That’s it for Markets Live today.
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A strong quarterly production report from Australia’s biggest resources company pushed the sharemarket to a six-year closing high for the third day in a row.
The benchmark S&P/ASX 200 Index and the broader All Ordinaries Index each lifted 0.6 per cent on Wednesday to 5576.7 points and 5567 points, respectively, as inflation accelerated to its highest rate in 2½ years.
Shares pushed higher at the open with investors taking a positive lead from Wall St overnight. Asian markets provided mixed cues in the afternoon.
The Jakarta Composite Index added 0.5 per cent to 5107.7 points after Joko Widodo was officially declared the winner of the Indonesian Presidential elections on Tuesday night.
In local news the dollar spiked and shares were supported after Australian Bureau of Statistics data showed the consumer price index rose 0.5 per cent in the June quarter, posting a 3 per cent gain for the 2014 financial year. The Reserve Bank of Australia targets an annual inflation rate within the range of 2 per cent to 3 per cent.
Resources giant BHP Billiton jumped 1.2 per cent to a near five-month high of $38.98 after providing an even more positive outlook than expected as it upgraded iron ore production guidance for the current financial year. As was widely predicted, the miner’s Pilbara operations beat production guidance for the June quarter.
“BHP’s quarterly report looked pretty solid, with good volume performance in the key divisions. Importantly, the focus on tighter capital allocation seems to be continuing, which hopefully bodes well for capital management prospects going forward,” Maple-Brown Abbott head of Asia-Pacific equities Geoff Bazzan said.
Australia’s biggest iron ore miner Rio Tinto added 0.6 per cent to $64.53.
On Wednesday the spot price for iron ore, delivered in China, dipped 0.6 per cent to $US95.40 per tonne. When the ASX closed, Dalian iron ore futures trading in China was tipping another fall overnight.
The big four banks were higher amid hopes of continuing low interest rates.
Among other major blue-chip stocks Telstra Corporation ascended for the tenth consecutive session, up 0.4 per cent to $5.45. Woolworths gained 0.7 per cent to $35.94, and Wesfarmers added 0.7 per cent to $43.65.
More on Lynas, which has been on a tear in recent days.
This from reporter Sally Rose:
BBY Ltd analyst Mike Harrowell , who owns Lynas stock, said investors seemed to be heartened that the company has now passed the point by which it would be required to disclose if it was at risk of missing June quarter production guidance ahead of a formal update at the end of July.
“If Lynas does meet its production guidance it will mark an important milestone in the Malaysian processing plant achieving profitability,” said Mr Harrowell.
Here are the winners and losers today.
We've been trying to ignore it, but Lynas is up big time once again - by 17.7 per cent today and up almost 50 per cent in the past three sessions.
The market responded warmly to Sims Metal Management's plan to quadruple earnings in five years, while uranium Paladin Energy claims the wooden spoon.
Best and worst performers in the ASX 200 today.
After almost topping 5600 in the early afternoon, the benchmark index eased to nonetheless post a solid gain of 33 points, or 0.6 per cent, and close at 5576.7.
The All Ords was up a similar amount at 5567.0.
The metals and mining sector was the best performing, up 1.1 per cent for the day after BHP posted blockbuster quarterly production reports, sparking optimism on the sector. Rio gained 0.6 per cent and Fortescue 0.2 per cent.
Woodside added 1.2 per cent.
Banks enjoyed a nice bounce after mixed results in recent sessions. The big four all gained.
Wesfarmers and Woolworths advanced 0.7 per cent.
Among the laggers were Suncorp, which was down 0.6 per cent, and Incitec Pivot, which fell 1.6 per cent.
Two of the country's largest banks have slashed their fixed mortgage rates, as lenders seek to win new customers by allowing borrowers to lock in longer-term interest rates of less than 5 per cent.
The Commonwealth Bank and National Australia Bank became the latest banks to cut fixed rates, each giving borrowers the chance to lock in historically low rates over the longer term.
After the Commonwealth cut its five-year loan to 4.99 per cent, a new low for the bank, NAB responded by matching the reduction and also cutting its three and four-year loans.
With banks tapping overseas markets for cheaper funds, NAB's four-year loan was cut to 4.99 per cent and its three-year product to 4.94 per cent.
In testimony before the US Senate this week, US Fed chair Janet Yellen argued that:
“While prices of real estate, equities, and corporate bonds have risen appreciably and valuation metrics have increased, they remain generally in line with historical norms.”
If we focus on the all important equity market, such a statement seems reasonable at face value. After all, as at mid-July, the S&P 500 price to 12-month forward earnings ratio is around 15.6, which is only slightly above its average since the late 1980s of 15.4.
Relative to US 10-year government bonds yields, moreover, US equity valuations still appear on the cheap side, with the differential between the market’s forward earnings yield (inverse of the forward PE ratio) and 10-year government bond yields at 3.8%, or well above the average since the late 1980s of 1.6%.
So far so good; but here’s where it gets complicated. For starters, part of recent history includes a notable period of internet-related bubble conditions from the late 1990s to early 2000s. In the six years to mid-2002, for example, the PE ratio averaged an uncomfortably high 20.2 times forward earnings. Excluding this period, the forward PE ratio averaged only 13.8, suggesting current valuation levels of almost 16 may be getting uncomfortably high.
What’s more, valuations relative to interest rates are being supported by unusually low bond yields. At 2.5%, 10-year government bond yields are about half their average level since the late 1980s. Yields are also still well below their decade average of 3.4 per cent.
The other lingering concern with the US equity market is the sustainability of corporate profits. Again, price-to-earnings valuations have also been supported by an unusually strong upward trend in the US corporate profit share over the past 15 years.
US shares looks OK value on the surface, but they may be more expensive that they appear. Source: BetaShares
SomnoMed, an upstart medical device maker challenging market giant ResMed, has delivered a record quartererly sales result that has boosted its share price by 14 per cent.
The market minnow, with a market capitalisation of $72 million, sold 11,973 units of its mouth guard-like device that treats obstructive sleep apnoea in the three months ended June 30. OSA is caused when obstruction of the upper airway causes breathing difficulties and is commonly associated with snoring.
The result was 17.6 per cent higher than the same period last year and was the highest quarterly sales result in the company’s history. Total sales for 2014 financial year of 43,438 units was 21 per cent above the previous year.
Off the back of the strong result, which beat analysts’ expectations, SomnoMed provided guidance for the first time. The company said it would sell more than 55,000 devices in the 2015 financial year. Wilson HTM analyst Shane Storey said this was about 8 per cent higher than his forecast.
“Greater visibility on the profit outlook should be well received by the market,” Dr Storey said in a note. “SomnoMed is moving towards genuine earnings growth, which we expect to see valued on a ‘medtech’ multiple.”
SomnoMed shares have soared by 13.8 per cent to trade at $1.82.
Despite the significant growth, SomnoMed still has a way to go before it challenges companies like ResMed and Philips in the $US8 billion ($8.5 billion) sleep apnoea market. Its guidance for the 2015 year represents revenue in excess of $32.5 million at current exchange rates.
At its full-year results announcement, slated for Friday August 1, analysts expect ResMed to report revenue of $US1.6 billion.
ResMed shares are up 1 per cent to $5.30.
Online skilled job vacancies are down for engineers, but up in building, construction and healthcare as the two-speed economy shifts gears away from mining in the west and back towards south-eastern Australia.
The federal Department of Employment’s monthly job vacancy report showed an increase of 1.8 per cent in skilled vacancies for June, an increase of 12.6 per cent from a year ago.
“The level is not high, but it is showing a few signs of life again – demand for labour has a little bit of life in it,” National Australia Bank’s senior economist David de Garis said.
In the past year, skilled vacancies have increased in 18 of the 20 occupation groups measured by the department. The strongest increase in vacancies have been in construction, up 41.6 per cent, and in medical practitioners and nurses, an increase of 40.4 per cent. The strongest decreases were recorded for engineers and science professionals.
There has been a regional component to the changing face of job conditions, as the mining boom has weakened, creating a “notable shift” in the vacancies landscape.
“Over the past two years, Western Australia’s share of vacancies has fallen by 4.3 percentage points to stand at 10.6 per cent in June 2014. By contrast, the share of vacancies in New South Wales has increased by 7.0 percentage points over the same period, to stand at 38 per cent in June 2014,” the report said.
The highest proportion of new vacancies were in New South Wales and Victoria, while the biggest falls were in outback Queensland, Kimberly and the Pilbara.
BHP Billiton has underscored its credentials in the race among major miners to increase export volumes, delivering a much stronger than expected 225 million tonnes in 2014 with expectations this will increase again by almost 9 per cent in 2015.
BHP boss Andrew Mackenzie is clearly putting a positive stamp on the company after 18 months in the job - managing to squeeze more from the company’s major assets while operating in a more constrained capital expenditure environment.
BHP is the latest of Australia’s big three to demonstrate that despite a weakness in the iron ore and coal prices, it is a volume game.
It’s clear that Australia’s big iron ore miners, particularly BHP and Rio Tinto (which sit at the lowest end of the cost curve) are all about pumping out more rather than choosing to restrain supply to push up the price.
BHP also posted strong production results in coal, copper and managed to significantly beat market expectation in petroleum.
It’s a result that got the investors’ pulses racing, pushing the share price up more than 1.7 per cent in the hours after the announcement.
But the elephant in the room remains.
In statements on Wednesday, BHP barely touched on the structural simplification options it has previously set out.
It has already outlined the assets which are non-core (let’s call the B group) that will be dealt with via sale or as part of a demerger.
For the big miners, it's a volume game. Photo: Michele Mossop
Interesting preliminary results from Biotron's ongoing phase 2 trials of its BIT225 agent in HIV-infected subjects sparked a surge in its share price but, as always, it is a case of caveat emptor!
At end-March, Biotron had cash on hand of about $2.65 million and was burning around $330,000 a month. Since then it has received a $1.7 million R&D refund, so it has around $3 million in hand, signalling it is likely to come back to the market for fresh funds sooner rather than later.
So the market's optimistic response to today's research results - pushing the shares up 20 per cent to 12.5c – should perhaps be tempered.
Biotron claims the latest results show BIT225 can reverse HIV-induced impairment of the immune system which, if ultimately proven, could be good news. But the result is from only a small patient base, and needs much more work - and significantly more money - to be ultimately proven.
Strategists at UBS have trimmed their year-end ASX 200 targets from 5700 to 5625 based on a “marginally more cautious view on the earnings outlook”.
The P/E re-rating of the market – where investors were prepared to pay more for the same earnings - has run its course, and now investors are looking for profit growth.
That sought-after growth looks unlikely to materialise in any material way in the next financial year.
Analysts expect the market will grow earnings by 13 per cent this financial year – what the UBS team calls “a short-lived bounce” – but company analysts are ratcheting down their expectations for EPS growth in the next financial year.
Six months ago the consensus forecast for FY15 EPS growth was 8.5 per cent – now its 5.2 per cent.
“Weaker iron ore prices, a resilient Aussie dollar and ongoing subdued top-line
conditions (of around 4 per cent revenue growth)” have made the UBS team “marginally more cautious on the earnings outlook”.
Companies that could pleasantly surprise investors come reporting time are: Burson Group, CSL, Genworth, Harvey Norman, Resmed, SMS Mgt & Tech, Sonic Health Care, and Woolworths.
Those that could disappoint are: Brambles, Coca-Cola Amatil, Cochlear, Domino's, GWA Group, Monadelphous Group, Myer Holdings, NRW Holdings, OrotonGroup, Premier Investments, Toll Holdings, Trade Me Group, Treasury Wine Estates, Wesfarmers, and Worley Parsons.
Earnings growth will slow next financial year, and that will also put the breaks on the market's gains for this year. Source: UBS
Cloud-based accounting software upstart Xero has put out fresh targets for the year ahead, telling shareholders at today's AGM it is targeting an 80 per cent lift in full year revenue from the $NZ70 million booked last financial year.
Additionally, its monthly revenue run-rate will top an annualised $US100 million, which will position it for a listing on a US exchange.
At present its shares are listed only in NXZ and on the ASX.
The shares are a long way off their peak from earlier this year of more than $40, holding this afternoon at $21.85, down 30c.
UBS analysts have downgraded Seek to “sell”, saying the Zhaopin initial public offer has “failed to crystallise value for shareholders despite placing the company in a stronger position to drive growth.”
UBS believes the market is valuing Seek’s domestic employment business on an ungeared FY15 P/E of 33, or 22 times FY15 EBITDA.
“This is a significant premium to Zhaopin on 16.1 times and 10.3 times respectively,” Eary wrote in a research note to clients on Wednesday.
“This premium is unwarranted especially given the domestic job market is about 70 per cent on-line penetrated versus only 15 per cent in China.”
The analysts lowered their recommendation from “neutral” and pegged Seek’s price target at $13.50 from $14.50.
UBS’s China team has placed a “buy” recommendation on 67 per cent-owned Seek China subsidiary Zhaopin and a $US16.80 price target.
“Our ‘buy’ call is underpinned by robust industry growth driven by rising urbanisation, a transition to a service-based economy coupled with increasing SME penetration,” the broker says.
The downgrade follows a similar move by Credit Suisse last week, with analysts retaining an overall consensus “hold” call.
The stock was down as much as 2.1 per cent today, but has rallied to be broadly flat at $16.59.
The easing Aussie dollar has flowed through to higher inflation for tradable goods. Source: JP Morgan
More analyses from economists on the implications from this morning’s inflation numbers are trickling out.
TD Securities’ Annette Beacher notes that underlying inflation came in “as RBA expected”, which “starves the doves”:
“The only strong conclusion we can draw is that this report pulls the rug out from under those calling for the RBA to voice an explicit easing bias before cutting the cash rate further,” she writes.
“There are two more CPI reports for the RBA to digest by late January, with the next one reflecting the repeal of the carbon tax. We expect the RBA to leave the cash rate at the record low of 2.5% until March 2015, with risks of a delay, not a rate cut.”
RBC Capital’s Su-Lin Ong broadly agrees, noting that “while the details were mixed, the data will likely challenge the rising speculation of a possible cut by year end”. She adds that the data was negative for bonds and supportive of the A$.
“We remain with our base case view for a modest tightening cycle to begin in Q2 2015,” she says.
JP Morgan’s Stephen Walters is singing the same song, saying that “on balance, the inflation data has surprised to the upside, thanks also to an upward revision to the prior core print” and that this “elevated core print should quell chatter about near term [cash rate] eases”.
“We forecast that the RBA will be inactive on policy for some time yet,” he adds.
Vodafone Hutchison Australia has continued to bleed mobile customers despite its previous chief executive Bill Morrow promising a return to growth by early 2014.
Vodafone Australia lost 137,000 mobile subscribers in the six months ending June 30, 2014 to reach 5.2 million after wholesale customers are included, according to Hutchison Telecommunications Australia’s (HTA) financial results.
“Although VHA’s operating performance today has improved, industry growth was subdued in the saturated consumer mobile segment,” the company said. “The relatively inert customer base was another hurdle to acquiring new customers.
“Against this background, VHA’s financial performance ... was mixed.”
Customer service revenue fell by 9 per cent thanks to its shrinking subscriber base and the continuing decline of voice and text message revenue.
Telstra has continued to dominate the mobile service market and is the only major telco to report an increase in its subscriber base. It has 15.8 million mobile subscribers compared to the 9.43 million at SingTel Optus.
Telstra has continued to dominate the mobile service market and is the only major telco to report an increase in its subscriber base. Photo: Glenn Hunt
The benchmark ASX200 is within spitting distance of 5600, with banks and miners riding high in a day of broad-based gains.
The last time the index was above that mark was April 2008.
Still some way to go to the pre-GFC peak of 6851.5, though...
Indonesia's next president, Joko Widodo. Photo: Getty Images
A man raised in a squat built on a river bank has been elected to be Indonesia’s next president.
Joko Widodo, who hopes not just to dominate Indonesian politics but to wrest it from the hands of Indonesia’s old, corrupt elite, was late last night pronounced the winner of the country’s presidential election with a convincing 53.15 per cent of the vote.
President Joko will not begin his five-year term until October 20, but last night he suggested that his success, which was driven by the work of thousands of volunteers, not party apparatchiks, signalled a flowering of hope in Indonesian politics.
“An independent soul and sense of political responsibility blossoms in the soul of the new generation. Their enthusiasm — which had sunk into torpor — has returned,” he said.
The election, in which he claimed support “from artists to rickshaw drivers,” had been a “cultural event, not merely a political event”, adding: “Politics is full of fun; politics has some wisdom; politics is freedom”.
But Mr Prabowo, a former army strongman and now three-time failed presidential candidate, tried to pre-empt the announcement by “withdrawing” from the entire election process, saying it was the result of “massive cheating that is structured and systematic”.
“[We] will exercise our constitutional rights by rejecting the presidential election because of its legal flaws and by retracting ourselves from the ongoing process,” Mr Prabowo said.
However, his team confirmed he would not challenge the result in the Constitutional Court, which means Mr Joko’s victory now appears final.
BHP this morning reported another record annual production of iron ore, ramping up supply even as iron ore price has plunged – by 30 per cent so far this.
Nobody appears to be expecting further falls of that magnitude in the back half of 2014, but producing more of a commodity in an environment of sinking demand and prices – are they crazy smart, or just plain crazy?
There’s an argument either way – as explained in one of the FT’s blogs.
It may be that flooding the market could help BHP consolidate its dominant position, as the falling price for the steel making material forces smaller miners out.
As has been well reported, lower grade ore is attracting a greater discount than previously, meaning smaller producers of lower quality ore are caught in the pincers of a higher relative cost base and a more dramatic decline in the price of their goods.
We’ve seen that with Atlas Iron’s report this week – at least on the price side.
And it's a story BHP execs have been happy to tell. This was BHP marketing president Mike Henry: "I think the dynamic of wider spreads [between the benchmark iron ore price and the price of lower grade ores] than we've seen in times when the market was tighter is absolutely here to stay."
So BHP – and Rio, perhaps Fortescue – may be able to squeeze out smaller producers, thereby reducing overall supply and improving the price.
Well, that’s the bull case.
The other side is that pumping out more and more of a commodity that people need less and less of is never a great strategy.
Analysts at Credit Suisse say they expect the benchmark iron ore price to slip to $US89 a tonne by 2015 (it currently stands at $US95 a tonne and reached $US191 a tonne in 2011).
That, they say, will reduce BHP's underlying EBIT by 14 per cent between 2014 and 2015 to $US20.3bn.
Looking much further out, the Credit Suisse analysts see BHP's annual profit, on this measure, recovering to $US23bn in 2018.
For some shareholders, as the FT bloggers point out, that could be too long to wait.
Quick reaction from ANZ economists:
"We view today’s outcome, and the inflation outlook more broadly, as neutral for monetary policy. It does not appear weak enough to justify a rate cut.
"Equally, it implies little urgency for the RBA to wind back very expansionary monetary policy. That will continue to rest on confidence and activity in non-mining sectors, the labour market and the path of the Australian dollar.
"At this stage, we retain our view that the RBA will remain on hold until Q1 2015, with risks tilted towards a later start or a more protracted tightening cycle."
ANZ economists reckon the latest CPI numbers are "neutral" for monetary policy.
The Aussie dollar has enjoyed a surge off the back of this morning's inflation figures.
The Aussie has jumped on the CPI data.
Consumer prices rose by 0.5 per cent in the June quarter, broadly in line with market expectations.
The quarterly growth, compared with 0.6 per cent in the preceding six months, equates to an annual rate of 3 per cent, up 0.1 percentage point at the end of the March quarter.
Despite rising consumer prices, the Reserve Bank of Australia is likely to remain sanguine about current inflation, focusing instead on the underlying result, as measured by the weighted median measure, which came in at 0.6 per cent for the quarter and 2.7 per cent year-on-year.
The trimmed mean measure came in ahead of expectations, 0.8 per cent q/q against 0.6 per cent expected, equivalent to an annual rate of 2.9 per cent, ahead of the 2.7 per cent consensus forecast.
Economist had forecast a headline figure of 3 per cent and 2.7 per cent for the underlying rate.
Analysts have also pointed to a moderation in price pressures in the second half because of sluggish consumer spending, wage restraint and job market weakness.
After trading down about 0.1 per cent, to US93.84 cents, throughout the morning, the Australian dollar bounced to US94.28 cents on the release.
CPI out in a bit over five minutes. Economists are expecting 3 per cent annual headline inflation.
Here's a chart to see where the various measures of inflation sit.
Inflation data looks to be comfortably within the RBA's target band.
The $2.3 billion Adelaide Brighton cement company has acquired a limestone and marble quarry being sold off by the administrators of the failed ASX-listed Penrice Soda, which collapsed in April with debts of $150 million-plus.
Adelaide Brighton is already a major customer of the quarry near Angaston in South Australia’s Barossa Valley, and it was one of two assets put up for sale by administrators McGrath Nicol.
The company declined to divulge the price it paid for the quarry.
Adelaide Brighton said it had entered into an agreement with the administrators and completion of the transaction was expected on July 30.
“The quarry acquisition represents a strong strategic fit for Adelaide Brighton by securing a high quality marble deposit for the supply of raw material to the company’s Angaston plant for lime and off-white cement manufacture,’’ the company said.
Adelaide Brighton already runs a separate specialist cement plant on the outskirts of Angaston, close to the Penrice quarry.
McGrath Nicol partner Sam Davies said the quarry would be transferred to Adelaide Brighton on a going-concern basis. He declined to disclose the sale price.
“In selling the quarry as an ongoing concern we have preserved a significant number of local jobs. We look forward now to working with Adelaide Brighton to finalise the terms of the sale ahead of completion next week,” he said.
Adelaide Brighton shares are 0.4 per cent lower at $3.61.
Want big returns? Go global.
Just as Australia seems to be losing its mojo, other countries are coming good.
Where unemployment is rising here, it’s falling in the US. The economies of the US, UK and most of Europe are picking up, admittedly from a low or in some cases barely visible base, while ours has been slowing.
In the year to June 30 global shares returned an average 22 per cent. The place to be was Argentina, where the sharemarket soared 165 per cent which, even after losing 51 per cent from the peso's collapse, certainly rewarded the brave. Venezuela was up 84 per cent and Egypt 72 per cent.
Then there’s the dollar. Although it’s holding its head comfortably above US90 cents you won’t find an economist anywhere who thinks it can stay there, let alone go higher.
Even the Reserve Bank, not one normally to forecast currencies, says the dollar is “overvalued, and not by just a few cents”.
It goes further with some fee-free financial advice: “We think that investors are underestimating the likelihood of a significant fall in the Australian dollar at some point.”
Looking at overseas investments?
Since the GFC, overseas shares have yielded better returns than our market: a 22 per cent return compared to 17 per cent over the past year.PT4M11S http://www.canberratimes.com.au/action/externalEmbeddedPlayer?id=d-3cb48 620 349 July 21, 2014
Qantas is considering a split of its domestic and international arms to attract more foreign investment as part of its wide-ranging structural review.
Less than a week after the Senate passed changes to the Qantas Sale Act in a compromise deal, sources said the airline was studying whether it should pursue a similar structure to that of rival Virgin Australia.
Qantas is due to provide an update on its structural review alongside its full-year results next month. It is also considering options such as a part sale of its frequent flyer business or Jetstar as part of the review.
Analysts said a split of the domestic and international arms, to allow greater foreign investment in Qantas' domestic business, would be a positive for the ailing carrier.
''That would take some work but we don't think it would be impossible to achieve,'' Deutsche Bank analyst Cameron McDonald said. ''I do think that [Qantas] obviously are keen to have a seat at [the global airline consolidation] table if and when it becomes appropriate.''
Virgin split the ownership of its domestic and international business in 2012 through an in-specie distribution of shares in its international division to its holders at the time.
Qantas shares are 1 per cent higher at $1.26.
Qantas is considering splitting its domestic and international businesses. Photo: Jim Rice
The Commonwealth Bank has slashed its five-year fixed mortgage rate to a new record low of 4.99 per cent, offering borrowers the chance to exploit historically low interest rates.
The country's biggest lender today said its five-year rate would fall 0.7 percentage points to 4.99 per cent, the lowest rate in the market. It is the first time the bank has cut its five-year fixed rate below 5 per cent.
“This is a great opportunity for customers to lock in an extremely competitive rate for five years,” Lyn Cobley, the bank's executive general manager of retail products and third party, said.
Banks have this year been slashing their fixed mortgage rates as a way to attract customers, and because of a fall in their funding costs.
Fixed rates are influenced by the outlook for the cash rate - which the Reserve Bank has left on hold at a record low of 2.5 per cent for almost a year.
The move comes after the bank has in recent weeks been slammed by a Senate inquiry into a fraud scandal in its financial planning arm, which occurred between 2006 and 2010.
It is the first time the Commonwealth Bank has dropped its five-year fixed rate below 5 per cent. Photo: Reuters
Pocket rocket stock (there’s a Dr Seuss book in that) LNG Ltd has received a speeding ticket from the ASX, after its shares jumped from a close of $2.28 on Friday to $2.77 today.
The shares are up another 4 per cent this morning at $2.88.
The company confirmed that it was not aware of any info outside that already disclosed to the market that could explain the move.
It did reiterate that it “continues to advance its Magnolia LNG Project at Lake Charles, Louisiana, USA, including the recent announcement on 14 July 2014 that the US Federal Energy Regulatory Commission has accepted Kinder Morgan’s filing applications.”
The company also felt compelled to mention: “This is a significant step for the Magnolia LNG Project as it sets an indicative timeline for regulatory approvals”.
Up, up and away! LNG Ltd's rapid share share price movements over recent days has attracted attention from the ASX.
Its shares may be holding around all-time highs, but that hasn't stopped Bell Potter from raising its pricing target for Challenger Financial, and flagging further steep gains.
The broker was quick off the mark in highlighting the company's prospects, and its emerging popularity for yield-hungry investors with a bullish share price target last year.
Now, it reckons the shares could be headed for $9.30, which is well ahead of the broker's existing target of $7.90.
The stock last fetched $7.85, up 0.4 per cent in early trade.
Apart from being in the right place at the right time, Bell Potter reckons a range of offerings, such as those targeting self-managed super funds, will see earnings rise smartly over the next few years.
Shares have jumped at the open, led by the miners after BHP's blockbuster production update.
The good news from the Big Australian mixed with a more upbeat tone overnight from global markets to provide a broad boost to the indices: the ASX 200 and All Ords climbed 21 points, or by 0.4 per cent, to 5564.4 and 5555, respectively.
Unsurprisingly, BHP was doing the most work after it added 1.7 per cent, while Rio gained 0.8 per cent and Fortescue 1.1 per cent.
The big banks also gained, although ANZ was broadly flat early, continuing its weak run this week.
Among the laggers were Seek, down 1.3 per cent, AGL and Coca-Cola Amatil - the last two 0.6 per cent lower.
Telstra gained 0.2 per cent.
Sims Metal Management has unveiled a new strategic five-year plan to lift EBIT by 350 per cent above FY13’s underlying result, through cost cutting and the sale of non-profitable businesses, the company said in a statement.
The company said it expects no significant restructuring charges to FY14 from the strategic review other than those previously announced on June 24, when the company foreshadowed goodwill impairments of $20m to $30m in FY14, in addition to $80m-$85m in restructuring charges.
It expects to boost EBIT by $32m through further cost reductions and exiting loss making operations. Those actions should be completed by FY16.
No significant additional restructuring activities or charges are anticipated in the Sims Recycling solutions business after FY14, the company said.
Aurizon has reported that coal output over the June quarter was 52.1m tonnes, which represents 1 per cent decline year-on-year, the company said in statement.
The final FY14 coal output of 210.4m tons is within previously advised guidance range of between 207m and 212m tonnes.
June qtr iron ore output of 7.4m tons represent 1% decrease against the previous corresponding period (pcp).
The company said contractual railings for iron ore for FY15 will decline due to the end of two contracts.
June quarter freight volumes of 10.9m tons represent a 11% decrease pcp.
Bulk volumes were down 15% due to: one customer’s supply of nickel being hit by the Indonesian embargo on nickel exports; lower than average grain harvest in Queensland; and unexpected plant shutdowns.
Global share registry business Computershare has announced a £47.5 million acquisition of Homeloan Management Ltd from a UK building society.
HML is a third party mortgage administrator, Computershare said in an announcement to the ASX.
The purchase requires regulatory approval, which is expected to take two to four months, the company said.
HML had annual revenues of £59.2 million in calendar year 2013 and the transaction is expected to be immediately add to Computershare’s earnings per share, the company said.
“However, the potential contribution to FY15 is not expected to be material to the Computershare group. Anticipated transaction synergies will be delivered progressively over the first two to three years of ownership.”
“We are delighted to be acquiring HML and extending our mortgage servicing business into the UK,” CEO Stuart Irving said in the statement.
“We are excited about both HML’s growth potential and our ability to add value to this business given the alignment with our core competencies.”
Bendigo Bank subsidiary Rural Bank and three of its senior executives have denied accusations they were complicit in an elaborate fraud allegedly used to steal a database worth as much as $100 million.
The allegations against Rural Bank, its chief executive Paul Hutchinson, general manager of marketing John Marshall and head of channel marketing Jason O'Sullivan received their first airing on Friday at a NSW Supreme Court directions hearing.
They are named as defendants in a lawsuit brought by the owner of the database, Kisimul Holdings, against a former employee, Tom Simms, who also denies the allegations.
Kisimul Holdings, which trades as KG2, alleges that Rural Bank and its executives assisted Mr Simms in his ''dishonest and fraudulent'' plan to spirit away the database.
KG2 also alleges that in June last year, Mr Marshall cut a side deal with Mr Simms ''whereby Mr Simms would pay monies into Mr Marshall's personal New Zealand bank account in exchange for certain assistance/services by Mr Marshall''.
The lawsuit comes as the Bendigo Bank moves to expand its share of the farming finance market by buying the Victorian State Government's Rural Finance Corporation, including its $1.7 billion agribusiness loan book, in a controversial deal that did not go to tender.
Bendigo has yet to file a defence and denies its executives have done anything wrong, but it has agreed it is liable if any of the claims against them are upheld.
''The claims are being vigorously defended as they are considered to be vexatious and without substance,'' a Bendigo spokesman said.
Mr Simms said: ''We plan to defend it. I don't believe the allegations are true.''
Chinese stocks rose yesterday, sending a gauge of mainland companies listed in Hong Kong to its biggest gain in four months, amid speculation the government will do more to shore up economic growth.
China Vanke and Poly Real Estate Group led gains for mainland developers after the National Business Daily said Wenzhou became the latest city to remove home-purchase restrictions.
The Hang Seng China Enterprises Index, also known as the H-share index, climbed 2.4 per cent to 10,605.22 at the close in Hong Kong.
The article on easing property restrictions follows a report from the China Business News yesterday that the government granted a 1 trillion yuan ($US161 billion) loan to China Development Bank to help fund subsidized housing. The central bank refrained from draining liquidity from money markets today, as policy makers seek to keep economic growth from slipping below their 7.5 per cent target.
“We have positive views on H shares,” Ryan Tsai, an Asia equity strategist at Standard Chartered Bank, said. “Policy easing, improving economic growth and increasing fund inflows should lead to further upside for the market.”
The Shanghai Composite Index rose 1 per cent, while the CSI 300 Index increased 1.2 per cent.
The Shanghai Composite is valued at 7.7 times 12-month projected earnings, compared with a multiple of 7.1 for the H-share index, according to data compiled by Bloomberg.
The H-share gauge has rebounded 15 per cent from this year’s low in March on signs China’s economy is stabilizing. Data last week showed growth accelerated for the first time in three quarters in the April-June period.
The Australian dollar has fallen back after enjoying a boost overnight on official figures showing the pace of US inflation slowed in June.
The local currency was last trading at 93.92 US cents, virtually unchanged from 93.93 cents on Tuesday.
The Australian dollar reached a peak of 94.24 US cents overnight after figures from the US Labour Department showed that although higher petrol prices pushed US consumer prices up in June, the pace of inflation slowed from May.
The department’s consumer price index rose 0.3 per cent last month, easing from a hefty 0.4 per cent rise in May - the largest increase since February 2013.
The US dollar temporarily lost some ground after the figures were released, giving the Australian dollar a boost, National Australia Bank senior economist David de Garis said.
‘‘But the US dollar recovered ground as stocks held onto their gains, with the Australian dollar easing back to around 93.90 to 94 US cents,’’ Mr de Garis said.
Easing tensions over Malaysia Airlines flight MH17 crash in Ukraine also boosted risk appetite, he said.
BHP Billiton has easily beaten full year export targets for its two biggest revenue spinners, as the miner continues to consider its options around simplifying its product portfolio.
Strong performances in the iron ore, coking coal and petroleum divisions were the focus this morning, as BHP declined to give any significant information about a possible demerger of non-core assets.
The iron ore division began the 2014 financial year promising to export 207 million tonnes, but has ultimately shipped 225 million tonnes.
That result means the latest export guidance of 217 million tonnes has been smashed, and even the predictions by UBS for iron ore exports of 223 million tonnes have been beaten.
The strong result was built upon a campaign of improving and de-bottlenecking the supply infrastructure, particularly around Port Hedland.
That campaign is expected to continue for some time, with BHP's iron ore boss Jimmy Wilson recently saying: ''We haven't finished squeezing the lemon on the inner harbour.''
BHP has today backed up that vow, forecasting it will export 245 million tonnes of iron ore in the 2015 financial year.
The petroleum division is BHP's second biggest earner behind iron ore, and analysts expected the division to merely meet its full-year production target of 245 million barrels of oil equivalent.
But a big rise in liquids production saw the final production result reach 246 million tonnes, delivering another guidance beat.
BHP has easily beat full-year production targets. Photo: Reuters
Local stocks are poised follow Wall St and open higher as BHP reports quarterly production update and ahead of CPI data later this morning..
Here's what you need2know:
• SPI futures up 17 points, or 0.3%, to 5512
• AUD at 93.96 US cents, 95.28 Japanese yen, 69.75 Euro cents and 55.04 British pence.
• On Wall St, S&P 500 +0.5%, Dow +0.4%, Nasdaq +0.7%
• In Europe, Euro Stoxx 50 +1.7%, FTSE +1%, CAC +1.5%, DAX +1.3%
• Spot gold fell 0.4% to $US1306.66 an ounce
• Brent oil down 0.3% to $US107.34 per barrel
• Iron ore slipped 0.6% to $US95.40 per metric tonne
What's on today:
• Australia: Consumer price index at 11:30am; skilled vacancies for June at 11am; RBA deputy governor Philip Lowe speaks at roundtable on internalisation of China's currency.
• US: Richmond Fed manufacturing index, existing home sales
Stocks to watch:
• BHP Billiton 4Q production report
• Xero AGM
• Woodside: proposed buyback of shares from Shell may not win shareholder approval: AFR
• BHP Billiton's Nickel West assets have lured a host of international suitors but the field lacks an obvious front-runner, according to the Street Talk column in the Australian Financial Review.
• RBC Capital Markets has a "sector perform" on Santos and a price target of $16 after it released its second quarter 2014 report.
• Deutsche Bank has a "hold" recommendation on Caltex Australia and a target price of $18.40 a share.