the program provides Metcash customers with a comprehensive range of technology based products and services.
At lunch, iCash shares were trading at 6.6c, while Metcash shares were trading at $4.50.
Graincorp secures more trains
GrainCorp said it had secured three more trains to meet its logistics requirements across three locations in Queensland. The contract, with the Australian Railroad Group (“ARG”), a subsidiary transport and logistics company, QR was for three years the company said.
At noon, Graincorp shares fell by 18c to $8.85.
Campbell Bros to acquire PearlStreet for $87m
Campbell Brothers said it intends to launch a takeover offer for PearlStreet Limited (PST) of 56c per share, a 31.8% premium to the closing price Wednesday. The proposed offer values PearlStreet at $86.7 million.
At midday, Campbell Brothers shares were down 43c to $29.59, while PearlStreet shares were off by 4c to $42.5c.
Macquarie acquires FPK for US$130m
Macquarie Group announced it had entered into an agreement to acquire US based specialist investment bank Fox-Pitt Kelton Cochran Caronia Waller LLC (“FPK”). Macquarie said the transaction consideration consists of US$130 million in equity value, plus US$16.7 million of long-term liabilities, less cash on balance sheet at financial close.
Half way through the day, Macquarie shares were trading at $58.79.