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Some more on Paul Zahra's shock resignation: David Jones says a succession process has begun which will involve an extensive national and international search.
Zahra assumed the top job at department store David Jones in June 2010 when the former boss Mark McInnes was forced to resign over allegations of sexual harassment of a David Jones staff member.
David Jones chairman Peter Mason said Zahra would leave the retailer in a solid financial position.
However, the shock resignation of Zahra leaves the department store rudderless as it navigates through difficult trading conditions as well as in the middle of a massive restructure and new strategic plan designed and implemented by Zahra.
David Jones' statement came just as the share market was closing, with shares ending the day up 0.7 per cent at $2.85.
A mini-Wall Street is rising on the East End of Long Island, the Wall Street Journal writes:
The high-profile organic restaurant Babette's in East Hampton is celebrated both for its lentil vegetable walnut burgers and the parade of A-listers like Steven Spielberg, Alec Baldwin and Bill and Hillary Clinton who regularly troop in.
Less well known is that a handful of hedge funds, brokerages, investment advisers and private capital firms have quietly set up shop over the past decade directly above the local landmark at 66 Newtown Lane.
"They order takeaway," said Barbara Layton, the owner of Babette's. "If there's a multibillion-dollar deal going on upstairs, I honestly wouldn't know about it."
Wall Street firms are popping up on the East End of Long Island. In the years since the Sept. 11, 2001, terrorist attacks, there's been a flowering of dozens of homegrown financial boutiques as well as the arrival of several major hedge funds that have opened mini-satellite offices.
Here's how the sectors performed:
- Consumer discretionary: +0.7%
- Consumer staples: +1.1%
- Financials: +0.4%
- Gold miners: +0.6%
- Industrials: +0.6%
- Materials: +1.2%
The market has closed higher, with the benchmark S&P/ASX200 adding 30.3 points, or 0.6 per cent, to 5351.8. The broader All Ords gained 30.5 points, or 0.6 per cent, to 5351.5.
David Jones chief Paul Zahra will leave the department store for "personal reasons" once successor has been found.
ANZ's plan to become a "super-regional" bank has come under fire from JPMorgan's banking analyst, Scott Manning.
Despite the bank's regular trumpeting of its Asia ambitions, research from Manning argues the bank's returns have trailed those of its domestic-focused rivals since the Asia plan was unveiled in 2007.
"Returns have lagged across most key metrics including revenue growth despite above-peer exposure to the higher-growth Asian region," he writes.
What's more, he says ANZ has been pouring more and more capital into the region to achieve these below-peer returns.
In 2008 he says the bank's Asia-focused division made 17 per cent of group profits from 23 per cent of its capital base. Now, the division is estimated to be making just 14 per cent of profits from 27 per cent of its capital base.
Manning says this "disconnect" raises doubts over the bank's stated ambition to get between 25 and 30 per cent of its profits from its Asia-heavy division.
ANZ boss Mike Smith will have his chance to respond to the doubters when the company hands down its annual results on Tuesday next week.
There have been a number of broker calls for a target of 5600 on the ASX200 by end of the year. With the commencement of today’s trade on the Australian market, this aspiration moved closer, CMC's Michael Bogoevski notes:
- The positive economic trends leading up to the US political impasse helped keep investor confidence. Now, a combine of a solid Chinese GDP figure, a strong AUDUSD, the VIX back down to 13 and ASX200 clearing 5325, has given the macro trader the tick of approval to stay with the trend.
- Investors have earmarked tomorrow as the most important day of the week, given the scheduled release of the delayed September Non-Farm Payroll number and BHP’s Quarterly Production report.
- Today the market’s seen heavy positioning in BHP, DOW30, AUDUSD and the ASX200 Index, in anticipation of a positive surprise. Next week’s earnings release for ANZ and NAB will be next critical stepping stone for the long side traders.
Chinese iron ore futures are down more than 1 per cent as restocking by steel mills in the world's top consumer remained tepid on a sluggish demand outlook for the alloy in the fourth quarter.
Steel demand typically slows down in November and December as construction activities in China's northern regions are hampered by the cold temperatures, which limits steel mills' appetite for building inventories of the raw material.
The most active 62 percent grade iron ore futures for May settlement on the Dalian Commodity Exchange fell 1.5 per cent to a session low of 960 yuan ($US160) a tonne. It traded at 968 yuan by the midday break.
The new contract closed 1.8 per cent higher at 977 yuan on its debut on Friday. The contract price includes a 17 per cent value added tax and other costs. By comparison, the benchmark spot price for same grade iron ore stood unchanged at $US134.4 a tonne on Friday.
BHP Billiton has surrendered ten of eleven oil and gas exploration blocks it won in government auctions in India amid speculation the lack of permission to explore from India’s defence authorities forced its hand.
“BHP Billiton has exited all its ... blocks (other than the one with BG Group) because of delays in defence clearance,” the Mint newspaper quoted a person familiar with the development as saying.
BHP confirmed it has relinquished the acreage without giving any reason.
BHP held a 26 per cent stake in six blocks with local group GVK and 100 per cent interest in a further three blocks, which have all been surrendered.
The cost of insurance claims from the NSW fire disaster appears set to exceed $100 million, as hundreds of claims are lodged.
Victims of the fires had made 855 insurance claims worth $93 million by this afternoon, the Insurance Council of Australia said, and more claims were expected in the coming days.
Insurers have sent teams of staff to evacuation centres in the Blue Mountains to help victims, and ICA chief executive Rob Whelan said anyone affected by the fires should contact their insurer.
A spokesman for the state’s biggest insurer, NRMA, said it was too early to say how much the disaster would cost because some people had not yet managed to reach their homes.
Major bushfires in Australia over the last ten years had triggered insurance claims of $1.6 billion in total, figures compiled by Deutsche Bank show.
The ASX 200 has once again printed a higher high, and price action looks bullish and it continues to hone in on 5426 (the 61.8% retracement of the all-time high to GFC low), IG's Chris Weston says:
- A breakdown of the sub-sectors show trend breaks in the financial and consumer dictionary spaces, and volumes have been pretty solid today.
- Similar to the S&P 500, the actual index is over two standard deviations from its short-term average, and at some stage in the next session or two could mean revert and head to 5236; although given the current uptrend would present itself with a healthy buying opportunity.
- Again, actually prophesying what will actually cause the change in momentum is yet to be known. China is up 0.3%, despite the PBOC advisor (Song Guoqing) implying that the Q3 GDP print of 7.8% is pretty much the peak (he expects growth of 7.7% in Q4), and that if CPI stays above 3%, the PBOC may adopt a more neutral or restrictive policy setting.
- Still, given the high levels of retail participation in China’s equity market (thus making the Shanghai Composite or CSI 300 a really good guide to sentiment), you would expect this market to be lower.
This week's main economic data item is the third-quarter consumer price index, which is expected to show inflation rising just 0.8 per cent in the three months to September, for an annual rate of 1.8 per cent, or below the RBA's target band of 2-3 per cent.
This follows low June quarter CPI, of 0.4 per cent, and its annual rate of 2.4 per cent. The Australian Bureau of Statistics will release the inflation figures on Wednesday.
JPMorgan Australia chief economist Stephen Walters says a high exchange rate and below average economic growth is keeping inflation low despite higher petrol prices giving the headline CPI a bit of a boost:
- Fundamentally, there are few forces that would argue for a rapid acceleration in consumer prices.
- GDP (gross domestic product) growth has been tracking below trend for around a year, and this should continue well into 2014.
- Only a weaker currency will add any sort of inflation impulse, although it probably is too soon to see this in the data.
The good news for motorists is that the Aussie dollar is strong, keeping prices down at the petrol pump, CommSec chief economist Craig James notes:
- The Singapore gasoline price stands at 5-month lows in Australian dollar terms.
- Perhaps there is a good reason for it – but the gap between the average retail petrol price and the wholesale price is near 14 cents a litre, a near record high.
- It could be higher wages or rent or some other factor, but the upward trend in the margin is worth noting. As is always the case, motorists need to shop around for the best price.
- Filling up at $1.60 a litre rather than $1.40 a litre translates to an extra $12-15 to fill up the car with petrol.
The value of resources to the West Australian economy has dropped slightly, but is still worth more than $100 billion.
The latest figures from the state government reveals the value of WA’s mineral and petroleum industry in 2012/13 was $102 billion, the third consecutive year it’s been above $100 billion.
However, that valuation was down from last year’s $106 billion, with the fall blamed on the high level of the Australian dollar and a fall in the price of gold.
Iron ore remained the state’s highest value commodity, accounting for $56.4 billion of total mineral sales. In total, 513 million tonnes of iron ore were exported in 2012/13.
Gold was the second most valuable mineral sector, with total sales of just under $9 billion.
Mineral and petroleum exports comprised 89 per cent of the state’s total merchandise exports.
Australian telecommunications company AAPT has been put up for auction by its parent company Telecom New Zealand, reports The Australian Financial Review.
Goldman Sachs is understood to be managing the deal, which could be worth over $400 million. AAPT owns a significant fibre optic cable network that links various cities and commercial hubs throughout Australia.
“This includes 11,000km of interstate fibre, its own data centres in major capital cities, fibre access to 1,600 premises,” Telecom New Zealand said in its 2013 annual report. “AAPT has access to DSL coverage in over 400 exchanges focused on the major Australian cities and large metropolitan areas.”
But the business has also experienced a steady decline in earnings before interest, taxation, depreciation and amortisation. It reported EBITDA of $57 million in financial year 2013, which was 14.9 lower than the $47 million it reported the year before.
More signs of improving confidence among companies: the Australian Chamber of Commerce and Industry’s latest survey of investor confidence has found business owners at their most confident since December 2010.
‘‘We are continuing to see this improvement in expectations flying from a new government and a new administration with different economic agenda,’’ chamber chief economist Greg Evans said in Canberra. However, improvement in actual trading conditions was more modest.
Expectations for sales, profitability and the investment outlook all grew in the month but expectations for employment deteriorated.
The survey’s expectation index rose to 59.2 points in the September quarter from 55.7 points in the previous three months, while the actual conditions index crept up to 50.8 points from 49.9 points.
Even so, this was the first time the conditions index had risen above the key 50-point mark, which separates expansion from contraction, since March 2011.
Michael Pascoe asks whether Joe Hockey will Wayne Swan's example by raiding the Reserve Bank coffers for spare cash. All will be revealed on Thursday when the RBA releases its annual report:
It's likely to include a rather miserable operating profit thanks to low interest rates, but a fat bottom line thanks to foreign currency gains as the Australian dollar weakened. That bottom line could be tempting for a treasurer desperate to be seen to be making some sort of impact on the deficit. When Swan was in that position last year, he ripped a $500 million dividend out of the RBA, overruling the governor's desires to retain all the profit to rebuild the RBA's depleted reserve fund.
Investors will be happy with the local bourse's rise to five-year highs, but those who have put a bit of money into banks will be cheering the loudest, or keeping their success all to themselves.
The financials sectors has surged 25.7 per cent in 2013, outperformed the benchmark S&P/ASX200 which is up 15.2 per cent in the same period. Local banks are generally pushing multi-year highs, or even all-time records.
ANZ has pushed up 28.5 per cent in 2013 to hit a record high of $32.20. Westpac is near a record high, having gained 31.9 per cent this year, to be at $34.23. CBA, Australia's biggest bank, is just fifty cents shy of its record high of $75.00, hit earlier this year and has added 19.8 per cent in the year-to-date.
Rounding out the big banks, NAB is at five-year highs, jumping a healthy 45.6 per cent in 2013 to $36.38. Bank of Queensland and Macquarie are both at multi-year highs, with rises of 62.5 per cent and 42.8 per cent respectively.
While the underperformer, and we use this term lightly, has been Bendigo Bank, which is well short of its 2013 high and quite a way from its record high, but is still 24.9 per cent higher for the year.
It's not only Australia where property prices are booming, but also in the Old Dart, with fears of a property bubble in London.
Leading property website Rightmove says London house prices have soared to a new high this month, beating their previous record by nearly STG30,000 ($A50,479) and fuelling fears that the capital is overheating.
According to the website, asking prices in London saw an ‘‘unsustainable’’ 10 per cent month-on-month increase in October, pushing typical asking prices in the capital to STG544,232, leapfrogging a previous high set in July by more than STG28,000.
The website put much of the increase down to a ‘‘frenzy’’ of activity in parts of prime inner London as overseas investors look for a safe haven to place their cash, which is ‘‘leaving the shelves bare’’.
Formerly secret Cayman Islands documents reveal that Sydney businessman Vanda Gould, who was charged last week with serious tax and money laundering offences, controls two companies in the Caribbean tax haven, writes Ben Butler.
The documents are evidence in a civil case in which overseas companies allegedly associated with Mr Gould and his co-accused, John Leaver and Peter Borgas, are attempting to claw back tax bills totalling about $40 million.
In the Federal Court case, the Tax Office alleges the offshore network brought $19.45 million back into Australia, much of which went to Mr Gould and Mr Leaver.
Charter Hall Retail REIT has boosted its portfolio after paying $60 million for the Southgate Plaza Shopping Centre in Morphett Vale, South Australia.
The deal comes as the landlord settled the long-running divestment of assets in Poland. The vendor was the super fund, ISPT, through the Australian head of retail investments at Jones Lang LaSalle, Simon Rooney.
Mr Rooney said there had been a substantial upswing underway in the sub-regional retail sector.
“While the market is highly liquid at present, investors are still very discerning and focused on the core quality centres with strong growth potential,’’ Mr Rooney said.’’
‘‘Centres that meet these criteria are being very aggressively pursued and competitively sold. The growing pool of investors targeting this asset class is providing some vendors with the confidence to progress with sales.’’
Charter Hall Retail REIT’s units are trading up 4¢ to $3.96.
If anyone’s having a field day it has to be Charlie Aitken. ‘‘Goldilocks meets Santa,’’ is how the uber-bull is describing the current market conditions, who says he’s struggling to find a speed bump ahead. Here are some of the factors he says are fuelling his optimism:
Central Banks: taps turned fully on
Global economic data: improving
Commodity Prices: rebounding
Equity earnings: upgrade cycle
M&A: picking up
Buybacks/special dividends: picking up
Shorts: more pain ahead
IPO’s: stag profits increasing
AGM Season: benign
Sydney’s weekend auction clearance rate fell below 80 per cent for the first time in two months as high listing numbers continue to test the market.
Although the 79.9 per cent rate reported was just under, it nonetheless impacts on a record-breaking sequence of 13 of the past 15 weeks with rates above 80 per cent.
Japan’s trade deficit in September has surged 64.1 per cent from a year earlier, extending its string of shortfalls to a record 15th consecutive month.
A weaker yen has been helping Japan’s export picture, but the volume of shipments was down last month while the country’s energy bill remained high because of the imports of pricey fossil fuels. Energy imports surged after the 2011 Fukushima crisis forced the shutdown of Japan’s nuclear reactors.
Meanwhile, Tokyo stocks are continuing to rally as investors await long-delayed US jobs data to be released this week. The Nikkei 225 index is up 1 per cent in morning trade.
Fast food and fitness firms are generating a higher number of complaints from franchisees and will be audited, the competition regulator says.
ACCC deputy chair Michael Schaper told a weekend national franchise convention on the Gold Coast it would target industries that generated a disproportionate number of complaints.
''In the ACCC's next round of audits we will be looking at franchises from the takeaway food and health and fitness industries, however our audits will not be restricted to these two sectors,'' he said.
During the last financial year, the ACCC received 740 complaints from people involved in franchising, with more than 100 of them related to misleading conduct and false representations about potential earnings.
''There can be severe financial penalties for franchisors found to be misrepresenting potential franchise earnings,'' Mr Schaper said.
With the ASX200 pushing five-year highs, the real question is how far have we really come?
Since local shares were last at this level, the market dropped to a low of 3145.5 in early 2009. Since then the ASX200 has added 70.5 per cent.
This year, despite some hiccups along the way, the Australian bourse has pushed 15.3 per cent higher, but we still have a ways to go before testing record highs like Wall Street.
FKP Property Group has continued with its restructure into a pure-play local retirement owner and operator with the sale of a stake in a New Zealand business.
FKP is the fund manager of Retirement Villages Group (RVG), and said one of its subsidiaries, the Retirement Villages New Zealand Limited (RVNZ), had appointed Goldman Sachs to sell the fund's 37.7 per cent equity interest in New Zealand retirement village owner and operator, Metlifecare Ltd.
Goldman Sachs was appointed ahead of the expiry of the escrow period for the 79.4 million shares on November 23 this year.
This sale comes as Stockland is embarking on the sale of its direct holding in FKP, which now stands at 11.6 per cent. Concurrently FKP is undertaking a share buy back.
Michael West shines a light on the deal that was such a success that it became an embarrassment.
During the financial crisis in 2008, a couple of Macquarie bankers devised a tax-driven trade that fared so well that it virtually wiped out the profit of the bank's Australian business, and a large chunk of franking credits with it.
But in Hong Kong the deal was a monumental winner, delivering a profit in the order of $850 million, according to former executives au fait with the transaction.
Last-minute resumes sent to Mario Draghi for the European Central Bank's new financial supervisor job are unlikely to feature many men.
Ten months after Yves Mersch joined the ECB's board in the wake of an outcry that its top management would become an all-male club, the next senior appointment needs to be a woman, said four euro-zone central bank officials. The leading candidate is Daniele Nouy of the Bank of France, they said on condition of anonymity because the hiring process is ongoing.
''It's almost a certainty that if a very good woman is put forward, all else being equal, the parliament will choose her,'' said Sharon Bowles, chairwoman of the parliament's Economic and Monetary Affairs Committee, who led protests over Mersch's appointment last year and expects to scrutinize the ECB's selection. ''There are several in France, so we're not short, and there are some in other countries.''
Here's a nice chart courtesy of Deutsche Bank that shows just how bullish global equity investors have been this year, and that the temporary US shutdown didn't do much to dent their optimism.
The ASX200 isn't in the list but the corresponding numbers are: 15.4 per cent rise since the beginning of the year, and a 3.05 per cent gain since October 1, with most of that over the past five sessions.
Bullish ... stocks have been top this year, while gold was sold off.
Here's how the sectors have opened:
- Consumer staples: +1.2%
- Consumer discretionary: +0.6%
- Energy: +0.6%
- Financials: +0.9%
- Health: -0.1%
- Materials: +1%
- Gold +0.6%
Onwards and upwards, it seems, according to one of the best of the local fund managers.
Platinum Capital told shareholders at today's annual general meeting of the following upbeat assessment received from its fund managers:
"The markets have been unusually resilient to bad news. The appetite for risk has been evident in blue sky areas like e-commerce and biotech, and in recent weeks this hunger for open-ended opportunities has been met with a growing queue of placements and listings. It would be no surprise for the markets to have some retracement, but the general improving economic tone and still massive printing of money suggests that a retreat in prices should be used as a buying opportunity."
The market is really in rally mode now that the US debt default scare is out of the way, rising for a fifth consecutive day in a streak that has seen the ASX200 gain about 3 per cent. And investors reckon there may be more gains to come:
‘‘The market will continue to rally based on improving economic fundamentals and a potential delay in tapering of the Federal Reserve’s stimulus,’’ says Angus Gluskie, managing director at White Funds Management. ‘‘While the US government still needs to do more work on the debt issue and their budget, we’re going into 2014 with the likelihood of synchronised recovery in Europe, Asia and the US.’’
Senior executives from Canada’s Saputo, one of three known suitors for Warrnambool Cheese & Butter, have postponed flights to Australia as they consider their options in the wake of Murray Goulburn’s surprise $420 million counterbid on Friday for Australia’s oldest dairy company, the AFR is reporting.
Lino Saputo jnr had planned to fly into the country today for a series of meetings with Warrnambool suppliers and shareholders, but sources told the paper the visit had been postponed, possibly as Montreal-based Saputo, Canada’s largest dairy processor, considers raising its $393 million offer for Warrnambool.
Bega Cheese is already considering raising its bid as it attempts to stay in the hunt for Australia’s fourth-largest milk processor.
Bega shareholders will meet tomorrow, when they are expected to lift a cap to its cash-and-scrip bid, valued at $372 million on Friday. That offer was $48 million less than Murray Goulburn’s bid, which trumped Saputo’s offer.
WCB shares are up another 4.8 per cent at $8.27, or well above the bids that have come in so far, as investors bet on sweetened offers.
The Australian dollar continues to hold strong, currently trading at 96.71 US cents after reaching a four-month high of 96.78 earlier in the session.
FXCM currency strategist, Ilya Spivak, is bullish on the dollar but warns this week will test the local currency’s resilience amid some top-tier US economic data.
According to Spivak, the Aussie is still significantly sensitive to broad-based risk appetite trends and vulnerable to the outbreak of risk-aversion produced by two weeks’-worth of data delayed by the government shutdown, with the spotlight to be on September’s delayed employment report due on Tuesday night.
BK Asset Management New York managing director Boris Schlossberg says the release of robust Chinese growth figures last Friday is behind the surge.
‘‘The Aussie dollar initially sold off slightly on the Chinese numbers, but eventually recovered to trade back to day’s highs as currency traders saw few red flags in the data.’’
Mr Schlossberg said the Australian dollar is also strengthening because of increasing expectations that the Reserve Bank of Australia is coming to the end of its interest rate cutting cycle.
‘‘RBA governor Glenn Stevens said that he ‘personally’ thought that a lower Australian dollar would be helpful to rebalance the economy,’’ Mr Schlossberg said.
‘‘The emphasis on personal rather official policy indicates that, at least for now, the RBA is willing to tolerate the pair above the 95.00 US cents.’’
The ASX is up, up and away - hitting a new five-year high in early trade this morning.
The benchmark S&P/ASX200 hit a peak of 5363.0 this morning, its highest mark since June 2008.
Australia's unemployment rate is set to rise to around six per cent by early 2014, according to research into the state of the jobs market.
According to the Clarius Skills Indicator, which tracks the availability of skilled labour, there was oversupply of 134,000 jobseekers in September, meaning there were more people seeking jobs than positions to be filled.
The indicator found the oversupply of workers extended to most industries, including the engineering sector which has been hit by a slowdown in mining investment.
Clarius chief executive Kym Quick said the research indicated unemployment was set to continue to rise over the next few months, hitting a peak of around six per cent in March next year.
The unemployment rate was 5.6 per cent in September, according to figures from the Australian Bureau of Statistics.
The market has opened higher, with the benchmark S&P/ASX200 adding 30.7 points, or 0.6 per cent, to 5352.2. The broader All Ords is up 38.8 points, or 0.6 per cent, to 5351.8.
Spending fell for the first time in 13 months in September, but consumer confidence is expected to pick up in following months, according to the latest Commonwealth Bank’s Business Sales Indicator.
Economywide spending was down 1.4 per cent in September, after a 2.5 per cent rise in August.
CommSec chief economist Craig James said the fall in spending coincided with a boost in housing data.
‘‘Perhaps Aussie consumers were too busy at home auctions or sprucing their homes up for sale, but the evidence suggests that fewer people were at shopping malls or generally spending their money,’’ he said.
‘‘But with the election out of the road, the US budget and debt issues solved for now, consumer confidence lifting and with key sharemarket indexes at record highs, economywide spending should lift in coming months."
Mr James said the Reserve Bank of Australia would be watching economic data from the non-mining parts of the economy particularly closely.
‘‘If spending doesn’t lift, and at the same time if inflation is contained and the Aussie dollar lifts, then the Reserve Bank will be tempted to cut rates,’’ he said.
‘‘Much will depend on the housing market. If demand for homes remains strong then the Reserve Bank will be reluctant to cut rates again.’’
JP Morgan, America’s biggest bank, has reached a $US13 billion ($13.4 billion) deal with US regulators to settle claims that it mis-sold bundles of toxic mortgage debt to investors in the build up to the financial crisis
The settlement, which has yet to be made official, is part of a broader investigation by the US authorities into the industry’s mortgage activities in the years before the crisis of 2008. Banks are alleged to have lied about the quality of the sub-prime mortgage securities sold to investors at the time.
The JP Morgan settlement – the largest ever by a US company with the government – is expected to resolve civil claims against the bank, but will leave it open to criminal charges.
CMC market analysts Ric Spooner has a look at the day ahead on the ASX:
Another push higher by US markets on Friday, should see a positive tone for early trading in the Australian market this morning.
The question before investors now is whether the current rally will simply see pre US debt ceiling price earnings values being recovered or whether the confidence of recent days will be a spring board to another leg into significant new ground in this bull market.
Technical analysis suggests that markets may have reached an inflection point that could provide some short term answers for this question. While the Australian 200 index broke narrowly into post 2008 highs last week, it's sitting just below a relatively flat trend line drawn across the May and September peaks. The US S&P 500 index arrived at a similar level on Friday. In this case, the trend line can be drawn across the August and September peaks.
A clear break above these trend lines could signal that investors are about to push price earnings multiples higher as they contemplate ongoing low interest rates and what looks like a period of plainer sailing from a risk point of view.
However, if profit taking sets in here and the resistance zone around these trend lines is respected, we may be in for a period of range bound trading as investors signal reluctance to push price earnings much beyond current levels. The unbroken rally since 9 October means support levels are well below current levels with the 50-day moving average around 5192 being the closest significant level.
Former Leighton Holdings chief Wal King has spoken out for the first time since allegations surfaced that he approved the bribing of Iraqi officials.
Speaking for the first time since Fairfax Media revealed allegations that he approved the bribing of Iraqi officials, Mr King challenged his successor as CEO, David Stewart, on why, having claimed to have been told of the bribe, Mr Stewart never alerted the board.
"In my whole period at Leighton I absolutely and completely refused to be involved in anything tainted by corruption," Mr King said.
Wal King. Photo: Nic Walker
Nine Entertainment shareholders will be given initial details of its planned float, as marketing of year's largest sharemarket float moves into full swing.
There is speculation is up to $1 billion will be raised when it floats in December. Existing shareholders are likely to be given a price range for the float in a week.
The Australian market looks set to open higher following strong gains on Wall Street that took the S&P 500 to a new all-time high and gave the Nasdaq a 1.3 per cent gain.
What you need2know:
- SPI futures up 22 points to 5,343.
- AUD fetching 96.71 US cents (it hit a four-month high earlier of 96.82 in the session), 94.63 yen, 70.67 euro cents, 59.79 pence
- On Wall Street, S&P500 +0.7%, Dow Jones +0.2%
- In Europe, Eurostoxx +0.8%, FTSE100 +0.7%, CAC +1.1%, DAX +0.6%
- Spot gold falls 0.3% to $US1316.25 an ounce
- Brent oil rises 0.8% to $US109.94 per barrel
- Iron ore at $US134.40 per tonne