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Markets Live: Bracing for the budget

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Local stocks are clawing back early losses, but still down after a late sell-off on Wall Street, while the dollar slipped on the RBA's monetary policy statement.

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That's it for this week - thanks everyone for reading this blog and posting comments!

Here's our evening wrap.

Westpac chief executive Gail Kelly has sold $6.9 million worth of her bank's shares, a document lodged with the ASX today shows.

Kelly's family trust sold 200,000 shares at an average price of $34.479 on Wednesday, two days after the bank reported a $3.77 billion half-year profit.

It is understood the share sale was for tax reasons.

Despite its size, the sale makes a relatively small dent in Kelly's Westpac share investments. Including direct and indirect holdings, her portfolio is worth $78.8 million, based on Friday's closing price.

The sharemarket has closed slightly lower, after clawing back some of its early losses.

The benchmark S&P/ASX200 index slipped 16 points, or 0.3 per cent, to 5460.8, while the broader All Ords lost 13.8 points, or 0.3 per cent, to 5442.1.

Among the sectors, materials lost 0.7 per cent, financials fell 0.4 per cent and consumer discretionary lost 0.5 per cent.

For the week, the ASX200 posted a minimal gain of 0.05 per cent.

Sri Lanka will not oppose the casino planned for a $400 million mixed-use resort being developed by James Packer's Crown Resorts if it is operated using an existing license held by a local partner, a top government official has said.

The government's latest stance on casinos is contrary to what it said on April 25 when Packer's Crown project was approved by the country's parliament. At that time the government said no casino would be allowed in the resort.

Opponents of casinos believe they will lead to a boom in prostitution and damage religious values and culture in the mainly Buddhist island nation.

But the gambling industry has been operating there in one form or another since at least the 1980s when many five-star hotels had their own in-house casinos featuring free drinks and food as well as floorshows in addition to the blackjack and baccarat tables.

Government spokesman Keheliya Rambukwella said casinos will be restricted to D.R. Wijewardena Mawatha, the area where Crown has planned the hotel and anybody can operate casinos in that area if they have a licence held by a local partner.

RBA governor Glenn Stevens isn’t the only central banker worried about a strong currency.

For European Central Bank president, Mario Draghi, the strength of the euro – which is hovering close to multi-year highs against the US dollar – is a serious concern, writes the AFR's Phil Baker:

It’s such a concern, the ECB is likely to become the first major central bank to cut to below zero the rate of interest it pays on any deposits it has.

That acts like a tax for banks who have money on deposit with the ECB, and the aim is they don’t have it sitting there.

It’s rare to have negative interest rates, although the German two-year bond a few years ago fell below zero for a short period.

On cue, the initial reaction was to sell the euro, but it probably won’t last.

At best it might cap the recent run the euro has had against the greenback, but hopes for a major depreciation against its major trading partners are misplaced, probably because other central banks, Japan and the US, are still involved in quantitative easing.

The ECB is worried about the risk of deflation and has copped some criticism for not acting sooner, but it looks like they are going to move when they meet next in June.

Read more ($)

The $100 million pub float AG&E has been sunk with institutional investors shying from the asking price for the stock.

Sources told Fairfax Media that CIMB and Wilson HTM went back to AG&E to renegotiate the $1 IPO price but were forced to pull the float when the parties failed to agree.

The institutional book build was expected to conclude Thursday with the prospectus for retail investors expected to be lodged with ASIC on Friday.

The five pubs that were to be acquired from the $80 million raised in the IPO are now on the market.

The hotels are the Croydon Park Hotel, the Canley Heights Hotel, the Beverly Hills Hotel, the Wentworthville Hotel, and the Wiley Park Hotel.

An Australian Bureau of Statistics staffer and a NAB employee have been arrested on insider trading and corruption charges over allegations they made $7 million by trading on market sensitive information on the Australian dollar.

The AFP said the 26 year old ABS man gave his 24-year old friend at NAB market sensitive information before it was released publicly by the ABS. They say his friend then took the information to trade on the foreign exchange derivatives market.

The sensitive information relates to labour force, retail and trade figures.

The AFP said proceeds of crime were found in residential property, funds in bank accounts and a motor vehicle.

It said the employee at NAB did not utilise any funds from NAB and did not utilise any systems from NAB.

Fairfax Media has reiterated its support for a relaxation in Australia's media ownership laws, as it reported a 4 per cent decline in group revenues for the first four months of calendar 2014.

Chief financial officer David Housego said a tough April - due to the extended Easter/Anzac Day holiday period - had led to an increased fall in revenue fall to 4 per cent, year on year.

Metro Media was down 7 per cent, Housego told the Macquarie Australia conference in Sydney, while revenue for real estate classified business Domain was up 22 per cent.

He said the Australian Community Media division was down 10 per cent, New Zealand rose 6 per cent, and radio was down 4 per cent year on year.

Housego added that Fairfax Media, which publishes this website, still expects to deliver costs below $1.6 billion this financial year.

Fairfax shares are still up 2 per cent at $1 flat.

New research has revealed a link between the weather pattern known as El Nino and asset prices just as Australia is on the cusp of another El Nino event.

Nomura’s London-based analysts have found that El Nino is usually broadly positive for commodity prices, negative for the US dollar against developed-market peers; and has only a negligible impact on global growth because of the often competing forces it stirs due to geographical and economic diversity.

Nomura said El Nino tended to have a singular impact – drought – in Australia and south-east Asia. But its effect in Brazil and the US was more wide-ranging, depending on those countries’ regional climates, causing drought in northern Brazil and increased rain in southern Brazil, for example.

Wet seasons brought about by the change in weather may hit the Brazilian coffee industry based in the south, leading to increased output and lower prices. On the flipside, drought-stricken California will probably benefit from the predicted increase in rainfall. In Peru, the fisheries industry suffers because of the change in sea temperatures, but agricultural output swells.

Complicating existing beliefs around El Nino’s impact on markets was the fact that it could be simultaneously positive and negative, the analysts said. The 1997-98 El Nino had a $US25 billion impact on the US economy, $US20 billion of which was positive.

Importantly, commodity prices tend to rise during El Nino periods, they found.

Unsurprisingly, milder winters during El Nino events tend to reduce demand for energy consumption, pushing down energy prices.

In the metals industry, El Nino wields its influence on prices through supply chain disruption. Heavy rain in Chile will reduce access to its mountainous mining region, where large copper deposits lie.

<p>

Regional sharemarkets are mixed, as the tense situation in Ukraine keeps investors on edge, though a tame inflation report from China calmed some nerves.

  • Japan (Nikkei): +0.5%
  • Hong Kong: flat
  • Shanghai: -0.3%
  • Taiwan: -0.3%
  • Korea: +0.1%
  • ASX200: -0.2%
  • Singapore: +0.1%
  • New Zealand: -0.3%
<p>

Billionaire James Packer and Channel Nine boss David Gyngell have been issued with criminal infringement notices following their now-infamous punch-up on a Bondi Beach street.

The pair were captured by a photographer sparring outside Packer's beachside mansion last Sunday morning following escalating tensions between the long-time friends.

Police launched an investigation two days later following concerns raised directly with police and in the media, acting Assistant Commissioner Mark Walton said.

About 300 images and footage taken by paparazzo Brendan Beirne were handed over to police and witnesses provided statements. Neither Packer nor Gyngell made a formal complaint.

If uncontested the pair will be fined $500 each - which a spokesman for Gyngell said he would pay without contesting the charge

Here's more

Alcoa is providing a $10 million support package for Victorian and NSW regions affected by the closure of three aluminium producing facilities and the loss of about 1000 jobs.

The company says the package would stimulate new jobs in these areas and fund training programs for affected workers.

Alcoa announced in February that it will close its Point Henry smelter and rolling mill in Geelong, and its Yennora rolling mill and recycling facility in NSW.

New research has revealed a link between the weather pattern known as El Nino and asset prices just as Australia is on the cusp of another El Nino event.

Nomura's London-based analysts have found that El Nino is usually broadly positive for commodity prices, negative for the United States dollar against developed-market peers; and has only a negligible impact on global growth because of the often competing forces it stirs due to geographical and economic diversity.

The Bureau of Meteorology this week forecast that Australia was on course for its first El Nino in more than four years with a 70 per cent probability based on evidence of warmer than usual sub-sea temperatures. Nomura said El Nino tends to have a singular impact (drought) in Australia and South-east Asia, but its effect in Brazil and the United States is more wide-ranging depending on those countries' regional climates, causing drought in Northern Brazil and increased rain in Southern Brazil for example.

Read more

Yahoo has struck gold with Chinese e-commerce giant Alibaba, which filed for a Wall Street IPO earlier this week, the NYT's Dealbook writes:

In 2005, local competitors were outmaneuvering Yahoo’s China website. So Yahoo’s top executives that year announced it would cede control of its Chinese-language website to Alibaba.

As part of that deal, Yahoo agreed to invest $US1 billion in what had become the Alibaba Group in exchange for a 40 per cent stake in the company.

That investment now looks like a brilliant stroke. Soon after the two sides signed the deal, Yahoo began to falter in the American market, while its Alibaba investment took flight with the explosive growth of the Chinese company’s e-commerce platforms, Taobao and Tmall.

Yahoo’s stake in Alibaba is now worth about $US35 billion, even after it sold a chunk of its shares two years ago for $US7 billion.

This year is fast becoming an ‘‘annus horribilis’’ for stockpickers, according to Goldman Sachs.

The investment bank says in a note to investors that portfolio positioning rather than economic fundamentals is driving financial markets.

‘‘Despite good macro data and stable markets the vast majority of mutual funds are underperforming benchmarks while many hedge funds are down year to date,’’ Goldman Sachs analyst David Kostin says.

He cites the release of US job figures last week as the latest example where the market had shrugged off economic fundamentals:

  • The [US] government reported the strongest non-farm payrolls report in several years, 288,000 new jobs created in April, well above the consensus expectation of 218,000.
  • Under normal circumstances risk assets such as stocks should rally on evidence of economic acceleration. However asset prices did not budge.


Kostin says US stocks remain expensive, as the S&P 500 is trading at 15.8 times Goldman’s 12-month forward earnings forecast, while the median stock has a price/earnings multiple of 17 times.

‘‘Most of our metrics suggest the US stock market trades at the high end of a fair value range. Our 12-month target of 1950 represents a potential return of just 4 per cent.’’

He says for most portfolio manager, 2014 is ‘‘turning into an annus horribilis’’, the phrase Queen Elizabeth II used to describe 1992, the year in which two of her children split from their spouses, Princess Diana’s tell-all book was published, and one of her homes, Windsor Castle, caught fire.

Singapore Airlines is jumping on the premium economy express, following the likes of Qantas or Cathay Pacific.

Chief executive Goh Choon Phong says the airline will launch the service in the second half of 2015, following customer requests for the additional class which tends to offer passengers more legroom and perks compared to economy but is cheaper than business class.

He was speaking to the media and analysts after the airline reported a widening in its fourth quarter operating loss after the market close on Thursday.

Prima BioMed shares are soaring after US regulators granted fast-track status to the cancer drug developer's CVac clinical development program.

"This program is intended to improve overall survival in patients with relapsed platinum-sensitive epithelial ovarian cancer who enter a second complete remission," the company said in a statement. "Prima will work closely with the FDA in accelerating its development program for CVac to potentially bring this treatment option to patients in the US."

Shares are up 33 per cent at 4.8 cents, on solid volumes of 65.7 million.

Time for a midday change of pace with this video ahead of Tuesday's budget nasties.

Budget time: a sweet time for some, much angst and bitterness for others. Rocco Fazzari and Denis Carnahan get us in tune for Tony and Joe's big night.

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Sweet Budget Time 2014

Budget time: a sweet time for some, much angst and bitterness for others. Rocco Fazzari and Denis Carnahan get us in tune for Tony and Joe's big night.

PT2M3S http://www.canberratimes.com.au/action/externalEmbeddedPlayer?id=d-37ysp 620 349

The dollar briefly dipped to the day's low of 93.48 US cents after the monetary policy statement and the Chinese inflation numbers, but has since recovered back to 93.60 US cents.

China’s consumer inflation decelerated to the slowest pace since October 2012 and the decline in factory-gate prices persisted.

The consumer price index rose just 1.8 per cent in April from a year earlier, according to official data. Economists were expecting a 2.1 per cent rise.

The producer price index fell 2 per cent from a year earlier, the 26th straight drop and the longest stretch of declines since a 31-month slide that started in 1997.

Premier Li Keqiang in March set an inflation target of 3.5 per cent for 2014, the same goal as in 2013.

‘‘We believe it is time for the PBOC to contemplate easing monetary policy further,’’ ANZ China economist Liu Li-Gang says. The risk of deflation has risen, and cutting banks’ reserve-requirement ratio can help ‘‘meaningfully lower the lending rates facing Chinese enterprises".

The RBA’s statement on Monetary Policy unsurprisingly repeats that the RBA expects stable interest rates for some time: “the Board’s view is that the current accommodative monetary policy setting is likely to be appropriate for some time yet”. Here are some other key points, courtesy of ANZ:

  • The tone of the statement continues to reflect the large but competing forces acting on the economy: on the negative side significant headwinds are seen from the large decline in mining investment and tighter fiscal policy, while on the positive side a significant pick-up in dwelling investment is in prospect and household consumption and business conditions have also strengthened.
  • The Bank concludes that aggregate demand could be weaker or stronger than expected over the next couple of years depending on the balance of two key forces: the decline in mining investment and the pick-up in activity in the non-mining economy.
  • The RBA’s comments on unemployment suggest no significant improvement in the next year or so. With an expectation that growth will be below trend for the next year or so, the Bank does not expect the unemployment rate to begin to decline in a sustained fashion until after that, and then only slowly (quite a dovish view for rates if it turns out to be the case, given the importance of unemployment trends in driving monetary policy historically. If realised this could delay the beginning of rate hikes until later in 2015 as the market has recently been moving to price).
  • In terms of the forecasts, as expected the RBA revised down its underlying inflation forecasts around one quarter of a point in the near term. The lower inflation numbers largely reflect base effects from the low Q1 CPI outcome and the higher AUD assumption. On growth, the Bank slightly upgraded the near term outlook (reflecting stronger dwelling investment and consumption expectations) but has slightly downgraded the further out ranges due to the higher AUD assumption.
  • The Bank still expects the AUD to decline over time noting that “with resource prices and therefore the terms of trade expected to decline further, historical relationships suggest that the exchange rate could move lower over time.
The RBA's latest projections for growth and inflation.

The RBA's latest projections for growth and inflation.

The Reserve Bank has flagged a continuation of low interest rates for some time as the economy continues to adjust to the fall-off in mining investment amid an uncertain outlook.

The central bank revised its growth forecast for June 2014 to 3 per cent from 2.75 per cent. It also lowered its inflation outlook for June from 3 per cent to 2.75 per cent, after a softer-than-expected reading of first-quarter CPI.

"Since last August, when the cash rate reached its current low level of 2.5 per cent, evidence of the effects of the substantial degree of stimulus already imparted has continued to accumulate," the RBA said in its quarterly Statement of Monetary Policy, which was published on Friday.

"At the same time, the economy continues to face some significant headwinds, with the large decline in resources sector capital spending getting underway and fiscal consolidation in prospect."

The Australian dollar, which had been easing early Friday, slipped slightly on the back of the release of the SOMP. The local unit briefly slipped below US93.50¢ but retraced some of its losses and was buying US93.56¢ just before mid-day.

James Packer's bruising week is on a brighter note with the billionaire facing a big pay day thanks to Apple.

The US computing giant is in talks to acquire rapper Dr Dre's music subscription service Beats Music for $US3.2 billion which includes Mr Packer as an investor.

In March Packer and two other backers have reportedly topped up their initial $US60 million ($66 million) investment last year with up to another $US100 million.

Packer has also scored big wins on the Hollywood front with his movie producing venture RatPac.

Its joint venture with Warner Bros helped fund the critically acclaimed hit Gravity, as well as The Lego Movie, which notched up the second-biggest February opening weekend in the US with a $US77.2 million ($86 million) gross.

 

Fears that the economy may be facing a jobs vacuum next year have got some investment experts questioning whether Australia will be able to fill the growth gap left by the mining boom in the coming years.

Housing, retail spending and tourism are often touted as sectors likely to help fill the national income gap as they’re already benefiting from a surge in growth helped by record low interest rates and a weaker Australian dollar compared to a year ago.

But some experts say growth in these sectors may not be sustainable longer term, which could make the transition in growth harder to achieve.

“I think there is a real danger that next year we could see unemployment going up,” said Tyndall Investment Management’s head of fixed income Roger Bridges, adding that record low interest rates are needed to keep the momentum in spending and housing going.

Baillieu Holst quant strategist Mathan Somasundaram expects a “tidal wave” of unemployment to hit in the next two years, as more jobs are lost because of an ever-shrinking mining industry and substantial cuts across the car and airline industries, as well as the telco sector, manufacturing and government departments.

“The rising cost of living pressures in mortgage, food, energy, education and health are to hit home,” Somasundaram told social media news service Livewire, adding that he also expects “substantial job cuts in Canberra, and property prices in that area to pullback in a one to two year time frame.”

The comments come after the release of better than expected jobs data on Thursday. The official unemployment rate held steady in April at 5.8 per cent, with companies and employers adding 14,200 jobs – almost twice as many as forecast – from March, according to the Australian Bureau of Statistics.

“I am actually a little bit surprised that the ANZ job ads and other indicators showing that the labour market is looking quite good. I think it may start turning in the next six months, I think that is the risk, rather than it just keeps on powering along,” said Bridges.

Here's a quick preview on the RBA's Statement of Monetary Policy, which will be out at 11.30am.

What's been interesting is to see some surprise in the recent economic data - namely a softer-than-expected inflation print, as well as further signs that the jobs market could be on the mend. At the same time, the Australian dollar has remained resilient and is still one of the best-performing G10 currencies against the US dollar this year.

As such, the RBA will have quite a few issues to touch on in its quarterly report:

Inflation

Economists say they expect the central bank to revise downwards its inflation forecasts after the first-quarter CPI figures came on within the RBA's target band. The RBA has already noted in its board meeting statement on Tuesday that subdued wages growth in feeding into the inflation numbers and keeping it in check.

The current RBA forecasts (from the February SOMP) for headline inflation are 3.25 per cent for year-ended June 2014, 2.25 to 3.25 per cent for the year-ended December 2014 and June 2015.

Housing

The RBA has kept its rhetoric on the housing market fairly similar over the past few months, warning households about asset price rises and noting that the boom would feed through into construction and other sectors.

Labour market

The RBA and its governor Glenn Stevens previously said that they expected the unemployment rate to peak in late 2014 or early 2015. Yet the data released on Thursday for April was better-than-expected and maintain the 5.8 per cent jobless rate from March. The RBA already signalled that it was slightly more optimistic about the labour market in its Tuesday board statement.

"We expect [the RBA] will characterise the recent data as likely to be overstating the underlying improvement in the labour market, just as the earlier data had perhaps overstated the weakness," ANZ economists Felicity Emmett and Riki Polygenis write in a note.

"Any change to the discussion around the RBA’s trajectory for the unemployment rate would be particularly important."

Australian dollar

Will the RBA start its jawboning on the local unit again now that inflation is not standing in the way? Economists are mostly saying no, so it's not likely (though possible) that the central bank will say too much about the exchange rate beyond its recent comments that it is at historically high levels.

Envestra shares have surged after a last-minute $2.37 billion bid by a Hong Kong conglomerate led by Asia’s richest man triggered the prospect of a bidding war with local gas pipeline major APA Group.

The approach by Cheung Kong Group, which is offering $1.32 per share in cash, came just days before shareholders in the gas distributor were due to vote on APA’s $2.1 billion scrip-based offer.

The approach means Envestra’s two largest shareholders are now vying for majority control of the company, which owns about 23,000 kilometres of gas distribution networks serving over 1.2 million customers, mostly in South Australia and Victoria. Cheung Kong is run by Li Ka-shing, whose net worth is estimated at about $US31 billion and is considered one of the most powerful figures in Asia.

Envestra shares have jumped as much 21 per cent to $1.365 as investors bet on APA upping its offer. They are currently up 18.8 per cent. APA shares have slid 2.3 per cent to $6.68.

APA’s scheme of arrangement to take full ownership of Envestra, which valued the target at about $2.1 billion, appeared doomed to failure because of resistance by Cheung Kong, whose two representatives on the board had recommended shareholders vote against the deal. The Hong Kong company’s 17.6 per cent stake in Envestra was large enough to be able to block the APA takeover.

The local sharemarket has opened lower, taking its lead from a late sell-off on Wall Street and choosing to ignore the rally on European markets in the wake of the ECB signalling more easing.

The benchmark S&P/ASX200 has fallen 25.1 points, or 0.5 per cent, to 5451.7, while the broader All Ords has lost 22.4 points, or 0.4 per cent, to 5433.5.

Among the sectors, materials are down 0.7 per cent, financials have lost 0.6 per cent, while energy stocks are flat.

There is no doubt global markets are starting to position themselves for a shift away from high growth into defensive plays, IG's Evan Lucas notes:

  • The breakdown in high price momentum stocks like Tesla, Amazon, Twitter, E*TRADE coupled with the falls seen in LinkedIn and Yahoo in the last eight weeks are signs that the US is looking to safe-guard profits and that a new thematic of trade is brewing – the return of capital.
  • This is an interesting dilemma for Australian investors in Australian stocks; the return of capital trade has been the trade for last three years. The development of this in the US suggests that the carry trade from the US and Japan is likely to continue to support the dividend players, despite the fact they are on the limiter on yield metrics.
  • If the RBA does flick the switch on rates over the coming months, this trade is likely to fade as Australian bonds look very attractive and an increased yield will pull yield hunters out of equities; foreign investors are also not entitled to franking credits, which is a double hit and  an area to watch.

JB Hi-fi plans to launch an on-market share buyback totalling 1.4 per cent of the company or $27 million.

The electronics retailer said the buyback would offset the dilutionary effect of new shares issued in the 2014 financial year from employees exercising share options.

The company plans to complete the buyback no later that May 26 this year. It said it would only acquire shares at ‘‘such times or circumstances as it considers beneficial to the efficient capital management of the company’’.

‘‘The buyback is therefore dependent upon market conditions, volumes and other relevant factors,’’ the company said in a statement to the ASX.

 

"One of the fluctuations [in market conditions] is the ability to do stupid things.": Oaktree chairman Howard Marks.

"One of the fluctuations [in market conditions] is the ability to do stupid things.": Oaktree chairman Howard Marks. Photo: Glen McCurtayne

Howard Marks, the founder of Oaktree Capital, has warned investors about a market correction as indiscriminate investors chase higher returns in riskier investments.

Marks, one of the most widely followed investors in the world, made his name from investing in distressed-debt.

He said the current environment, where corporate debt spreads at reached historic low yields, was a red-flag.

“There’s a lot of risk in the world today and the risk comes from the behaviour of participants,” he said at a New York Society of Security Analysis conference commemorating investment writer Ben Graham’s 120th birthday. “One of the fluctuations [in market conditions] is the ability to do stupid things.

“When the market crashes bad companies cant issue debt. That’s a hallmark of a crisis. When the market came back, after the crisis, only the best companies could issue but today anyone can issue debt,” sad Marks.

Marks founded Oaktree Capital, which manages $US83 billion of investments including a stake in Nine Entertainment.

He said that policymakers had done a great job to encourage risk taking in the market, by lowering interest rates but it had consequences.

“It forced people up the risk curve. It was beneficial to the economy but there is so much reaching for yield that the world has become hospitable for risk, and that’s something we should keep in mind.”

Marks however said conditions weren’t at the point to justify sitting on the sidelines.

“I don’t think the outlook is so bad that we should refuse to buy but we should be cautious."

Read more

Rupert Murdoch’s News Corp has reported a 5 per cent decline in revenue to $2.08 billion for the third quarter, due largely to currency fluctuations and falling advertising sales in its news and information business.

The company's net profit plunged to $48 million from $323 million in the previous corresponding period, which was boosted by a non-taxable gain on a transaction.

News, which publishes The Daily Telegraph and The Australian newspapers, as well as owning half of pay television service Foxtel, posted earnings before interest, tax, depreciation and amortisation of $175 million, up by 4 per cent.

“The past quarter marked another robust stride in the direction of expanding our digital and international businesses, which was the goal we articulated on our investor day last year,” News chief executive Robert Thomson said.

The company also appointed William Lewis as chief executive of Dow Jones, after he was given the role on an interim basis in January.

ECB chief Mario Draghi has primed investors for action next month.

With the threat of deflation still stalking euro-area economies that are barely out of recession, the European Central Bank president all but committed himself to providing further stimulus at June’s monetary policy meeting.

After keeping rates at record lows overnight, Draghi told reporters that the 24-member Governing Council is “comfortable with acting next time”. He underscored that position with comments showing a heightened concern that a rising euro will depress prices and derail the recovery.

“I don’t see how Draghi can escape some kind of action after this pre-commitment,” said Frederik Ducrozet, an economist at Credit Agricole in Paris. “He might surprise us with the type of action he takes; not with the timing any more.”

Draghi’s remarks sent the euro and money-market rates plunging, but boosted European stocks, as investors bet the ECB will deliver on its long- standing pledge to act if needed. The comments were reminiscent of his predecessor, Jean-Claude Trichet, who typically signalled rate increases, though not reductions, a month in advance using the phrase “strong vigilance”.

“One might suggest that there is an ostensible drift back to the old days of Trichet-style communication,” said Marc Ostwald, strategist at Monument Securities in London. “It is now nigh on impossible for the ECB not to act in June.”

While Draghi gave no sign that the radical option of quantitative easing is imminent, the path of the euro and new economic forecasts next month may provide the rationale for the unprecedented step of negative interest rates.

In a corner ... ECB president Mario Draghi has to act after his pre-commitment, analysts say.

In a corner ... ECB president Mario Draghi has to act after his pre-commitment, analysts say. Photo: Bloomberg

Local stocks are expected to open flat, after a tech rally faded on Wall Street, while European markets soared after the ECB signalled action next month.

What you need2know:

  • SPI futures up 1 point 1t 5460
  • AUD at 93.68 US cents, 95.22 Japanese yen, 67.71 Euro cents and 55.34 British pence.
  • On Wall St, S&P500 -0.1%, Dow Jones +0.2%, Nasdaq -0.4%
  • In Europe, Euro Stoxx 50 +1.4%, FTSE100 +0.6%, CAC +1.4%, DAX +0.9%
  • Spot gold slipped 0.1 per cent to $US1288.62 an ounce
  • LME copper fell 1% to $US6655 a tonne
  • Brent oil dropped 0.1% to $US107.99 per barrel
  • Iron ore fell 1.3 per cent to $US103.70

What’s on today

Reserve Bank's quarterly statement on monetary policy

News Corp third quarter results
Alumina annual general meeting

Stocks to watch

Goodman Fielder: Wilmar International and First Pacific have said they will walk away from their $1.27 billion takeover offer if Goodman Fielder proceeds with a plan to sell its New Zealand dairy business.

Envestra: Hong Kong’s Cheung Kong Infrastructure has emerged as a last-minute counter-bidder to APA Group for Envestra, just days before shareholders were due to vote on APA’s $2.1 billion scrip takeover offer.

Baosteel and Aurizon’s $1.42 billion lunge for Aquila Resources may be rejected within the week, fuelling hopes the Chinese-led consortium will return with a higher offer, The Australian Financial Review reports.

Here's more

Good morning and welcome to the Markets Live blog for Friday.

Your editor today is Jens Meyer.

This blog is not intended as investment advice.

BusinessDay with wires.

Quotes Search

Sort comments by:
  • eTrade showing incorrect closing price for ANZ on portfolio view. Just another annoying little eTrade bug that doesn't take into account that ANZ went ex-div today. Embarrassing.

    Commenter
    Gareth
    Location
    Sydney
    Date and time
    May 09, 2014, 4:29PM
  • My most annoying stock of the year = Mermaid Marine

    Make up your mind MRM :/

    Commenter
    GS
    Location
    Date and time
    May 09, 2014, 4:10PM
  • If we all hold our breath the market might actually finish +ve today, which is normal for a Friday.

    Commenter
    mitch of ACT
    Location
    Date and time
    May 09, 2014, 3:51PM
  • FMG:

    Goldman Sachs says sell.
    Citi says buy.

    Who do you follow? Go long or short?

    My view is Citi does not take into account the risk of rising interest rates. Talk of hiking rates in the US is on the cards, and if that were to occur, Australia would have no choice but to follow.

    Consequently, FMG's huge debt of $9 billion will see rising finance costs eating into cash flow, complete with falling Iron Ore prices, battling against Vale's rising output by 50% over the next four years, and Vale's selling price at around $15 per tonne will jeopardise Fortescue as over-supply will rule trade.

    I'm going with Goldman Sachs, wilth great caution! GG.

    Commenter
    Gordon Gekko
    Location
    Greg Coffey World
    Date and time
    May 09, 2014, 3:15PM
    • Errata:

      "Vale's selling price at around $15 per tonne"

      Should read "Vale's selling price at around $15 per tonne LOWER than market price..."

      Commenter
      Gordon Gekko
      Location
      Greg Coffey World
      Date and time
      May 09, 2014, 3:29PM
    • I truly doubt that rising rates in the US will happen anytime soon. Yes, there are some signs of a US recovery but low short-term rates will be with us for years to come. Bond guru Bill Gross from PIMCO has written several good articles on this at http://www.pimco.com.

      Commenter
      James_F
      Location
      Melbourne
      Date and time
      May 09, 2014, 3:40PM
    • I don't own FMG and don't have a view on it. But I query your rationale for avoiding it.

      You say rates might rise in the US and that might flow on to local rates, pushing up FMG's interest bills.

      But actually, all of FMGs debt is $US denominated so local rates are irrelevant. In fact the only exposure FMG has to local rates relates to some cash on deposit so local rates going up would actually increase its profits.

      More importantly, virtually all of FMGs debt is at fixed rates, with no significant maturities in the next few years.

      So on a scale of 1 to 10 about things that will impact on FMG, I would say interest rates barely rate a 1.

      Commenter
      pass the red
      Location
      Date and time
      May 09, 2014, 3:56PM
    • Recently Chinese buyers also talk down Australian Iron Ore price on purpose. Plus, credit squeeze on certain Chinese iron ore importers does not help. Short term view iron ore price is struggle to stay above USD100.. Hence, do not agree with Citi view. However will buy FMG whenever its share price dip more than 4-5 % in one go for short term trade.

      Commenter
      Up and Down is Norm
      Location
      Date and time
      May 09, 2014, 3:56PM
    • GG

      Fair analysis but FMG seem to be to have done and are doing all the right things. $2bln in U/S notes fully repaid of late.

      I hope luck and timing stays with them long enough to reduce debt while iron ore stays at reasonable price level.

      I consider their financial management to be the best I have seen for a miner.

      All my opinion no shares held.....YET.

      Commenter
      Harry Rogers
      Location
      Date and time
      May 09, 2014, 4:03PM
  • If you think foreign buyers have been pushing up the price of Australian property, check out this story from London. An unfinished apartment in London has been sold to a buyer from Russia or the Ukraine for $A280 million. Now there's an asset worth seizing if sanctions against Russia are broadened. http://money.cnn.com/2014/05/07/news/economy/london-property-real-estate/index.html

    Commenter
    mitch of ACT
    Location
    Date and time
    May 09, 2014, 3:14PM
    • its ok Mitch us Brits can follow Putin's lead and annex Sloane square and Belgravia just as he has done the Crimea! .. they can keep Chelsea football club though!

      Commenter
      greeny
      Location
      sydney
      Date and time
      May 09, 2014, 3:41PM
  • When it rains a lot some mines have to shut down until the weather clears however some crops need lots of rain so some farmers do well. If there is a drought a lot of farmers do poorly. When there is a cyclone business often stops until it passes. If there are fires lots of bush gets burnt and not good for forestry industry.

    Now can I be paid for this breathtaking analysis that weather affects stock prices.

    Commenter
    Harry Rogers
    Location
    Date and time
    May 09, 2014, 3:13PM
    • Thanks Harry but I'm onto it. I've made a killing swapping my portfolio back and forth from Ugg boots to thongs on a 6 monthly basis, and do the reverse on OS markets. In the early days, I wasn't aware that 'thongs' meant something different overseas and I invested in the wrong companies, but then the Internet came along and those shares soared as well. Recently, due to global warming, I have found myself having to hold my thong / flip flop portfolio longer than my Ugg boot portfolio, but I did completely miss the recent Ugg boot trend amongst American college girls. I need to get on top of American college girls...

      Commenter
      Gareth
      Location
      Sydney
      Date and time
      May 09, 2014, 3:40PM
    • "do realise that politicians can have all of the good advice..."

      I presume that "good advice" is a matter of opinion. No care and definitely no responsibility taken but only rewarded.

      If only the blind could see?

      Commenter
      Harry Rogers
      Location
      Date and time
      May 09, 2014, 4:00PM
    • Yes Gareth I went short the US thongs and lost a lot.

      Commenter
      Harry Rogers
      Location
      Date and time
      May 09, 2014, 4:07PM
    • Best day for a long time thanks to a large holding in ENV. Always prefer cash in a takeover. But this one will be a long time coming to fruition. The big question: will APA better the deal. The price being offered shows how much we are being overcharged for energy.

      Commenter
      mitch of ACT
      Location
      Date and time
      May 09, 2014, 4:26PM
    • @Harry no public servant or outside expert wants to be seen as a "berk" by their colleagues for giving a gov't bad advice. So all care is taken. But you can't stop a politician ignoring that advice.

      Commenter
      mitch of ACT
      Location
      Date and time
      May 09, 2014, 4:29PM
    • "do realise that..........."

      Wrong post to this comment sorry.

      Commenter
      Harry Rogers
      Location
      Date and time
      May 09, 2014, 4:48PM
  • Breaking story about a Melbourne man obtaining unreleased info from someone in the ABS to make foreign exchange transactions. Both are being charged by the AFP. Big profits made, assets being seized and further action underway.

    Commenter
    mitch of ACT
    Location
    Date and time
    May 09, 2014, 2:55PM
  • Fairfax readers are voting with their feet, need to get back to some rational political commentary. The soapbox type fiasco we had in the past 6 years of Government is over, praise the lord!

    Commenter
    Captor
    Location
    Date and time
    May 09, 2014, 2:50PM
    • Unfortunately for Fairfax, they tend to attract the intelligent, rational and knowledgeable reader who likely uses a number of sources to get a fully informed view.

      In contract, Murdoch papers attract people who like pretty pictures and who think aliens built the pyramids.......!

      Commenter
      Life Is Good
      Location
      The Real World
      Date and time
      May 09, 2014, 3:34PM
    • yes i have noticed that here on the blog lol

      Commenter
      Captor
      Location
      Date and time
      May 09, 2014, 3:56PM
  • I find it paradoxical that some people make a living by giving the governments advice on economic policy both past and present then blame the politicians for either not implementing their advice or misunderstanding their advice.

    Is it possible that we can hold these public servant "advisors" to account by penalising their pensions for the mess they have imposed on the citizenry,or as expected they leave on large pensions and appointments to RBA or the like of the big banks.

    Hypocrisy writ large!

    Commenter
    Harry Rogers
    Location
    Date and time
    May 09, 2014, 1:57PM
    • @Harry, you do realise that politicians can have all of the good advice in the world then go ahead with their cockamamie ideas anyway. We are going to see examples of that in the coming Budget. Howard & Costello were warned of the revenue consequences to future govt's if income from super funds was exempt from tax for the retired over 60's. But no, they wanted the votes. Abbott is being warned about PPL, but no, it's his baby and it will be done. I know of many, many more examples.

      Commenter
      mitch of ACT
      Location
      Date and time
      May 09, 2014, 3:36PM
    • "do realise that politicians can have all of the good advice..."
      I presume that "good advice" is a matter of opinion. No care and definitely no responsibility taken but only rewarded.
      If only the blind could see?

      Commenter
      Harry Rogers
      Location
      Date and time
      May 09, 2014, 4:47PM
  • That 45 day rule on shares for franking credits is downright evil. A few days ago SGN was trading at $1.50. Today it's fallen below $1.30 on large volumes. In the absence of other factors I can only put that down to 45 day rule trading as it went ex-div on 23/3. It would have been more beneficial to sell at $1.50 and forfeit the 2.3c franking credit if held for 45 days or less.

    Commenter
    mitch of ACT
    Location
    Date and time
    May 09, 2014, 1:54PM
    • $1.27 :O

      Was a stock I held before going to mostly cash a couple of weeks ago. Tempted to buy at these levels but don't really want to add any more stocks until the next financial year.

      This is why I trade so much, I hate profits being ripped away from me.

      Commenter
      GS
      Location
      Date and time
      May 09, 2014, 3:52PM
  • Hey, ASX is doing the opposite of what is so often the norm! It started DOWN and has drifted UP all day.

    Commenter
    Gumly
    Location
    Mackay
    Date and time
    May 09, 2014, 1:46PM
    • I think your on to something Gumly Holmes .. ha! ha!

      Commenter
      greeny
      Location
      Sydney
      Date and time
      May 09, 2014, 3:08PM
  • The ATO to cut 3500 staff due to the Budget. Tax dodgers get an open door as the gov't needs to raise more revenue. That will also mean a longer wait for tax refunds.

    Commenter
    mitch of ACT
    Location
    Date and time
    May 09, 2014, 1:43PM
    • They wouldn't be firing them if there was a net loss in revenue - so they must cost more than they collect (assuming rational politicians).

      Commenter
      FANATICAL
      Location
      Titanfall
      Date and time
      May 09, 2014, 2:11PM
    • Yawn

      Commenter
      Kane
      Location
      Date and time
      May 09, 2014, 2:38PM
    • Actually mitch, i am guessing it will be the need for many australians to not complete tax returns in future as they only have basic return itmes they just acknowledge the ATO calculation rather than filling in a tax return.

      Commenter
      Wwwish Lion
      Location
      Melbourne
      Date and time
      May 09, 2014, 2:41PM
    • @WWWish, yes, auto-complete tax returns are part of it. However the level of tax debt outstanding is enormous and only actively chasing up tax debtors will bring that cash in. Then have you tried to phone someone in the ATO lately to enquire about something. I can listen to recorded music for hours on my speakerphone while on hold after hold.

      Commenter
      mitch of ACT
      Location
      Date and time
      May 09, 2014, 3:40PM
    • Nope...never needed to call the ATO dont see any reason too ever.

      Commenter
      Wwwish Lion`
      Location
      Melbourne
      Date and time
      May 09, 2014, 4:01PM
    • When the ATO is taking it's own sweet time to issue over $50k in refunds for several super funds you give them a call to hurry them up. Those delays will get worse as staff are cut. But the ATO does pay interest on delayed refunds, at your expense.

      Commenter
      mitch of ACT
      Location
      Date and time
      May 09, 2014, 4:17PM
  • Apart from the Nasdaq, if this is a "annus horribilis’’ for stockpickers, imagine when the market is on a downtrend.

    Commenter
    GS
    Location
    Date and time
    May 09, 2014, 1:25PM
  • Yahoo's market cap is only 35 billion.....its entire value is Alibaba shares?

    Commenter
    Wwwish Lion
    Location
    Moes Bar - its Friday
    Date and time
    May 09, 2014, 1:21PM
    • Surely a BUY, right?

      Commenter
      AlignIT
      Location
      Rowville
      Date and time
      May 09, 2014, 3:39PM
  • How many times is the ASX200 gonna take a run at the 40 lvl. Surely it'll have to break and hold at some time?

    Commenter
    j.
    Location
    syd.
    Date and time
    May 09, 2014, 1:21PM
  • Comment at 12.39 on PPR says that volume traded is 65 million. Commsec only shows 46 million. Does Commsec show entire market, or only shares traded through Commsec? Which brings me to another question - does Commsec only trade amongst it's own members, or are shares offered to entire market?

    Commenter
    confused
    Location
    Date and time
    May 09, 2014, 1:04PM
    • *PRR, not PPR

      Commenter
      confused
      Location
      Date and time
      May 09, 2014, 1:47PM
    • As no one has answered your question no currently Commsec has PRR at 54,875,902 shares traded at 3.29pm but Iress shows the whole market 80,677,422 shares traded also at 3.29 pm. If you trade regularly better to use Iress which is available via their platform
      Cheers

      Commenter
      Optimist
      Location
      Hi Confused
      Date and time
      May 09, 2014, 3:35PM
    • etrade show 81million @336pm

      Commenter
      BearshapedBull
      Location
      FDA drinks Lounge
      Date and time
      May 09, 2014, 3:37PM
  • Re Getting Angry's observation about NAB becoming or unbecoming a 5% shareholder in BKN many times over a few weeks.

    Most of the time it is pretty easily explained with no need for conspiracy theories.

    Many super funds or small institutions or HNWIs don't show their holding in their own name. They are registered in the name of National Nominees or JP Morgan Nominees or UBS Nominees etc. Or if you have shares mortgaged to a bank it holds a "registered interest" that the law requires be taken into account in working out whether they have 5%.

    I have a modest holding in BKN that is registered under National Nominees. They have nothing to do with it other than being the registered owner.

    What appears to be a 5% holding by NAB probably just means that their custodial division (National Nominees) "holds" roughly 5% in aggregate when the holdings of hundreds of smaller parties are added up. If one of those real owners buys or sells on a given day it can push the total "NAB" holding over or under 5% and you get the flurry of substantial shareholder notices that have happened recently.

    Just occasionally it might be the institution doing it's own trading but nine times out of ten it means nothing.

    Commenter
    pass the red
    Location
    Date and time
    May 09, 2014, 1:02PM
    • But you can surely see it happens to the most shorted stocks most of the time? I do not see this +-5% substantial holder on any of the good performers.

      In my experience watching all these stocks that get this pattern in the announcements, they are being heavily shorted and most are getting hammered down.

      What you say may well be correct, but people in the industry all gang up on particular stocks and may all use the same holding company. I'd love to see this pattern on a stock that is going UP!

      Commenter
      GS
      Location
      Date and time
      May 09, 2014, 1:15PM
    • Exactly.

      And the ASX requires holders to report when they go above/below 5% ownership of any stock, so if you swing between 4.9% and 5.1% you will report frequently.

      Commenter
      Life Is Good
      Location
      The Real World
      Date and time
      May 09, 2014, 1:20PM
    • An old boys club co-ordinated short attack from various multiple entities, was what I was getting at.

      Commenter
      GS
      Location
      Date and time
      May 09, 2014, 1:22PM
    • The voice of reason. You are on the wrong blog. We prefer to think it's all a conspiracy and that the evil big end is winning at our expense.

      Commenter
      confused
      Location
      Date and time
      May 09, 2014, 1:28PM
    • lol I'm not some crackpot screaming conspiracies here. Seeing this pattern has saved me heaps of cash over the last 2 years. I'd hate to see where I'd be if I stayed in any of these +-+-+-+5% dog stocks.

      Plenty of others here have noticed it and discussed before. I'm happy to wear the looney label though... saved my butt dozens of times now! :)

      Commenter
      GS
      Location
      Date and time
      May 09, 2014, 1:38PM
    • @ GS, I don't think you're a looney. When stocks are being heavily shorted like BKN there is an extra level of changes in "registered interests" associated with the lending and reborrowing of stock. So high shorting levels are logically more likely to cause an aggregated holder like National Nominees to change its registered interest level even more frequently than it otherwise would.

      All I'm saying is that it is not "NAB" itself making these calls. It is the collective decisions of dozens if not hundreds of parties, and all that is unusual here is that National Nominees just happens to have around the 5% mark so changes get reported. If it only held 4% then the same activity would be happening every day but it wouldn't be reported.

      The volume of outstanding shorts is a key piece of info, but the lodgement of daily changes in NAB's aggregate custodianship doesn't really add any information that is relevant. To me anyway.

      Commenter
      pass the red
      Location
      Date and time
      May 09, 2014, 2:13PM
    • Don't worry GS. There are so many crackpot looney conspiracy theorists on this blog that you all blend into one.....

      PS My "Exactly" above was for ptr.

      Commenter
      Life Is Good
      Location
      The Real World
      Date and time
      May 09, 2014, 3:29PM
    • I hear ya about 4 or 5%+... I actually like seeing them go 5%+ because it alerts me to what is coming. It may sound weird to some but I've literally seen this so many times last year.

      This year it's saved me from a 55-70% loss in ACR. Was trading it quite a few times from the $3 mark and noticed it kept making lower and lower levels (usually going lower by 20c or so) whilst constantly seeing -+5% UBS holdings.

      I used it to day trade it successful and avoid the big falls on those really big days. After seeing UBS do it waaaay too many times, I did one final trade, collected my div in FEB and got out. Three months later, it's down 55% and I've saved my skin yet again.

      And that is just one example. Last year was crazy though with the amount of times I saw it.

      Your explanation makes sense, but I can't ignore this pattern either. Well, hope others may find this info useful anyway! :)

      Commenter
      GS
      Location
      Date and time
      May 09, 2014, 3:43PM
    • @ptr i'll gather the evidence for a later date...call the ambulance i think i've lost my mind!!

      Commenter
      BearshapedBull
      Location
      FDA drinks Lounge
      Date and time
      May 09, 2014, 3:48PM
    • @ pass the red - you're exactly right about nominee / custodian companies appearing on substantial shareholder lists. I've explained how this works a couple of times on this blog but gave up after a while. I work for such a firm and we hold north of $20B in ASX listed securities for about 60K individual accounts. I can guarantee that no prop trading is being done on these holdings for 'the bank' it's just an administrative arrangement.

      Commenter
      TP
      Location
      Date and time
      May 09, 2014, 4:03PM
    • I hear you TP, and understand your frustration if you've explained that a few times before.

      Commenter
      pass the red
      Location
      Date and time
      May 09, 2014, 5:09PM
  • PRT up to $1.04. yippeee!! You still holding BSB?

    Commenter
    confused
    Location
    Date and time
    May 09, 2014, 1:01PM
    • See what you've done. Some shares are very sensitive. You only have to breathe their name and down they go.

      Commenter
      mitch of ACT
      Location
      Date and time
      May 09, 2014, 2:02PM
    • not i ...think GS?
      i'm media shy

      Commenter
      BearshapedBull
      Location
      FDA drinks Lounge
      Date and time
      May 09, 2014, 3:36PM
    • LOL. Wouldn't be the first time I have killed a share by paying it attention...

      Commenter
      confused
      Location
      Date and time
      May 09, 2014, 3:53PM
    • Yep one of mine BSB... haha Mitch we've joked about this one before. Every time I mention it on here, it gets knocked down. I banned myself from commenting on it (except for now lol)

      Commenter
      GS
      Location
      Date and time
      May 09, 2014, 3:56PM
  • mitch and his detractors really make my day. Tnx

    Commenter
    augustus
    Location
    drummoyne
    Date and time
    May 09, 2014, 12:20PM
  • torch paper lit on PRR
    FDA fast track
    now share price fasttrack
    up up....here we come 9c yippee

    Commenter
    BearshapedBull
    Location
    FDA drinks lounge
    Date and time
    May 09, 2014, 12:17PM
    • Hmmmm, I wonder... Up 33.3% now, was up 47% earler today. Might be all the run it gets for now. Will keep watching.

      Commenter
      confused
      Location
      Date and time
      May 09, 2014, 12:59PM
  • Looks like the RBA comments are working. Market turn around...

    Commenter
    DR
    Location
    syd
    Date and time
    May 09, 2014, 12:14PM
  • Can any law experts answer this? Is it possible for a rich guy (Packer?) to sue a government for breach of electoral promise? BOTH parties the same so I will not reveal my political persuasion.

    Commenter
    Gumly
    Location
    Mackay
    Date and time
    May 09, 2014, 12:12PM
    • I would love to see a class action. There would be no shortage of participants. 2m at $1 each to fund it.

      Commenter
      mitch of ACT
      Location
      Date and time
      May 09, 2014, 12:20PM
    • Gumly, not really. To sue someone there needs to be a breach of contract, and I can't see a contract. And even if there was, there would be an implied term that promises/commitments are only relevant while conditions remain exactly as they were. In a complex modern economy there are new developments every five minutes so it's the easiest thing in the world for any government to say that we intended to honour our promises but then new information came to hand.

      Commenter
      pass the red
      Location
      Date and time
      May 09, 2014, 12:34PM
    • rich guy don't need to sue, he's gunna get what he wants

      Commenter
      mushy
      Location
      bushed
      Date and time
      May 09, 2014, 12:48PM
    • Thanks 'Pass the Red'. Can we sue pollies for being idiots then?

      Commenter
      Gumly
      Location
      Mackay
      Date and time
      May 09, 2014, 1:20PM
    • There is a contract - a verbal contract and it is as valid as a written one if both parties accept it and the intentions of the contract.

      Abbott said, vote for my party and I will not introduce ANY new taxes.

      Well that does constitute a contract if one half of the deal honours it and he doesn't it is a breach.

      Commenter
      Joe the POM
      Location
      Geelong
      Date and time
      May 09, 2014, 2:05PM
    • The answer to your question is 'no'. That'll be five grand please. Ding ding.

      Commenter
      Green Sheep
      Location
      not from there
      Date and time
      May 09, 2014, 3:17PM
  • Remember when WBC was over $16 a share during the GFC and paid a 72c dividend? Gift.

    Commenter
    DR
    Location
    syd
    Date and time
    May 09, 2014, 12:11PM
  • "The Reserve Bank of Australia has upgraded its growth forecasts.....central bank issued improved outlooks for household consumption due to rising wealth..."
    IMO ,with this ridiculous cuts looming this is more a wish than a reality ...

    Commenter
    Romaniac
    Location
    Date and time
    May 09, 2014, 12:03PM
  • The trouble with the upcoming budget is that people are selling off because of the expected bad news therein, but then will sell off AGAIN when the bad news is delivered. And will sell off ONCE MORE when the financial gooses deliver their verdicts of gloom.

    Commenter
    Gumly
    Location
    Mackay
    Date and time
    May 09, 2014, 11:52AM
    • Well if you think share prices end up too low then buy some. Simple. Markets acting irrationally is the BEST thing for investors.

      Commenter
      pass the red
      Location
      Date and time
      May 09, 2014, 1:07PM
  • MGX. SP jump today based on Investor Presentation. Given the Fe price I think it will slip back. For a company with market cap of $800m "$497m cash, increased by $121m since 30 June 2013" is quite solid. I'll be buying if SP goes below $0.70.

    Commenter
    Yin or yang
    Location
    Date and time
    May 09, 2014, 11:49AM
    • im still avg @84c so looooong
      dont talk it down...please.

      Commenter
      BearshapedBull
      Location
      FDA drinks lounge
      Date and time
      May 09, 2014, 12:29PM
    • @BSB You needn't worry about my SP predictions.
      ;

      Commenter
      YIn or yang
      Location
      Date and time
      May 09, 2014, 1:12PM
  • Why do people say banks are overpriced when their yields are all higher than even the highest of borrowing rates (if one has to borrow)? Didn't they pay good dividends during the financial crisis? What is the risk?

    Commenter
    Gumly
    Location
    Mackay
    Date and time
    May 09, 2014, 11:41AM
    • Yesterday's report about declining lending margins at the Big 4 banks is cause for concern, regardless of the direction of the economy, particularly as each of the Big 4 have boosted their profit performance by reducing their provisions for bad and doubtful debts. If the economy picks up, as some are predicting, then interest rates will rise and households with huge mortgages will have trouble servicing those loans as their incomes reduces by virtue of extra taxes/levies, charges and co-payments and bad debts will rise. If the economy contracts, as seems more likely with a contractionary Budget about to be handed down for this year and probably next year as well, interest rates won't be the problem as they will likely stay flat or even fall. Rising unemployment and reduced incomes will put households under stress and bad debts will rise. So this year's easy profit boost for the banks will be next year's drag on profits. In the first scenario increased profits from lending into a growing economy may offset the rise in bad debts but there is no saviour if the second and more likely scenario eventuates. I found this table useful: http://www.abc.net.au/news/2014-05-08/nab-half-year-results-show-cash-profit-of-32-billion/5438206?section=business

      Commenter
      mitch of ACT
      Location
      Date and time
      May 09, 2014, 12:12PM
    • It is only those who have no bank stocks who say this
      Analysts say anz has a value of 39
      Mitch is right to a certain extent
      Farmers in particular are in the mire, borrowing too much in this harsh land, a land where rainfall is so uncertain There are 100,s of foreclosures and you know what, nobody is blaming banks, it is greed, borrow to the hilt, then reap what you sow

      Commenter
      STU
      Location
      Date and time
      May 09, 2014, 2:58PM
    • @Stu, if farmers could reap what they sow they wouldn't be going bust. I expect that the coming El Nino and associated droughts is going to make the farmers' lot a hard one yet again. So they will be asking for assistance. I know, let's follow the example of the car industry. Hockey will tell our farmers to get lost because there are no more handouts and we will buy all of our food from o/seas.

      Commenter
      mitch of ACT
      Location
      Date and time
      May 09, 2014, 3:46PM
  • Why does anyone bother to publish futures? They are NEVER correct. Even if they say up 40 we MIGHT scrape out a 10 point gain. If they say, 20 down, we will go down 50!

    Commenter
    Gumly
    Location
    Mackay
    Date and time
    May 09, 2014, 11:39AM
    • All that proves is that futures traders don't have crystal balls to predict the future with.

      Commenter
      TP
      Location
      Date and time
      May 09, 2014, 12:00PM
    • The SPI is at best really only an idea of might happen when the market OPENS, not how it will track during the day. SPI trading ceases a couple of hours before the ASX opens so anything that happens in terms of market moving news in the interim will not be reflected in that number. It is just one indicator you should be looking at when trying to figure out what the market may, or may not, do later on.

      Commenter
      JJ
      Location
      NSW
      Date and time
      May 09, 2014, 12:02PM
    • That's because futures are a hedging instrument. They are not a predictor of where the markets will move, it's a measure where investors THINK it will head.

      Commenter
      Caculator
      Location
      Date and time
      May 09, 2014, 12:06PM
  • Abbott is (re-) introducing a carbon tax by increasing tax on fuel. Is he still going to abolish the old carbon tax?

    Commenter
    Viking
    Location
    Sydney
    Date and time
    May 09, 2014, 11:34AM
  • Mitch of ACT.
    I am sick and tired reading of your biased labor BS.

    Commenter
    Heinrich
    Location
    Bunbury
    Date and time
    May 09, 2014, 11:28AM
    • Then don't read it. My id is there for all to see. I'm busy pointing out the flaws with current economic policy and much of what I have said is being echoed by other posters and the posts to the left-hand panel. I used to develop and implement economic policy for gov'ts of both colours so I can see the dangers in what is happening now. I'm reducing my share holdings. Are you.

      Commenter
      mitch of ACT
      Location
      Date and time
      May 09, 2014, 11:58AM
    • Has seen the world only through a needle hole!!

      Commenter
      AlignIT
      Location
      Rowville
      Date and time
      May 09, 2014, 12:16PM
    • Another option is don't write. Most of it is wrong anyway.

      Commenter
      ALittleToTheRight
      Location
      Date and time
      May 09, 2014, 12:34PM
    • @AlignIt, no worked in the private sector as well. It's always useful to know and anticipate what the likely response to policy can be. The "response effect" can overwhelm a policy, eg take-up of solar, or encourage wide-scale avoidance, eg tax-law.
      @Alittle, just because you disagree with what I say doesn't mean it is wrong.

      Commenter
      mitch of ACT
      Location
      Date and time
      May 09, 2014, 12:55PM
    • And just because you post it, doesn't mean it's right.

      Commenter
      Titch of ACM
      Location
      Date and time
      May 09, 2014, 1:37PM
  • I see a lot of people here lament that they sold 'too soon'. Frequently we watch the share price climb the days after selling it. It's hard to ignore. but we should. Here is a tale from me. Earlier this year I sold BCI at $4.98 (pre dividend). At that point I had made about 25% in 6 months, plus a juicy dividend. It was with dismay that I then watched it get close to $5.50 shortly afterwards. A few months later it's now touching $4.00. Likewise when I sold GEM at $4.75, six weeks ago (30% profit + divs), only to watch it hit $5.10 a few days later. Now it's $4.20. I didn't pick the top in either but if I was trying to be 'too clever', I could have lost most of the gains.

    Commenter
    Calculator
    Location
    Date and time
    May 09, 2014, 11:28AM
    • Very true. Paper profits are just that.

      Commenter
      Yin or yang
      Location
      Date and time
      May 09, 2014, 11:46AM
    • Clever is to have a target price,realistically, and stick to it pending SPPs and takeovers a position needs to be reconsidered but a "stop win" as well as a "stop loss" isnt a bad thing.
      good for you taking the profits,i got outta GEM as well.

      Commenter
      BearshapedBull
      Location
      Mugpunters Lounge
      Date and time
      May 09, 2014, 12:06PM
    • Those worked out well for you Calculator, but there's plenty go the other way too!

      On July 4, 2000, I bought 10,000 Ramsay Health Care at $0.90. I sold them on November 13, 2000 for $1.45.

      A 60% profit in 4 months, hard to argue with? But today those shares are $45 each.

      I used to trade in and out of stocks all the time, but experience taught me that the only real way to grow wealth is to buy good stocks and hang on to them.

      Commenter
      pass the red
      Location
      Date and time
      May 09, 2014, 12:16PM
    • GEM's current price around $4.22 (Trading Halt to raise more debt) is much lower than their SPP price of $4.60 that has been extended. Too much expansion too fast perhaps. Next Tuesday night probably won't help either.

      Commenter
      mitch of ACT
      Location
      Date and time
      May 09, 2014, 12:18PM
    • I no longer trade due to time constraints but when I did I simply used a stop-loss. As the price rose I would increase my stop-loss accordingly, that way my decision was never emotional.

      In your case I wouldn't have sold @4.98 unless I truly thought it was the top. As the price rose to $5.50 I would have lifted my stop-loss to say $5.10 and sold out accordingly (note: my stop-loss could have been $4.80. Each stop-loss is stock/economic specific).

      Commenter
      Life Is Good
      Location
      The Real World
      Date and time
      May 09, 2014, 12:42PM
  • so we have:

    a budget emergency
    record emergency low interest rates
    highest level of personal debt in decades
    house affordability/FHB participation at record lows
    consumer/business confidence plummeting
    contracting manufacturing base
    China slowing, US/Europe crawling
    horror budget about to hit
    real unemployment on the rise

    just as well I can bask in the glory of the "wealth effect" from my mega mug mortgage on my shoddy built dog box...LOL

    Commenter
    lucky me
    Location
    Date and time
    May 09, 2014, 11:24AM
  • PRR up 47% to $0.053. I bought these back in August 12 for $0.12, so have been hurting a bit. Any thoughts on whether to sell or keep hanging in? I like what the company does, but senitiment is not a good reason to invest.

    Commenter
    confused
    Location
    Date and time
    May 09, 2014, 11:18AM
    • FDA approval announced today. Biotech's SP often slips back after a flurry on good news. Three options - sell up, sell up and rebuy if it slips back quite a bit, hold and hope for $0.12. Personally I'd do option 1 or 2 though I note the SP slip has already happened.

      Commenter
      Yin or yang
      Location
      Date and time
      May 09, 2014, 12:08PM
    • FDA approval announced today. Biotech's SP often slips back after a flurry on good news. Three options - sell up, sell up and rebuy if it slips back quite a bit, hold and hope for $0.12. Personally I'd do option 1 or 2 though I note the SP slip has already happened.

      Commenter
      Yin or yang
      Location
      Date and time
      May 09, 2014, 12:11PM
    • FDA approval announced today. Biotech's SP often slips back after a flurry on good news. Three options - sell up, sell up and rebuy if it slips back quite a bit, hold and hope for $0.12. Personally I'd do option 1 or 2 though I note the SP slip has already happened.

      Commenter
      Yin or yang
      Location
      Date and time
      May 09, 2014, 12:13PM
    • FDA approval announced today. Biotech's SP often slips back after a flurry on good news. Three options - sell up, sell up and rebuy if it slips back quite a bit, hold and hope for $0.12. Personally I'd do option 1 or 2 though I note the SP slip has already happened.

      Commenter
      Yin or yang
      Location
      Date and time
      May 09, 2014, 12:17PM
    • FDA approval announced today. Biotech's SP often slips back after a flurry on good news. Three options - sell up, sell up and rebuy if it slips back quite a bit, hold and hope for $0.12. Personally I'd do option 1 or 2 though I note the SP slip has already happened.

      Commenter
      Yin or yang
      Location
      Date and time
      May 09, 2014, 12:21PM
    • @YorY button stuck?
      @confused...crikey im trying to think back when they were 12c..accum for me 3.9-4.2c holding 27500 i like em to but the chestnut tree sways and says
      "stocks dont care who owns them"

      Commenter
      BearshapedBull
      Location
      FDA drinks Lounge
      Date and time
      May 09, 2014, 12:48PM
    • Thanks for comment YY. Have now sold and will wait and see what happens. Slipped back to 0.48, but that's better than what it was last week.... Expect it will drop down again although now that I have sold, it will probably skyrocket...

      Commenter
      confused
      Location
      Date and time
      May 09, 2014, 12:49PM
    • BSB : bought on 29 November 2012 and 24 August, both at 12c. Your accumulation looks a lot better than mine :-). It has been a long haul, especially since I think they were up much higher than 12c at some point and I hung on because I like the company.

      Commenter
      confused
      Location
      Date and time
      May 09, 2014, 1:46PM
  • All the Government tax increases as well as fuel and levies and charges will make it easier for the RBA to leave interest rates in neutral for longer. Could even be a case for decreasing rates which will see the dollar lower. Mind you lower dollar will mean little for Australia as falling commodity prices will make it worse. Australia will head right into recession when USA and Europe is coming out.

    Commenter
    Viking
    Location
    Sydney
    Date and time
    May 09, 2014, 11:15AM
  • ORG what did you tell them in that Macquarie investor presentation? i really liked that pretty coloured flyer..but todays performance....looks like someone farted in the presentation.

    Commenter
    BearshapedBull
    Location
    Mugpunters Lounge
    Date and time
    May 09, 2014, 11:14AM
    • @BSB too much greenhouse gas weighing on the price?

      Commenter
      mitch of ACT
      Location
      Date and time
      May 09, 2014, 12:00PM
  • Philippine credit rating upgraded from BBB- to BBB...highest ever rating for the country. I still think we should be looking at more in Aisa than just china...Phils and Indo are both growing well

    Commenter
    Wwwish Lion
    Location
    Melbourne
    Date and time
    May 09, 2014, 11:11AM
  • I am short on Wollies, Wesfarmers, JBH, Myer and DJs. The new budget will leave most people with less money to spend.

    Commenter
    Viking
    Location
    Sydney
    Date and time
    May 09, 2014, 11:11AM
    • Or, it will leave people with less money for travel, investing, cars, nights out.
      I doubt tax hikes will really make the majority stop buying essential goods.

      Commenter
      Irish Phil
      Location
      Date and time
      May 09, 2014, 12:05PM
    • @Irish the carbon tax caused a drop in electricity use of 8%. Consumers could switch to cheaper essential goods so the retail spend drops. With high mortgages many don't spend on the absolutely non-essentials now.

      Commenter
      mitch of ACT
      Location
      Date and time
      May 09, 2014, 12:24PM
    • Also would have meant that the transmission and distribution network becomes more of a stranded asset. Fixed costs(supply charges) would have had to increase.

      Commenter
      Titch of ACM
      Location
      Date and time
      May 09, 2014, 1:41PM
    • Young Adults priced out of the property market are spending up on high quality goods. Note that DJs is doing quite well whilst Myer not so. Gen Y or whatever its called has expensive tastes.

      Commenter
      Ryan
      Location
      Date and time
      May 09, 2014, 5:03PM
  • Scott Morrison is creating a new border protection super agency, would this be led by another five star General?

    Commenter
    Viking
    Location
    Sydney
    Date and time
    May 09, 2014, 11:09AM
    • Yes, of course.

      Commenter
      Wwwish Lion
      Location
      Melbourne
      Date and time
      May 09, 2014, 11:52AM
    • get ready for more PS retrenchments

      Commenter
      fortune cookie
      Location
      Date and time
      May 09, 2014, 11:57AM
    • A 5 Star General bubble is definately forming.

      Commenter
      Joe the POM
      Location
      Geelong
      Date and time
      May 09, 2014, 2:15PM
  • Why is the SMH accepting these real estate seminar ads here. Do they really think that we are that dumb.

    Commenter
    mitch of ACT
    Location
    Date and time
    May 09, 2014, 11:05AM
    • more revenue for Domain
      and yes some people are that dumb!

      Commenter
      fortune cookie
      Location
      Date and time
      May 09, 2014, 12:00PM
  • sell 5000 MCR @ 0.92
    nickel may go higher but a targets a target.

    Commenter
    BearshapedBull
    Location
    Mugpunters Lounge
    Date and time
    May 09, 2014, 10:59AM
    • Gotta respect your discipline re profit taking.

      Commenter
      YIn or yang
      Location
      Date and time
      May 09, 2014, 12:27PM
  • Why is Gvt. Talking economy down when we have triple A rating. Economic uncertainty kills all kinds of investment including share markets.

    Commenter
    Jock
    Location
    Kew
    Date and time
    May 09, 2014, 10:47AM
  • Iron ore is an oligopoly that China is determined to break and they will.

    Last short on FMG $6. Come in spinner!

    Commenter
    Allan
    Location
    Prahran
    Date and time
    May 09, 2014, 10:39AM
    • Who got on fmg short at circa $12? I did!!!!! WINNING!! Enjoy!!!!!

      Commenter
      Herman
      Date and time
      May 09, 2014, 1:15PM
  • Don't you wish that politicians were held by law to the same advertising standards as retailers. Truth in advertising or penalties apply. It's not like they can't argue that the state of the economy is any worse than expected when they made their promises. They were given a complete set of the books prepared independent of government interference before the election under the Charter of Budget Honesty. Even though that was instituted by one of their own the Libs have never wanted to play by those rules. Fudging the numbers and assumptions and lobbing extra expenses onto the books after the event is not acceptable. Howard did it in '96 to create the Beazely Black Hole and now this lot have exceeded that low standard. They say that if you are not happy then you can show that at the next election. Sorry, that's way too long to wait. Perhaps the Thailand solution should apply and we get to sack the PM.

    Commenter
    mitch of ACT
    Location
    Date and time
    May 09, 2014, 10:33AM
    • My biggest wish is that you'd stop flooding this site with your political rubbish. And I'm not alone.

      Commenter
      Investor
      Location
      Date and time
      May 09, 2014, 10:54AM
    • Companies with heavy reliance upon the consumer sector are going to be hit very hard by this budget. The weakness in consumer spending will flow through the economy to affect basically every other sector - banking, construction, energy, healthcare etc. Just about the only sector which might be insulated from the devastating effects of this budget is mining.

      Election now please.

      Commenter
      Basic
      Location
      Date and time
      May 09, 2014, 10:58AM
    • you know its a crime to incite, right mitch? if we couldnt get rid of gillard sooner fair is fair....

      Commenter
      Wwwish Lion
      Location
      Melbourne
      Date and time
      May 09, 2014, 10:59AM
    • How 'bout a firing squad!
      I am absolutely sick and tired of having to walk a fine line while the scumbag pollies (from both sides) seem to get away with anything they like!
      If any of us conducted ourselves the way they do, we'd all end up in jail !

      Commenter
      Human Trader
      Location
      Sydney
      Date and time
      May 09, 2014, 10:59AM
    • My thoughts exactly. They will spend the rest of the electoral period talking up the economy. But the damage has been done.

      Commenter
      Red Rooster
      Location
      Smelling the Roses
      Date and time
      May 09, 2014, 11:40AM
    • @Investor, no you are not alone, you're shadow is right there with you.
      @Wwwish, let's hope for a double dissolution. Very democratic and peaceful. Because voters will express their absolute disgust on the Libs broken promises and still don't like Labor, Clive Palmer will end up with the balance of power in the Reps & the Senate and thus become Australia's defacto PM.

      Commenter
      mitch of ACT
      Location
      Date and time
      May 09, 2014, 11:50AM
    • Good point. I am just waiting for the day when some rich guru sues a government for breach of electoral promise. BOTH parties are EXACTLY the same.

      Commenter
      Gumly
      Location
      Mackay
      Date and time
      May 09, 2014, 11:55AM
    • if Clives got the balance of power who's on the other end of the see saw?
      oops drinks taken effect.

      Commenter
      BearshapedBull
      Location
      FDA drinks Lounge
      Date and time
      May 09, 2014, 12:56PM
  • Did anyone find my $100K down the back of their couch?

    Commenter
    Ace cleaning services
    Location
    Date and time
    May 09, 2014, 10:32AM
    • If you have nothing to say why you don't keep quiet... It is not compulsory to post something you know?

      Commenter
      Mr.Kunde
      Location
      Date and time
      May 09, 2014, 10:53AM
    • Too late, Hockey found it.

      Commenter
      mitch of ACT
      Location
      Date and time
      May 09, 2014, 11:03AM
    • Abbott's sounds like he's already been to your house a few days early.

      Commenter
      Goldfinger
      Location
      Sydney
      Date and time
      May 09, 2014, 11:27AM
    • I think you left it at Channel 9...

      http://www.theage.com.au/victoria/janitor-cleans-up-after-finding-100k-in-channel-nine-toilet-20140509-zr7aq.html

      Commenter
      Life Is Good
      Location
      The Real World
      Date and time
      May 09, 2014, 12:54PM
  • All gains from yesterday gone Hang on they weren't gains just catchup from losses on Wednesday. ASX loses A half a years profit in less than 30 mins. Are you kidding What a joke.

    Commenter
    Macca
    Location
    Sydney
    Date and time
    May 09, 2014, 10:31AM
    • why don't you go with the flow and make money on the stock market. You would be much happier

      Commenter
      fung fang
      Location
      china
      Date and time
      May 09, 2014, 11:19AM
    • Stop index watching if you can't stand it. Find some companies that you like the prospects of, wait until their stock prices are reasonable and then buy them.

      Commenter
      TP
      Location
      Date and time
      May 09, 2014, 12:05PM
    • theres money in index put options if you see the market retreating.

      Commenter
      mushy
      Location
      lost
      Date and time
      May 09, 2014, 12:29PM
  • buy 3900 more BDR @ 64c

    Commenter
    BearshapedBull
    Location
    Mugpunters Lounge
    Date and time
    May 09, 2014, 10:29AM
  • One of the consequences of privatising "brownfield" assets to fund "greenfield" assets was highlighted by Asciano. Their rentals on spaces at the ports has increased by 350% under privatisation. That increases the cost of imports and consumer prices and also increases the cost of handling our exports. http://www.thebull.com.au/articles/a/45861-port-privatisations-hurt-economy:-asciano.html

    Commenter
    mitch of ACT
    Location
    Date and time
    May 09, 2014, 10:28AM
  • JBH plans to eat their own dog food. That never ends well.

    Short. $$$$

    Commenter
    Allan
    Location
    Prahran
    Date and time
    May 09, 2014, 10:26AM
  • The four knights of the Apocalypse are coming. Short the banks !

    Commenter
    jack the stirrer
    Location
    londinium
    Date and time
    May 09, 2014, 10:25AM
  • PTR you didn't count interest and net rental return are 1.5% not 4%.

    Knockout.

    Commenter
    Allan
    Location
    Prahran
    Date and time
    May 09, 2014, 10:24AM
    • Agreed. You have knocked yourself out. Surprised you're back after the beating you had yesterday. Punch drunk?

      Commenter
      Titch of ACM
      Location
      Date and time
      May 09, 2014, 1:46PM
  • I was wondering when the pre-Budget sell-off would start. Today's the day. The Budget will be bad news for the market as the level of consumer spending drops to make way for increased taxes/levies/charges/excise and declines in benefits. As Paul Keating said on Lateline last night that consumers only have so much to spend after taxes. Increasing those taxes means less spending. Simple. The States will soon start screaming as their GST collections drop away.

    Commenter
    mitch of ACT
    Location
    Date and time
    May 09, 2014, 10:23AM
    • Let's get Labor back into power so that we can start borrowing money again and keep that asset bubble expanding!

      Commenter
      Dr No
      Location
      Sydney
      Date and time
      May 09, 2014, 10:31AM
    • Labor was starting to cut back on spending in the lead-up to the election as evidenced by the increase in efficiency dividends on the public service. There is still a great need for on-going stimulus as we are still under the influence of the GFC. Other countries are still in stimulus mode. The consequences of the over-the-top cutbacks from this lot could very well be an unemployment rate with a 7 in front and a much larger deficit from lost taxes and higher benefit payments.

      Commenter
      mitch of ACT
      Location
      Date and time
      May 09, 2014, 11:11AM
    • Dr. No. I could be wrong but I think the Fed Gov. borrowings are mostly from Australian's, so that should not create much by way of new net financial assets.

      I think the money creation by private banks - which absolutely dwarfs that by the public sector - might have a bit more to do with asset bubbles in Australia, if you consider equities and property to be in bubble territory.

      Commenter
      Oh_Mighty_zeus
      Location
      Date and time
      May 09, 2014, 11:32AM
    • @Zeus - Agree, it's not the federal governments fault that we've got asset bubbles. The US is more to blame. But at the very least we should aim for a budget surplus to dampen consumption and the speculations.

      @mitch - you joker! "...we are still under the influence of the GFC..."

      The length of a recession is usually a year or two, at most. Don't you understand that the GFC is the new normal and the cause of it is too much borrowing, too much consumption, too low fertility, too early retirement, too many entitlements and welfare, etc.

      Your solution for solving the GFC is too continue the disease, but on steroids?!?

      Commenter
      Dr No
      Location
      Sydney
      Date and time
      May 09, 2014, 11:56AM
    • Gov't debt is not the bad thing the gov't makes it out to be. Gov't debt is required by the investment sector to help set rates and for the ultra-secure investments some sectors require. It's how that debt is spent that can be cause for concern. If it's spent on just day-to-day expenses that's no good. Debt spent on infrastructure helps to build the economic base for future productivity and is for our long-term benefit.

      Commenter
      mitch of ACT
      Location
      Date and time
      May 09, 2014, 12:05PM
    • @Dr No the GFC was a recession on steroids and it's closest neighbour was the Great Depression. That lasted 10 years due to inappropriate economic response by gov'ts in stopping spending instead of stimulating their economies. The Great Depression was only effectively ended by the spending and manpower requirements of WW2. Let's hope Ukraine or the China Sea problems don't boil over so we don't revisit history.

      Commenter
      mitch of ACT
      Location
      Date and time
      May 09, 2014, 12:36PM
  • ADO buy 20000 @ 0.19
    AUT buy 1010 @ 3.915
    TO date got pushed back but its a certain 19c a share i need more......

    Commenter
    BearshapedBull
    Location
    Mugpunters Lounge
    Date and time
    May 09, 2014, 10:20AM
  • Some here like to state that Australia is being overrun with 457 workers, so what percentage of the Australian workforce do you think is made up of 457 visa holders?

    Commenter
    Irish Phil
    Location
    Date and time
    May 09, 2014, 10:16AM
    • Latest figures show 111,800. http://www.businessspectator.com.au/news/2014/5/8/industrial-relations/union-worried-about-foreign-workers
      It will get worse "More recently, an Abbott government bid to remove red tape has reportedly led to a loophole allowing bosses to hire an unlimited number of foreign workers."

      Commenter
      mitch of ACT
      Location
      Date and time
      May 09, 2014, 10:30AM
    • Meaningless question Phil. An economist would tell you that prices are determined at the margin. More to the point here, you should also enquire into the sectors that have been over-run by 457 and other visas, like IT and how it is affecting them. One thing for sure, it is a way of avoiding training up people and this is not good for the long term of the economy although in very limited situations like our once in a century mining boom, like the sudden need for a very particular specialist welder to work on the LNG projects, one could argue there is a place for them. That is all.

      Commenter
      James
      Location
      Date and time
      May 09, 2014, 10:42AM
    • I'de guess about 10,000 out of almost 7 million workers....p.s. i dont care

      Commenter
      Wwwish Lion
      Location
      Melbourne
      Date and time
      May 09, 2014, 10:51AM
    • Mitch: The official number is about 90k, out of a workforce of 11.5m = 0.78%.
      Also, will it really grow? Many of those 457 workers, move onto PR and citizenship (as I did), so the pool could potentially shrink.

      Commenter
      Irish Phil
      Location
      Date and time
      May 09, 2014, 10:57AM
    • @James: don't you feel the threat to IT workers is coming more from off-shoring? That is certainly my experience from having led cost reduction projects.
      Also, many 457 worker's come here as more skilled and experience than available local workers - although I accept this may apply more to financial services where I work.

      Commenter
      Irish Phil
      Location
      Date and time
      May 09, 2014, 11:00AM
    • Seriously, does anyone even care about the 457 visa workers? I mean if you are in a job area where you might be affected by such employees, you probably aren't in a growth/specialised field which is where you should be looking to work.

      Commenter
      DR
      Location
      syd
      Date and time
      May 09, 2014, 11:11AM
    • Dr, what are all these specialist knowledge areas that exist in such abundance?

      Phil, if you keep pulling the rug from under the locals they turn away. This is why only half as many people now study IT as in the late 90s, it has come to be seen as a risky career option. What's even worse, is even areas like hospitality and hairdressing - hardly the areas calling for great intellect - have been sourcing or demanding people on work visas. Finally, the vast majority of IT work really can be mastered by people with decent high school education. That's the truth. It's not particle physics. So all we're doing is making career development in Australia unnecessarily difficult. But hey, by giving employers the option, why should they invest in local development of skills?

      Commenter
      James
      Location
      Date and time
      May 09, 2014, 11:54AM
    • @DR: here here, well said.

      Commenter
      Irish Phil
      Location
      Date and time
      May 09, 2014, 12:07PM
    • I'm with DR and Lion.

      It's a non-story.

      Commenter
      Life Is Good
      Location
      The Real World
      Date and time
      May 09, 2014, 1:05PM
  • 20 March: NAB ceases to be a substantial holder in BKN
    30 April: NAB becomes a substantial holder in BKN
    05 May: NAB ceases to be a substantial holder in BKN
    06 May: NAB becomes a substantial holder in BKN
    08 May: NAB ceases to be a substantial holder in BKN

    Can one of you more knowledgeable bloggers explain this to me? From my limited view it smells of manipulation and its really p!$$!ng me off as the SP has dived over the past few months. Whilst there are some market influences contributing to the decline, the scale suggests other things at work also.

    Commenter
    Getting angry
    Location
    Date and time
    May 09, 2014, 10:11AM
    • They are shorting it and/or lending out shares to others to short.

      Just remember the big 4 banks aren't always "the good guys" when you see them become substantial holders in oversold/dog stocks.. it's not always because they see value or a rebound. Only maximum profits matters.

      Commenter
      GS
      Location
      Date and time
      May 09, 2014, 10:35AM
    • heres my tilt...not sayin i'm more knowledgeable.
      SHORTING
      So shorters swarm a stock then short sell it down down trying to buy in cheaper to pay the shares brokers back, then the brokers gets onboard to get the stock price lower so they can return the lent out shares to their books cheaper to pay the shorters back and the whole spiral continues...what a f*&kup.

      Commenter
      BearshapedBull
      Location
      Mugpunters Lounge
      Date and time
      May 09, 2014, 10:38AM
    • Others may have a better handle on it, I find I difficult to digest these 'substantial holding' declarations. Looks like a 'wobble' in NAB holdings rather than total divestment. IMO, it wont be the cause of SP decay but may be in response to it.

      Commenter
      Yin or yang
      Location
      Date and time
      May 09, 2014, 10:50AM
    • OK, thanks GS and BSB. So that leads into the obvious next question. Is it legal to do that? If the SP is being bid down artificially, aren't they adversely affecting the value of an otherwise good company to the extent that they may become a takeover target? And all because an unscrupulous 3rd party manipulated for their own purposes? Am I wrong? It stinks.

      Commenter
      Getting angry
      Location
      Date and time
      May 09, 2014, 11:01AM
    • It stinks and your not alone in smelling it, legal hey its a monopoly game where those with large amounts of coin can manipulate any companies sp on any given day whichever way they want....so big end of town gets a free reign.
      that and HFT and dark pools and insider trading...crikey dont get me started i may convince myself its a rigged game only intent on sucking all the wealth from mugpunters...but i could be entirely wrong.

      Commenter
      BearshapedBull
      Location
      Mugpunters Lounge
      Date and time
      May 09, 2014, 11:50AM
    • I've been watching UBS work this way for 2 years now in multiple stocks so I guess it's legal.

      They could argue that the mining services industry is on a longterm down trend and that the shares are overvalued etc. Shorting and closing shorts around the 5% level will have them on & off the substantial holding list and they would just say they are trading/shorting and nothing is actually illegal.

      I also got temporarily caught in BKN last year in the mining services sell off. Managed to get out with a small loss (would have been worse if I held). Now I will only trade NRW, MDN, & MRM. I feel more comfortable holding oil & gas MS companies and currently only hold Mermaid Marine.

      If I was holding BKN now, I would just hold, keep receiving the div and probably sell on the next rise (potentially $5.50 to 6 just looking at the chart trend).

      Commenter
      GS
      Location
      Date and time
      May 09, 2014, 11:59AM
    • Sorry I was looking on the weekly chart with those figures. Short term I meant $4.50 to $5 by next div. But sentiment and market selloff in the next few months could ruin that too.

      Commenter
      GS
      Location
      Date and time
      May 09, 2014, 12:01PM
    • remember shorting also costs the shorter bucks for interest on the borrowed shares.
      a bit of short interest volatility should create buy signals eh??

      Commenter
      mushy
      Location
      lost
      Date and time
      May 09, 2014, 12:16PM
  • ASX Spi was +1 then reset to -6 market down 28 Dow up Ftse up Excuse ANZ Ex Div. we have known ANZ was going Ex Div for weeks. What a joke.

    Commenter
    Macca
    Location
    Sydney
    Date and time
    May 09, 2014, 10:10AM
    • Glug, glug, glug ...

      Commenter
      Human Trader
      Location
      Sydney
      Date and time
      May 09, 2014, 10:35AM
    • Massive yawn.

      Commenter
      what a joke
      Location
      what a sick joke
      Date and time
      May 09, 2014, 10:55AM
  • Fuel taxes going up, income taxes going up, paying more for doctors. Who knows what other hidden gems will be in the budget. But we can't have that mining tax - it'll hurt the economy!

    I'm holding off on buying anything until after next week and the full horror of Tuesday's budget is revealed (and which hairbrained CoA recommendations are accepted). I'm guessing that stocks like WOW and WES are going to be hit particularly hard over the coming year. The government of no surprises keeps coming up with new taxes which will directly hurt people's hip pocket.

    Commenter
    Basic
    Location
    Date and time
    May 09, 2014, 10:02AM
  • SBM
    Our system’s recommendation today is to STAY SHORT. The previous SHORT recommendation was issued on 4/8/2014, 30 days ago, when the stock price was 0.2630. Since then SBM has fallen by -31.56%.
    Market Outlook With the bullish pattern detected today candlesticks warned short sellers to be on alert. Market sentiment may be changing in the direction of the bulls.
    Oversold.....

    Commenter
    BearshapedBull
    Location
    Mugpunters Lounge
    Date and time
    May 09, 2014, 9:55AM
    • I think it was oversold at 38c also. Then again at 21c then at 19c. Be careful of this one, not for mum and dad investors! ROFLMAO

      Commenter
      Angry
      Location
      Bird
      Date and time
      May 09, 2014, 10:09AM
    • Oversold - maybe? SP has dropped a lot but SBM is a) not a profitable gold miner at the current POG and b) carrying a lot of debt. A lessen I've learnt the hard way is that a companies SP can ALWAYS go lower.

      Commenter
      yin or yang
      Location
      Date and time
      May 09, 2014, 10:16AM
    • Is your 'system' to go short if Allan goes long? Will outperform most of the time if so.

      Commenter
      Just
      Location
      Wondering
      Date and time
      May 09, 2014, 10:23AM
    • You could almost say now is the right time to buy inot SBM dowb 50% since first call (gift). SBM has been smashing through floors since. Unless you are a fantasy trader and timed it all perfectly as though you could post trades from the future I would be wary.

      Commenter
      Angry
      Location
      Bird
      Date and time
      May 09, 2014, 10:24AM
    • LOL lots of angry bulls this morning. Shhh... don't mention XRO x3, LY, BBG, QAN short at 1.90, FMG x3, ARI x2, WM, TEN, MMS x2, NCM, JBH x2.. shh...

      Commenter
      Allan
      Location
      Prahran
      Date and time
      May 09, 2014, 10:30AM
    • Oh and previous closes on SBM yielded 14% and 24% as posted. Sorry.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      May 09, 2014, 10:31AM
    • Hey Tweety, how do you deal with your Allan obsession on weekends? Do you read through your log of his old posts or do you work on the statue of him made from chicken wire and mashed potato?

      You are a concern.

      Commenter
      sylvester
      Location
      Date and time
      May 09, 2014, 10:32AM
    • up 4.17% when other goldies are down so the bullish sentiment came thru....

      Commenter
      BearshapedBull
      Location
      Mugpunters Lounge
      Date and time
      May 09, 2014, 10:36AM
    • Yep just more and more lies he he. Thanks for playin

      Commenter
      Angry
      Location
      Bird
      Date and time
      May 09, 2014, 10:54AM
    • im short LYC long FMG short SBM short XRO long QAN long JBH how good am i,,,,short long short short long.

      Commenter
      Shortylongpants
      Location
      Squeezeville
      Date and time
      May 09, 2014, 11:00AM
    • No mention of your 50% loss on lyc or 20% loss on mqg or similar with BOQ (to name a few) You like to take all things into consideration when talking about the housing market, how about you do the same with your "trades"

      Commenter
      big al
      Location
      disneyland
      Date and time
      May 09, 2014, 11:49AM
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