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Markets Live: Capex data cheers

Date

Patrick Commins, Jens Meyer

Shares have recovered partially from a soft start as weakness among miners was offset by encouraging data on company spending intentions.

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That’s it for Markets Live today.

You can read a wrap-up of the action on the markets here.

Thanks for reading and your comments.

See you all again tomorrow morning from 9.

Shares edged modestly lower despite Commonwealth Bank of Australia hitting a record high on further evidence of a hot property market, and official data showed increased business investment intentions outside the mining sector.

The benchmark S&P/ASX 200 Index shed 7.7 points, or 0.1 per cent, on Thursday to 5519.5, while the broader All Ordinaries Index also lost 0.1 per cent to 5499.2, as mining stocks pulled the index down after yet another fall in the iron ore price to a 2014 low.

Local shares followed Wall Street lower at the start of trade, while Asian markets were subdued in the afternoon.

When the Australian session closed the Nikkei was up less than 0.1 per cent following a worse-than-estimated drop in Japan's latest retail sales data.

Australian Bureau of Statistics data showed a sharper than expected slump in capital expenditure over the first three months of 2014. However, more importantly capital expenditure intentions for the year to June 2015 were stronger than economists had predicted, buoying the market.

"Not only was the capex report better than forecast but it showed encouraging evidence of a transition in the economy to the non-mining sector," Nomura interest rates strategist Martin Whetton said.

The spot price for iron ore, landed in China, fell 1.3 per cent to a 2014 low of $US96.80 a tonne. The commodity price for Australia's biggest export has lost 28 per cent year-to-date.

Resources giant BHP Billiton fell 1.3 per cent to $37.49. Main rival Rio Tinto lost 2.2 per cent to $60.07 as it announced plans to downsize operations at its Mongolian joint venture Oyu Tolgio copper and gold mine. Iron ore miner Fortescue Metals Group shed 3 per cent to $4.54 as chief executive Nev Power told investors the company would consider expanding into the oil and gas sector.

Read more.

The Australian dollar jumped to its highest in more than a week on Thursday, buoyed by an encouraging outlook for business investment.

The currency rose more than half a cent to as high as US93.02¢ in the wake of the first-quarter capital expenditure numbers released by the Australian Bureau of Statistics. The currency was fetching US92.88¢ in late trade.

The figures showed that capex fell by 4.2 per cent in the March quarter, contributed to by an 8.7 per cent reduction in mining investment. However, the ABS also published estimates for 2014-15 and these were revised up substantially from the previous quarter.

Now, capex in the coming financial year is expected to reach $137 billion, up 9.3 per cent from an initial estimate of $125 billion, with mining investment not predicted to drop as much as initially feared, and investment in services picking up.

Commonwealth Bank capital markets economist Gareth Aird said the data was "definitely a good set of numbers", as it showed an improvement of capex in the non-mining economy.

"It certainly got a reasonable bump up," said Joe Capurso, a currency strategist with the Commonwealth Bank, who predicted the dollar would move towards the 93-cent mark, supported by European trade.

"The Aussie dollar will be at 93c by the end of the week, if not tonight. In our view it will be high 90s by the end of the year."

Read more.

The Westfield Retail Trust vote has officially been deferred, with another meeting to be held in the next 10 to 14 days, according to the chairman.

Increasing stockpiles in China have continued to weigh on the iron ore spot price, with the bulk metals hitting a 2014 low.

But some analysts are predicting a relief rally in the near future.

Overnight on Wednesday, the benchmark iron ore spot price, measured at the Tiajin port in China, slipped 1.3 per cent to $US96.80 per tonne.

The falls are expected to continue overnight, with the Dalian iron ore futures in China slipping 1.4 per cent on Wednesday afternoon.

Despite a more than 28 per cent fall in 2014, taking the price of iron ore to its lowest level since September 2012, the price is still more than $US10 off the low of $US86.90 hit at that time.

The majority of analysts are not predicting the price to plunge down to those levels in the near-term, with most forecasting a slight recovery in the second half of this calendar year.

"We will see a relief rally in the coming month, in June-July," ANZ head of commodities Mark Pervan said.

"Markets should see both steel and iron ore prices rebound off an oversold base. The point we're seeing now is probably not indicative of current market conditions," Mr Pervan said.

Iron ore has faced a number of headwinds in 2014, with supply increasing despite a slowdown in China's property sector, the country's largest consumer of iron ore.

Read more.

Fortescue is having to offer steeper discounts on its iron ore as demand from Chinese steel mills falls.

Fortescue is having to offer steeper discounts on its iron ore as demand from Chinese steel mills falls. Photo: Reuters

The people have spoken, with 82.5 per cent of votes from the floor wanting an adjournment. The Westfield Retail Trust board is now debating whether to adopt what was a non-binding resolution.

Meanwhile, the man who caused all the fuss, BT’s Peter Davidson, has told Business Day’s Carolyn Cummins that even while the costs associated with an adjournment would be regrettable, “given the position that Westfield adopted this morning that Scentre would be spun out irrespective of a merger with WRT, we’d argued that’s a material change and shareholders need to consider it”.  

And here are the best and worst stocks for the day.

 

 

Best and worst performing stocks in the ASX 200 today.

Best and worst performing stocks in the ASX 200 today.

The dollar has jumped above 93 US cents for the first time since early last week, as European traders come online and digest the upwardly revised business investment intentions (capex).

The Aussie's currently fetching 92.88 US cents, after hitting 93.02 US cents a couple of minutes ago.

<p>

Some strong economic data gave the market a shot in the arm after a weak start, but it wasn't enough to stop a slight backslide at the close of trading.

The ASX 200 and All Ords slipped 8 points to 5519.5 and 5499.2, respectively.

Miners led the falls after iron ore fell overnight and futures trading during the day suggested a further drop tonight.

BHP dropped 1.3 per cent, Rio 2.2 per cent and Fortescue 3 per cent.

Banks were mixed, either recording slight gains or losses, and there were more stocks down then up today.

Toll Holdings jumped 4.9 per cent on a restructure, while Wesfarmers gained 0.6 per cent after announcing plans to expand overseas.

Telstra was the biggest boost to the market, up 0.8 per cent.

The latest from the Westfield drama: Dick Warburton’s team has emerged from the dressing sheds and, after a bit of debate on both sides, has agreed to put an adjournment motion it to the floor.

We’re told the punters are now lining up to register for the electronic handheld devices that will be used to vote on whether there should be a vote.

This has not pleased some of the older shareholders present, and has also brought into focus an important side issue for a significant bloc of WRT shareholders – the distinct lack of a decent cup of tea at the event.

The top and bottom 10 stocks according to the analysts.

The top and bottom 10 stocks according to the analysts.

Nine Entertainment Network is the stock most loved by the broker analysts, while its competitor Ten Network is the least popular, according to a survey of broker ratings using Bloomberg data.

The table below has the top 10 rated stocks according to consensus analyst ratings, using a numerical chart where a score of 5 is a unanimous strong buy, 3 a hold, and 1 a strong sell.

Of course, the recommendations need to be taken with a grain of salt. For one, they are usually on a 12-month horizon. Second, some make their valuations on a relative expected return (against the benchmark or other stocks within the industry). And three, making a decision based on somebody else's research can be a risky business!

More drama at the Westfield Retail Trust vote this afternoon.

An adjournment has been called after BT fund manager Peter Davidson called for a time-out in the light of chairman Frank Lowy’s statement this morning that he would push ahead with a split even if it was voted down.

This was material new information that needed to be considered, Davidson said.

Chairman Dick Warburton subsequently called a halt to talk it over with the independent directors.

No doubt there’s more to come on this.

Fortescue Metals Group said it will consider a push into the West Australian gas market, as it urged the federal government to force oil and gas companies to develop or relinquish their leases.

Chief executive Nev Power said that while there were many companies better equipped to develop new gas fields for domestic use, if they did not develop the fields, Fortescue would consider it.

“We still believe that provided there is the opportunity to develop it there will be plenty of companies lining up to develop it. Only if there was nobody else [would Fortescue develop the fields],” Mr Power told reporters in Perth today.

He was releasing a Deloitte Access Economics report that found WA’s gas reservation policy should be abandoned in favour of a free market forced to develop retention leases or lose them.

The report argues there are commercially viable reserves that could supply the WA domestic gas market but are not being developed because WA government’s gas reservation policy links LNG exports with domestic gas industries, leaving domestic gas contracts to be priced at LNG netback prices.

By abandoning the reservation policy and applying more “rigorous” assessments of retention leases gas fields better suited to domestic supplies would be developed, the report argues.

Fortescue is one of WA’s biggest energy consumers, spending $US800 million a year. If it converted it’s entire energy use to gas, it would represent between 8 per cent to 10 per cent of the local market.

Read more ($).

Here's the latest from the Westfield split AGM: As the meeting of Westfield Retail Trust begins, chairman Dick Warburton has said 74.1 per cent of proxy votes were in favour of the huge Westfield restructure.

With the proposal requiring a 75 per cent ''yes vote'' to go ahead,  votes in favour from the floor are needed to green-light the deal.

Regional markets are mixed:

  • Japan (Nikkei): +0.05%
  • Hong Kong: +0.4%
  • Shanghai: flat
  • Taiwan: -0.1%
  • Korea: -0.3%
  • ASX200: -0.2%
  • Singapore: +0.9%
  • New Zealand: flat

‘‘Investors are more positive on equities as bond yields drop on expectations the European Central Bank will do something big next week,’’ said Mark Matthews, Singapore-based head of Asia research for Julius Baer. ‘‘Valuations in Asia look attractive, with those for Chinese equities incredibly low. Japan has become pretty cheap, too.’’

The Australian dollar has risen about half a cent to the day's of 92.87 US cents on the back of the strong capex figures - but it's interesting that financial markets are now betting on a rate cut over the next 12 months.

At just 4 per cent it's a slim chance, admittedly, but it's the first time since early March that even a few basis points of a rise are priced in. And it's well below the 80 per cent-plus chance of a rate hike seen in April, according to Credit Suisse data.

Even though markets are now seeing a small chance of a rate cut over the next 12 months (white line), the dollar rose on the capex figures.

Even though markets are now seeing a small chance of a rate cut over the next 12 months (white line), the dollar rose on the capex figures.

Veteran programmer John Stephens says the Seven Network did not induce him to breach a contract with Ten and his decision to walk away from the deal was primarily due to the enormity of the task that lay ahead of him at the struggling network.

Mr Stephens defected to Ten from Seven in March, only to backflip on the deal days later and remain with Seven. Ten sued Seven, alleging it induced Mr Stephens to breach the contract and sought to stop him working with its rival free-to-air broadcaster for two years.

The Supreme Court of NSW ruled on Thursday that the contract that Stephens signed with Ten remains active, but did not grant Ten injunctive relief to stop him working at rival Seven.

Mr Stephens told Fairfax Media on Thursday that Ten's fortunes appeared bleak after its coverage of the Sochi Winter Olympic Games concluded and that,at 67 years old and after a hip replacement, he feared the task was too great.

"In essence I took into account my age, the fact that Ten looked like they were about to hit a pretty tough period after the Winter Olympics," he said

"Over that weekend when I did change my mind I thought to myself: 'Do I really need this at my age?' I've been through enough stress and pressure over the years, working for Network Ten 25, 30-odd years ago and I worked for Nine and Kerry Packer all those years... they were stressful enough."

Mr Stephens said Seven did not induce him to breach the contract with Ten.

Read more.

Despite being accused by the competition regulator of abusing its power over suppliers, Coles is vowing to cut more costs out of its business and drive supermarket prices further down to underpin another five years of profit growth.

The company’s incoming managing director, John Durkan, outlined ambitious plans to transform Australia’s second-largest food and liquor chain into one of the world’s leading retailers in a speech to investors yesterday.

A veteran of the cut-throat British grocery market, Irish-born Mr Durkan said the Wesfarmers-owned Coles, had improved a lot over the past six years but was lagging grocery chains ­overseas in sales per meter of floor space, freshness, supply chain efficiency and the cost of doing business.

“We can move the dial quite considerably and on some of those things we can be world leaders,” he said in a defiant speech to investors.

But even though Mr Durkan’s stance may upset some suppliers, he conceded that some global retailers have reduced costs too far.

“I’m not suggesting we have to get to best practice on all of those,” he said.

“On some measures, some people around the world have gone too far, particularly driving costs down. But it demonstrates the fact we have a lot of opportunities still.”

Known for his uncompromising stance with recalcitrant suppliers and his unrelenting focus on costs, Mr Durkan’s position has been under a cloud since early May.

Three weeks ago the ACCC launched legal action, alleging that Coles engaged in unconscionable conduct by using unfair tactics and misleading information to force smaller suppliers to pay additional rebates to cover the cost of a new supply chain program.

Read more ($).

In response to a reader request, here's a 3-year chart comparing iron ore stockpiles with the price (we ran a 1-year chart earlier).

Eyeballing it, no evidence of seasonality in stockpiles.

Iron ore stockpiles at Chinese ports (white line) against the commodity's price (yellow line)  over three years.

Iron ore stockpiles at Chinese ports (white line) against the commodity's price (yellow line) over three years.

ABS capex numbers.

ABS capex numbers.

Finally, there are signs of life in investment outside Australian mining, writes JP Morgan economist Stephen Walters, describing the ABS private capex numbers released this morning as “on balance, better than expected”.

Actual spending over the March quarter was weaker than expected, but companies have indicated that spending will fall by less than previously estimated over the year to June 2015, “as the economy slides further down the face of the mining capex cliff”.

“Even better, though,” Walters writes, “there was an upside surprise in reported spending intensions by firms outside mining and manufacturing, previously the missing piece of the ‘growth rotation’ narrative.”

“Indeed, RBA officials consistently have communicated that this rotation in investment in the wake of the peak in the mining capex boom was on track.

“Now, they have decent evidence to support their contention, which had for a while sounded more hopeful than emphatic.

“To be fair, the RBA’s statement earlier this month described the signs of improvement in investment outside mining as ‘tentative’, but the indications from today’s report are much better than tentative.”

Scrub out that small chance of a rate cut?

Asian stocks swung between gains and losses as investors weighed a worse-than-estimated drop in Japan’s retail sales before a report that’s expected to show the US economy contracted last quarter.

The MSCI Asia Pacific Index is up 0.5 per cent, reversing an earlier loss of 0.2 per cent. The gauge is headed for its biggest monthly increase since September, amid optimism the US economy can withstand a reduction in stimulus and that Chinese policy makers will step in to bolster slowing growth.

The value of global equities climbed to a record $US63.8 trillion this week and the Standard & Poor’s 500 Index reached an all-time high.

Investors “should not read too much into [Japan's] April retail sales numbers,” Vasu Menon, vice president of wealth management in Singapore at Overseas-Chinese Banking said. “It turned out to be worse than expected. As we progress into the second quarter and third quarter, some of the negative impact from the Japanese sales-tax hike will wear off.”

Around the region:

  • Japan’s Topix index is marginally ahead as the nation’s retail sales fell 13.7 per cent in April from March, the most in at least 14 years after the first consumption-tax increase since 1997 depressed consumer spending. The drop was worse than a forecast 11.7 per cent decline by analysts in a Bloomberg survey.
  • China’s Shanghai Composite Index has dropped 0.1 per cent, while Hong Kong’s Hang Seng Index has gained 0.4 per cent.
  • South Korea’s Kospi index is down 0.1 per cent. The nation’s current account surplus narrowed to $US7.12 billion in April from a revised $US7.29 billion in March, data released by the Bank of Korea today showed.
  • Singapore’s Straits Times Index is 0.8 per cent higher, heading for its highest close in a year. Morgan Stanley raised its rating on Singapore shares to overweight from equal-weight, citing stabilizing economic growth and limited earnings risks, analysts wrote in a report to clients.

As Woodside shares trade around their highest for almost three years, the stock is increasingly attracting the bears thanks to market worries about a lack of near-term growth, the temptation of an acquisition and expected tougher competition in gas supply to Asia.

Bernstein Research today become the fourth broking house to downgrade its recommendation on Woodside Petroleum stock since last Thursday’s investor briefing, citing a “chilly Siberian wind” that is blowing through the Pacific gas market thanks to last week’s mega-deal on gas supply between Russia and China.

Bernstein’s downgrade to market-perform, follows similar downgrades to neutral by Citigroup and JPMorgan, while Goldman Sachs has cut its call to sell, all in the last few days.

Woodside last week abandoned its proposed $US2.5 billion investment in the Leviathan gas field in Israel, saying the deal was no longer attractive, given the risks. The decision reassured investors about management discipline in capital spending decisions, and also inflated investor expectations of another capital return.

“While we applaud Woodside’s decision to walk away from Leviathan, we think it is likely that they will look for something else to fill the ‘growth gap’, Bernstein’s Neil Beveridge said. “Increasingly we expect management will want to grow rather than return cash to shareholders, which means an acquisition at some point, which is likely to be value negative for investors.”

Goldman Sachs analyst Mark Wiseman describes Woodside’s reducing reserve life as “a concern” and says it “has the potential to drive a more significant de-rating if not successfully addressed.”

He sees peak production for Woodside occurring this year from existing assets, with declines then due to maturing oil fields in WA and lower deliveries of gas within the state.

Citigroup analyst Dale Koenders still gives a tick of approval to Woodside’s delivery on its strategy and capital discipline, but prefers the upside potential in Santos and Origin Energy.

Shares are down 0.2 per cent at $42.04.

Funtastic shares have entered a halt until Monday at the latest pending the release of a “trading update”.

 

The latest from the fairly turbulent Westfield AGM, courtesy of Carolyn Cummins: the proxies for the vote for Westfield Holdings to demerge from Westfield Retail Trust was 97.84 per cent for and against 2.16 per cent.

That's the Westfield group approving it. The big one is the next vote after 2pm when Westfield Retail Trust shareholders vote on their part of the demerger deal.

The consequences of them not approving will be that Westfield Group pursues its other options including a decoupling of its business from WRT.

At the Westfield Group meeting shareholders put Frank Lowy through the ringer with Stephen Mayne from the Australian Shareholders Association at one stage calling him "oppressive".

Lowy responded, "I object personally to these character assassinations."

"Aren't you tired Mr Mayne, because I'm getting a little tired," Lowy said following Mayne's interjections.

During the meeting Lowy's re-election as director was overwhelmingly approved by more than 90 per cent shareholders. Shareholders also overwhelming approved the remuneration report.

Proposed split: Frank Lowy.

Proposed split: Frank Lowy. Photo: Nic Walker

Suncorp's leadership team wants to focus investors on the benefits of innovative technology in its business, as they digest Tuesday's news of its $500 million write-down.

The Queensland-based insurance and banking group is hosting an investor day in Sydney in which it is highlighting expected gains to be made in terms of productivity, savings and customer service from ongoing investment in technology, which it hopes will appeal to investors concerned by current difficulties.

Chief executive officer Patrick Snowball highlighted expected savings of $225 million in the 2015 financial year and $265 million in 2016 from an ongoing simplification program. This will include rationalising remaining legacy technology systems, and will be complimented by the implementation of a new banking platform known as Ignite and move to a more advanced cloud computing solution it is calling multi-cloud.

Mr Snowball said the simplification plans would be largely completed in 2015 with major programs continuing through 2016 including the new banking platform, a real estate consolidation plan, finance reporting systems optimisation, procurement simplification and a newly commenced business intelligence project.

He said the new business intelligence unit was formed by bringing together a team of 850 data analysts, modellers and technology specialists under Suncorp Business Services CEO Jeff Smith.

Mr Smith said Suncorp had adopted working methods borrowed from Silicon Valley players to develop new systems and services, and sought to highlight benefits derived from a so-called "smart workplace" where workers from across offices communicate virtually via large LCD screens.

Read more.

Capital expenditure figures from the ABS are out and private capex dropped 4.2 per cent over the March quarter, well below the consensus forecast of a 1.6 per cent fall.

But while the headline numbers look horrible, early chatter is the data is actually strong - there are a number of components as ever - and the Aussie dollar has gone up.

The good news is that the second estimate for private capex in the next financial year has been revised up to $137bn from $125bn in the first estimate.

"In our view, today’s CAPEX release does not materially change our outlook for monetary policy," write the ANZ economics team.

"The decline in mining investment has been well flagged and is broadly in line with RBA expectations and will act as a drag on economic activity going forward.

"Meanwhile, non-mining investment intentions continue to point to only a very gradual increase in non-mining investment, which continues to support our view that the RBA is likely to keep rates on hold for an extended period of time."

Read more.

Apple has agreed to buy Beats Electronics for $US3 billion ($3.25 billion), its biggest-ever acquisition, nabbing a popular line of headphones and a nascent subscription music-streaming service as the iPhone maker seeks to rev up growth.

Beats founders Dr Dre and music-industry executive Jimmy Iovine will join Apple. The purchase price is $US2.6 billion, with another $US400 million that will vest over time. The acquisition is projected to close in the fiscal fourth quarter.

The deal signifies that Apple chief executive Tim Cook is willing to use the company's $US150.6 billion in cash more aggressively, a departure from predecessor Steve Jobs' playbook of acquiring smaller companies to bring in technology and talent.

As sales of digital media downloads fall, buying Beats gives Apple a foothold in internet-based streaming, where Google's YouTube, Spotify and Pandora dominate.

"Music is such an important part of all of our lives and holds a special place within our hearts at Apple," Cook said.

The deal indicates how the CEO, who is facing pressure to jump-start Apple's sales amid cooling iPhone and iPad sales, is shifting to acquire growth. Even as Google and Facebook have spent billions on acquisitions, Apple previously avoided tie-ups of this size.

Its biggest past purchase was the $US400 million deal for NeXT in 1997, which brought Jobs back to Apple.

Read more.

Not so different: Apple and Beats Electronics.

Not so different: Apple and Beats Electronics. Photo: AP

ASX chief executive Elmer Funke Kupper has played down the threat of high frequency trading in Australia and called again for the government to review its 15 per cent ownership restrictions on the local bourse.

Speaking at a stockbrokers' conference in Melbourne, Funke Kupper said while Michael Lewis' new book, Flash Boys, was "all true", high frequency trading did not exist in Australia "on the same scale or with the same impact" as it does in the United States.

"In Australia, our regulators have made sure that the interests of end investors are prioritised," Funke Kupper said.  "The aggressive strategies prevalent overseas are uneconomic under Australia’s regime.

"Here, the behaviour of HFT is more aligned with the broader market. And as a result, we
have few concerns at the moment.

Funke Kupper's comments echo those by the corporate regulator, the Australian Securities and Investments Commission, earlier this month, which said the situation in Australia did not match the "hype" following the release of the book.

Funke Kupper said restrictions around on maker-taker pricing, regulatory fees and tick sizes helped keep the problem at bay in Australia.

"The regulatory settings and the market structure in Australia are materially different than in the United States.": ASX chief Elmer Funke Kupper.

"The regulatory settings and the market structure in Australia are materially different than in the United States.": ASX chief Elmer Funke Kupper. Photo: Dean Sewell

More positive data from the housing sector, where record low interest rates appear to be driving the recovery the economy needs to fill the hole left by falling mining expenditure.

The HIA reports that new home sales – a positive indicator for broader economic activity – have grown for the fourth consecutive month.

Private sector new home sales gained 2.9 per cent to be up by 6 per cent over the

three months to April this year.

Multi-unit sales increased by 9.3 per cent in April, while detached house sales grew 1.8 per cent rise, marking the sixth consecutive increase for this component.

“The recovery in new home building is a key plank in Australia’s economic growth, as evidenced by the March quarter construction work done figures released yesterday,” said HIA Chief Economist, Harley Dale in a statement.

“A healthy April for new home sales provides a promising start to the June 2014 quarter.” 

New home sales rose for the fourth month in a row. Source: HIA.

New home sales rose for the fourth month in a row. Source: HIA.

CIMB analyst Daniel Blair says he came away from Nine Entertainment Co’s inaugural investor day with “reinforced” confidence in the media company’s digital and events businesses, as well as “improved” confidence in its free-to-air television network.

Nine had set itself a hefty target of taking 40 per cent of the metropolitan free-to-air advertising market by 2015 but, until yesterday’s investor briefing, had given little detail to the investment community about how it would get there.

The network won over many analysts and fund managers after showing its improvement in the Perth and Adelaide markets, where it bought TV stations last year.

Blair said the briefing helped boost his confidence that Nine could reach the magical 40 per cent mark.

Rival Seven West Media secured a 40.1 per cent revenue share last year, although with Ten Network Holdings in the doldrums and slipping below a 20 per cent share in April, it is not inconceivable that both Nine and Seven could take 40 per cent each in 2015.

Eight of the nine brokers, including CIMB, have some version of a "buy" on the stock, with an average target price of $2.58. The stock last traded hands at $2.19.

Australia has more than iron ore to offer, and Andrew Forrest is diversifying: China is so desperate for good beef that Twiggy will be taking sample parcels of steak in his luggage on his next trip.

After recently visiting Chinese supermarkets and seeing limited Australian beef available, Forrest returned home and developed a plan, including buying his own processing company, to boost shipments of the meat from Australia, the third-largest exporter.

“In China, I am being asked, ‘Andrew where can I get high quality reliable beef',” the Fortescue Metals founder said. When he goes back next month, “I am going to take it in and give everyone a pack,” he said.

Forrest, who bought Western Australia’s only licensed beef exporter to China this year, said Australia could boost its production by 50 per cent should it secure a supply position in the Chinese market. China, already the biggest consumer of meat, might double beef imports by 2018 as rising wealth changes diets, Rabobank estimates.

“I see longer term, higher sustained prices,” driven by steady demand from China, Forrest said. He was considering buying more farms or companies to help boost output, he said.

Read more

Move over iron ore, China's appetite for Aussie steaks is growing.

Move over iron ore, China's appetite for Aussie steaks is growing. Photo: Eddie Jim

With the federal budget, the government may have over-delivered on the ‘sharing the pain’ message, possibly delaying the economic recovery, Morgan Stanley notes:

  • The budget didn’t tighten fiscal policy much in the near term (about 0.1 percentage point in 2014-15), but we believe the combination of broken promises about ‘negative surprises’ and the breadth of reform fronts opened without notice has had a deeper impact on spirits.
  • Consumer sentiment fell by 7 per cent in May, while the diffusion index of expected family finances hit an all-time low (post-1975).
  • Auction clearance rates have moderated, and national dwelling prices have fallen by 1.7 per cent month to date, with Melbourne down 3.0 per cent.
  • However, with the East Coast Recovery carrying more momentum than hoped into 1Q14, we believe any set-back will delay, but not de-rail Australia’s growth transition.
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A picture says a thousand words: iron ore's slide in 2014 has been largely been because of a flood of supply.

In the second quarter, BHP Billiton, Rio Tinto and Fortescue added an extra 9 million tonnes of the bulk metal to the market.

Chinese steel prices have fallen to record low, with many producers complaining they cannot sell their inventories, and US producers bemoaning the entry of China's product into their domestic market.

So, with a flood of supply in iron ore and a lack of demand for steel, it should come as no surprise that port inventories of iron ore are at record levels.

Iron ore stockpiles at Chinese ports are at record highs.

Iron ore stockpiles at Chinese ports are at record highs.

The Westfield AGM has kicked off, and the electronic voting system works.

The test question was: ‘NSW will win the Rugby League’s State of Origin series: for or against?’ After a few laughs, the result was made public: 98.2 per cent of attendees believe NSW will indeed with the State of Origin, 1.8 per cent do not.

Shareholders will vote on a controversial restructure of both groups. The proposal is to merge the Australasian businesses of Westfield Group and Westfield Retail and re-brand them as Scentre Group.

Westfield chairman Frank Lowy will tell investors that 98 per cent of WDC securityholders who have voted by proxy are in favour of the restructure. However, he notes is is still tough to predict a result.

Shares have opened a little lower, dragged down by miners and with banks also easing.

The ASX 200 is 12 points, or 0.2 per cent, lower at 5515.3, while the All Ords has fallen 10 points to 5496.5.

BHP is down 1.5 per cent and Rio Tinto 2 per cent, while Fortescue has retreated 2.2 pert cent on weaker iron ore prices overnight.

All the major banks have retreated slightly.

Toll Holdings is 1.4 per cent higher after announcing restructuring plans.

Another big investor has decided to reduce its exposure to fossil fuels, with AMP Capital announcing that its ‘‘responsible’’ funds would have limited scope to invest in certain mining and energy companies.

The changes will see 56 companies ruled out of bounds for the funds, and see the affected industries grouped with pornographers, weapons manufacturers, gaming companies, uranium miners, and producers of alcohol and tobacco.

In a move that follows bans by several church funds and banks in northern Europe, AMP said the changes were in response to ‘‘growing interest and concern’’ about climate change from investors.

Funds operated by AMP for ‘‘Responsible Investment Leaders’’ will no longer invest in companies that derive more than 20 per cent of their earnings from thermal coal, coal-fired power generation, oil sands and the conversion of coal to liquid fuels.

The 20 per cent limit means two of Australia’s biggest coal miners, BHP Billiton and Rio Tinto, could still be included in the fund because their biggest exposures lie in other commodities.

A spokesman for the Minerals Council of Australia said the decision would not hurt local coal miners, who are already battling chronically low commodity prices.

‘‘This decision, involving a boutique investment fund, is of no real consequence to the coal sector,’’ he said.

Read more

Ahead of the Italian elections, investors had started to remove money from Italian bond funds in the sort of volumes not seen since late 2012, pushing up yields on the country’s government bonds.

When Matteo Renzi and his Democratic party won a landslide victory the yields, which move inversely to prices, started to fall once again.

This sudden volatility in Italy’s benchmark government bond yields has encapsulated growing market nervousness that borrowing costs across countries hit hardest by the eurozone crisis may have fallen too far for comfort, and has prompted questions about the relative stability of the markets.

For the group of heavily indebted countries at the “periphery” of Europe enjoying strong demand for new debt sales and falling borrowing costs, the danger is these questions could lead investors to demand higher returns for the risks they perceive. That would leave Italy, Portugal, Ireland, Greece and Spain paying more to service their debts.

“Until now the market for peripheral bonds has been largely moving one way and yields had been falling,” says Laurence Mutkin, head of global rates strategy at BNP Paribas. “Now we have evidence that the market can be two-way and so investors will demand a higher risk premium.”

Read more at the FT.

Toll Holdings has announced that long-serving directors Paul Ebsworth and Wayne Hunt will leave as part of a divisional restructure that is expected to generate savings of $10 million to $12 million a year.

The company will from July 1 cut the number of divisions to five from six, it said in a statement to the ASX this morning.

Toll Express, Toll NQX and Toll Linehaul & Fleet Services will be rolled into Toll Domestic Forwarding division, Toll Liquids and Toll Transitions will become part of Toll Global Resources, the specialised contract-driven parts of Toll Intermodal will merge into the Toll Global Logistics and the Queensland freight forwarding operations will join Toll NQX.

“We have strong businesses, particularly in Australia, but it is critical that in the current challenging market we reduce complexity and costs, improve our productivity and build on our strengths,” Toll managing director Brian Kruger said.

“This restructure will help mitigate near-term ongoing margin pressures as well as ensuring that we maximise the leverage that our company has to any improvements in the external environment.

Westfield Group and Westfield Retail Trust have entered trading halts as they begin AGMs in Sydney with a vote on whether to split Westfield.

Here's a story apparently getting some attention on trading floors today:

Britain needs to start raising interest rates sooner rather than later if it wants to avoid sharp and painful increases in the future, a member of the Bank of England’s rate-setting committee has warned.

In an interview with the Financial Times, Martin Weale, an external member of the BoE’s Monetary Policy Committee, said he thought even a “gradual” rise in interest rates could see borrowing costs rise by up to one percentage point a year – faster than markets are expecting.

Mr Weale said his definition of a “gradual” rate rise would involve the bank tightening by “no more than” 25 basis points a quarter, while investors are betting on an increase of about 1.8 percentage points over three years.

The central bank has repeatedly said rate rises will be “gradual and limited” when the economy becomes strong enough to make them necessary. But Mr Weale warned that if the MPC wanted the pace to be gradual it should not wait too long before making a start.

“If you want to have baby steps you do have to start sooner,” he said in an interview with the Financial Times. “The question is: how close are we getting to ‘soon’? Of course we can never be sure, but the economy . . . has sustained fairly rapid growth in demand.”

“So I’m having to ask the question – and the answer is less definite than it was six months ago – ‘where do I think the interest rate should be at the moment?’”

Read more at the FT.

Sundance Energy Australia an explorer that’s expanding in the Eagle Ford shale formation of Texas, will look at acquisitions of as much as $200 million as some competitors focus on drilling over deals.

Sundance plans to add more acreage in the Eagle Ford through leases, small purchases and potentially larger acquisitions, Managing Director Eric McCrady said.

The company may purchase as much as 25 percent of the more than 50,000 acres it’s evaluating, he said.

“A lot of companies are running a lot of rigs in the Eagle Ford, and people are very focused on drilling the acreage positions they have,” McCrady said. “So that has resulted in a little less competition for smaller deals.”

Sundance’s purchase earlier this week of Eagle Ford assets for an initial $33 million boosts its holdings in the region to 19,500 net acres. It follows Baytex Energy’s $1.9 billion offer for Aurora Oil & Gas to add output in the formation, a focus of the U.S. shale revolution.

“The corporate activity in the Eagle Ford lately highlights the potential there,” Krista Walter, an energy analyst at Morgans Financial said.

With one of its previous acquisitions in the region, Sundance “has done well in reducing costs and increasing efficiencies, so we’d think they could apply the same efficiencies into any new acreage,” she said.

Sundance rose 1.4 percent yesterday to $1.06, reversing a decline earlier today and valuing the company at A$581 million.

Rio Tinto is cutting jobs at its troubled Mongolian copper and gold mine Oyu Tolgoi, citing deteriorating industry conditions and ongoing market volatility. 

An internal email to all staff from Oyu Tolgoi president Craig Kinnell says that after an internal cost cutting review the company is “removing a number of roles to better meet the requirements of the business”.

“Workforce reductions are part of the lifecycle of a mining business,” Kinnell wrote. “Given where we are in the lifecycle of our project, and the urgent need to reduce our costs, it is critical to the success of the business to address this now.”

Oyu Tolgoi was in a state of transition as it moved to steady state operations, and the business had to become “agile enough to face tough market conditions” he said.

Oyu Tolgoi is understood to employ about 7000 staff. Rio controls the Oyu Tolgoi project through a 66 per cent stake held by its subsidiary Turquoise Hill Resources subsidiary. The Mongolian government owns the other 34 per cent. The project has been plagued by delays.

US stocks fell, after a four-day rally lifted the Standard & Poor’s 500 Index to a record, as losses among retailers overshadowed gains in phone shares and utilities before a report tomorrow that may show the economy contracted in the first quarter.

Toll Brothers, the largest US luxury-home builder, gained 2.1 per cent after reporting that profit more than doubled.

Twitter jumped 11 per cent, the biggest increase in a month, after Nomura Holdings raised its recommendation on the stock.

The S&P 500 dropped 0.1 per cent to 1,909.78. The Dow Jones Industrial Average retreated 42.32 points, or 0.3 per cent, to 16,633.18.

“After hitting a high, the market is taking a little bit of a breather,” Michelle Clayman, chief investment officer at New Amsterdam Partners in New York. “The fundamentals of the US market still look decent.”

The equities gauge is trading at 16.2 times the projected earnings of its members, compared with a five-year average of 14.3, according to data compiled by Bloomberg News.

A report by the Commerce Department tomorrow may show the US economy contracted 0.5 per cent in the first quarter, following a preliminary estimate of 0.1 per cent annualized growth, according to economists surveyed by Bloomberg News. GDP rose at a 2.6 per cent annualized pace in the previous period. Economists forecast growth of 3.5 per cent during the second quarter.

“People are focusing on the GDP number tomorrow,” John Traynor, chief investment officer of People’s United Bank Wealth Management said.

“There are two camps of investors. They seem to fall down on the side of, ‘Is the economy at a point where it reaches a self-sustaining path?’”

Low volatility and interest rates that are holding in tight ranges have resulted in an “abnormal” trading market, Goldman Sachs president Gary Cohn said. The Chicago Board Options Exchange Volatility Index (VIX) climbed 1.5 percent to 11.68 today. It is about 3 points from a record low.

The price of iron ore has dropped to a fresh 2014 low and could drag the Australian dollar with it on concerns that global stockpiles are growing as demand for the steel making commodity eases.

Iron ore fell to $US96.80 a tonne overnight, the lowest since September 2012 after breaking below the $US100 ($108) a ton mark earlier this month.

The decline in ore is running into its eighth day and is down 28 per cent this year.

By contrast, the Australian dollar is down about 0.43 per cent since the start of this month to US92.33¢ from US92.74¢.

The day that iron ore broke below the $US100-a-tonne mark, the local currency also hit a three-week low.

But the dollar, which is often labelled as the commodity currency because Australia is such a huge exporter of metals, is higher than where it started this year at US86¢.

Citigroup, considered the world's biggest foreign exchange trading firm, is predicting a return to parity for the Australian dollar in the short term as Chinese policy makers look to increase their reserve holdings of the local currency.

Global supplies of iron ore are set to exceed demand by 175 million metric tons next year as exports from Australia and Brazil increase, Goldman Sachs Group predicts, Bloomberg reported.

Steel producers are reportedly hesitant to buy new iron ore given stockpiles at Chinese ports climbed 0.7 per cent to a record 113.30 million tons in the week to May 23 from a week earlier, according to Shanghai Steelhome Information Technology Co.

Read more.

The price of iron ore is down 28 per cent this year.

The price of iron ore is down 28 per cent this year. Photo: Michele Mossop

Local stocks are poised for a weak start after a day of consolidation on Wall Street, while iron ore fell.

Here's what you need2know:

  • SPI futures down 13 points to 5524
  • AUD at 92.33 US cents, 94.07 Japanese yen, 67.95 Euro cents and 55.27 British pence
  • On Wall St, S&P 500 -0.1%, Dow -0.3%, Nasdaq -0.3%
  • In Europe, Euro Stoxx 50 +0.1%, FTSE +0.1%, CAC flat, DAX flat
  • Iron ore falls 1.3% to $US96.80 per metric tonne
  • Spot gold slips 0.5% to $US1259.14 an ounce
  • Brent oil down 0,1% to $US109.88 per barrel

 

What's on today:

  • Australia: ABS private capital expenditure data at 11:30am; HIA new home sales for April
  • US: Annualised GDP for first quarter, initial unemployment claims for May and pending home sales for April
  • Japan: retail sales for April (9:50am AEST), and BOJ’s Shirai speech

 

Stocks to watch:

  • APA Group rated new buy at BBY; price target $7.68
  • Karoon Gas: PetroChina may buy company's stake in Poseidon field, says AFR
  • Orica trades ex-dividend
  • Stockland raised to buy from hold at Deutsche Bank; price target $4.40
  • Suncorp has an investor day
  • Westfield and Westfield Retail Trust have AGMs in Sydney where shareholders will vote on a Westfield split
  • Intelligent Investor has “speculative buy” recommendations on Ausdrill, Bradken, Emeco Holdings, Macmahon Holdings and NRW Holdings in a detailed analysis of mining services stocks
  • Deutsche Bank cut Challenger Financial to “sell” from “hold” and has a $6.50 price target on the stock

 

Read more.

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

Your editors today are Jens Meyer and Patrick Commins.

This blog is not intended as investment advice.

BusinessDay with wires.

 

Quotes Search

Sort comments by:
  • "none of the experts believe credit can remain this cheap. Interest rates will eventually have to rise, probably by the middle of next year.

    When this happens, people making losses on their investment properties are likely to start making an even bigger loss because their interest payments will rise.

    They will hoping for big capital gains, of course. But when it was cheap credit that helped push prices higher in the first place, juicy capital gains could be harder to come by when rates are heading up."

    Housing boom!

    Commenter
    Allan
    Location
    Prahran
    Date and time
    May 29, 2014, 4:03PM
    • Spot on Allan, when rates do rise a lot of investors will have to re-do their maths. I would imagine we will see a sell of in apartments in particular, which will be bought up by those first time buyers currently priced out. That should establish a floor.
      This will lock in the big capital gains for investors, we may see a kick up in CGT.
      With investment properties switching ownership to home owners I would expect to see upward pressure on rents as a result.

      Commenter
      Irish Phil
      Location
      Date and time
      May 29, 2014, 4:36PM
    • Understand that's the conventional wisdom but I wonder is it inevitable rates go up?
      The only reason to do so is if inflation increases and that seems somewhat tamed. Rising housing prices seem to have acted as surrogate to dampen household spending.
      Plus if rates do need to go up then 1-2% points is all that would be needed to really slow spending (lower inflation)
      And IMO there's more likelyhood unemployment will rise from where it is in Oz (which would see rates drop further)

      Commenter
      Peter
      Location
      Oz
      Date and time
      May 29, 2014, 4:45PM
  • Comment at 3.39pm, Nev Power has to take credit for the huge success of FMG, very very clever man!

    Commenter
    Bob
    Location
    Date and time
    May 29, 2014, 3:50PM
    • Yep, great company. It wasn't worth $13/share though. Or even $6/share.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      May 29, 2014, 4:48PM
  • 3:39pm ... Fortescue ...as it urged the federal government to force oil and gas companies to develop or relinquish their leases. ....
    What a great plan.
    If they sit on leases here but don't develop them then they can keep prices higher for their gas in foreign fields. Tony and Joe have to get up off their knees and confiscate these leases.

    Commenter
    Wally
    Location
    Flynn
    Date and time
    May 29, 2014, 3:49PM
  • "where the cap goes, the rents are surely following"

    Nope. Rents track inflation, not property prices.

    Commenter
    Allan
    Location
    Prahran
    Date and time
    May 29, 2014, 3:45PM
  • "Dow Futures going vertically up! XAO ready for lift off soon in my opinion"

    What happened?

    Commenter
    Allan
    Location
    Prahran
    Date and time
    May 29, 2014, 3:43PM
  • A very basic lesson for all you budding property moguls:

    If you are negative gearing, you are losing money.

    Writing off your losses only returns the tax component of the loss which for the vast majority budding property moguls is 32.5%. The other component of the loss, 67.5% comes out of your pocket.

    You are not cash flow positive.

    Commenter
    Allan
    Location
    Prahran
    Date and time
    May 29, 2014, 3:33PM
    • @Allan: wow you really are not an accountant are you?
      It is absolutely possible to be cash POSITIVE, but declare a TAX loss, via the wonders of depreciation schedules.

      Commenter
      Irish Phil
      Location
      Date and time
      May 29, 2014, 3:57PM
    • Really, you mean 1.5m Aussies are wrong?

      Commenter
      Viking
      Location
      Sydney
      Date and time
      May 29, 2014, 3:59PM
    • Yes, negative gearing is a bad investment for anyone not on the top marginal rate. However I know people on very average incomes who have built up considerable wealth by accumulating an impressive negatively geared property portfolio through dumb luck and very hard work. The tax savings from negative gearing were a very minor consideration altho their low tax rates did help considerably each time they sold a property at a fat profit due to the 12 month rule, in joint names and a low marginal rate.

      Commenter
      mitch of ACT
      Location
      Date and time
      May 29, 2014, 4:01PM
    • "Yes, negative gearing is a bad investment for anyone not on the top marginal rate."

      The data shows most Australian littlelandlords are low-medium income low education level people.

      "However I know people on very average incomes who have built up considerable wealth by accumulating an impressive negatively geared property portfolio through dumb luck and very hard work."

      There are all sorts of people who have become wealthy through dumb luck and very hard work. Property speculators who timed the market during the time Australia's household DEBT soared to record levels are nothing special.

      "The tax savings from negative gearing were a very minor consideration altho their low tax rates did help considerably each time they sold a property at a fat profit due to the 12 month rule, in joint names and a low marginal rate."

      So they are really wealthy people making big money on rental yields and capital gains on investments but are still magically only in a low income tax bracket?

      Commenter
      T.J. Dillashaw
      Location
      Date and time
      May 29, 2014, 4:35PM
    • Depreciation is not a cash item and any positive cash flow effect is negated by the fact that you paid cash up front for the asset and provision must be made for the depreciation loss. You don't need o be an accountant to know that.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      May 29, 2014, 5:06PM
  • Is it possible that Joe and Tony have been aiming to induce more rate cuts. While paying of Swann's debt makes a lot of sense, is it wise to attempt to crash our economy at the same time. Great news from Joe that he wants our economy to be self sufficient. A weird statement when he is doing the opposite.

    Commenter
    Wally
    Location
    Flynn
    Date and time
    May 29, 2014, 3:31PM
    • How can our economy be self sufficient when so many of our industries have been sent offshore or sold to foreigners. You can't even by a pair of Aussie-made underpants anymore.
      As for crashing the economy, they are on the right track to do that and hence interest rates will have to come down.

      Commenter
      mitch of ACT
      Location
      Date and time
      May 29, 2014, 4:05PM
  • At least Joe is consistent. He was campaigning in his own self interest 27 years ago and he's still doing it today.

    Joe for PM!

    Commenter
    Allan
    Location
    Prahran
    Date and time
    May 29, 2014, 3:07PM
    • good choice!

      Commenter
      cyril
      Location
      Date and time
      May 29, 2014, 3:20PM
    • I'd have Peppa as PM before joe the goose !

      Commenter
      chuck this mob out
      Location
      illawarra
      Date and time
      May 29, 2014, 4:09PM
  • Short wpl 42.05. Gift

    Commenter
    Allan
    Location
    Prahran
    Date and time
    May 29, 2014, 2:44PM
    • could not agree more and STO next

      Commenter
      mushroom
      Location
      Date and time
      May 29, 2014, 3:23PM
    • nice, I am long at $42.01

      Commenter
      parrot
      Location
      Date and time
      May 29, 2014, 3:29PM
    • ps - target $50

      Commenter
      parrot
      Location
      Date and time
      May 29, 2014, 3:43PM
    • PS - target $32.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      May 29, 2014, 4:35PM
  • I find it amusing the power surveys have on the worlds money markets, what someone on a particular day thinks they may do at some time in the future = BUY or SELL.

    Commenter
    Cozmo
    Location
    Date and time
    May 29, 2014, 2:38PM
  • Sorry if this shows my lack of intelligence, but I'm trying to make sense of capital gains tax.

    If I buy $1,000 worth of shares in a previous tax year, and sell the same shares for $1,000 in this tax year, do I have a capital gain of zero, or of $1,000?

    Commenter
    Fred
    Location
    Date and time
    May 29, 2014, 2:31PM
    • Not sure if you are serious or not but i'll bite.

      you only have a capital gains event when you sell your shares. so therefore if you buy for 1000 and sell for 1000 you haven't made money therefore...$0 capital gain. if you sold it for 1050 instead you would have a capital gain of 50. You would then need to consider the time between buy and sell days. If you sold it more than a full year (365 days) after you purchased them you get a 50% discount on the amount recognised as income. This means that instead of paying tax on $50 you made you would only pay tax on $25. If you sell the shares in under 1 year (365 days) you would pay tax on the full $50 you made.

      Hope this help explain everyone you could come across. (assuming you didnt purchase the shares before CGT applied).

      Commenter
      Andy
      Location
      Sydney
      Date and time
      May 29, 2014, 3:24PM
    • CG is basically Sell Price - Buy Price. Relevance of period is only that if the share is sold within 365 days of the purchase date, the 50% discount on gain does not apply. NO relevance of going across financial years if within the 365 days.

      Commenter
      ranjit
      Location
      Date and time
      May 29, 2014, 3:24PM
    • at purchase price = sale proceeds, it does not matter when you sell them, you have a nil gain

      this is not really a tax question, it seems more primary school mathematics

      Commenter
      Jim in Glenroy
      Location
      Date and time
      May 29, 2014, 3:26PM
    • The capital gains event is triggered on the sale of the shares.
      If you never sell them you will never have to pay tax on the capital gain.

      Commenter
      no expert
      Location
      sydney
      Date and time
      May 29, 2014, 3:30PM
    • Thanks everyone. Yes I know it sounded silly, I just wasn't quite sure if the 365 days mattered for tax purposes.

      Commenter
      Fred
      Location
      Date and time
      May 29, 2014, 3:38PM
  • PRR going for a good run today and volumes are up. No new announcement and market barely reacted to last announcement recently. Something must be going on. Really hope this takes off now. Bought back in a couple of days ago after sellers regret set in, so am hoping to recoup some of my losses. Hope I haven't jinxed it now....

    Commenter
    confused
    Location
    Date and time
    May 29, 2014, 2:24PM
    • nah we are sitting pretty...whether its on a torpedo or not only time will tell.

      Commenter
      BearshapedBull
      Location
      Mugpunters Lounge
      Date and time
      May 29, 2014, 3:43PM
    • Do you think it's worth topping up at this stage?

      Commenter
      confused
      Location
      Date and time
      May 29, 2014, 4:40PM
  • Bios on a fairly sedate day but PRR and UBI bolting..those onboard must be quietly confident of some upward moves..go the micro's admittedly UBI was a shocker only 2 weeks ago...the train stopped to let the directors onboard then full steam ahead....hmmm

    Commenter
    BearshapedBull
    Location
    Mugpunters Lounge
    Date and time
    May 29, 2014, 2:22PM
  • Gold miners with AISC around USD800 oz continuing to make margins of 55% upwards.

    Debt repayment schedules are being slashed to less than 18 months. Almost unheard of in mining and the smart ones who have fully hedge production out 2 years at prices of USD1300-USD1500 have locked in bumper cash flows.

    Commenter
    Harry Rogers
    Location
    Date and time
    May 29, 2014, 2:19PM
    • Some sensible moves by the management teams @harry
      does that go anywhere to restoring your faith in some of our industry members?
      I remember you were somewhat despondent regards some recent performances across the board.

      Commenter
      BearshapedBull
      Location
      Mugpunters Lounge
      Date and time
      May 29, 2014, 3:49PM
  • According to world bank Australia continues to be one on the most fair countries in "Income Equality"

    Commenter
    Harry Rogers
    Location
    Date and time
    May 29, 2014, 2:10PM
    • You can stop fretting now. Abbot and Co are on the case and have promised the Big End of Town to have that fixed soon. Nothing like world class inequality to make the peasants serve your every whim!

      Commenter
      Jim
      Location
      Date and time
      May 29, 2014, 3:47PM
  • PRR you're gonna be a star
    you are
    all the way to reno

    Commenter
    BearshapedBull
    Location
    Mugpunters Lounge
    Date and time
    May 29, 2014, 1:57PM
  • A good business appears to be selling blue ties to LNP.

    Commenter
    nolongerconfused
    Location
    Date and time
    May 29, 2014, 1:48PM
  • So ASX chief Elmer Funke Kupper thinks high frequency trading is not a problem in Australia? Then it must just be an amazing string of coincidences that result in my orders in lightly-traded stocks being gazumped by 0.02 of a second day after day.

    Commenter
    James_F
    Location
    Melbourne
    Date and time
    May 29, 2014, 1:44PM
  • Is that article just a recycle?...im having deja vu...Elmer dont get Funki

    ASX chief not concerned about high frequency trading
    Read more: http://www.smh.com.au/business/markets/asx-chief-not-concerned-about-high-frequency-trading-20140529-395oh.html#ixzz334TGivNi

    Commenter
    BearshapedBull
    Location
    Mugpunters Lounge
    Date and time
    May 29, 2014, 1:22PM
    • And I replied, how much is the ASX making of HFT. Is the lack of concern to protect a lucrative revenue stream, at the expense of small traders.

      Commenter
      mitch of ACT
      Location
      Date and time
      May 29, 2014, 1:37PM
    • And that highlights the problem with the ASX, a privatised, partially self-regulated, quasi-monopoly that sells special access to computers. It creates an uneven and irregular playing field. If eBay started doing that, people would stop using it. But with the sharemarket, investors have no choice.
      Thanks @mitch for a moment there i was in a parallel blogiverse.

      Commenter
      BearshapedBull
      Location
      Mugpunters Lounge
      Date and time
      May 29, 2014, 1:52PM
    • Is there any chance that whoever pays the piper calls the tune?

      Commenter
      Wally
      Location
      Flynn
      Date and time
      May 29, 2014, 3:26PM
  • Being a fan of REITS i must say the SP performance of GOZ remains fairly lacklustre but returns are solid...out of favour or forgotten...divds in june so great return for those yield hungry just dont expect to much short term capital growth.

    Commenter
    BearshapedBull
    Location
    Mugpunters Lounge
    Date and time
    May 29, 2014, 12:59PM
    • Yep the REITs performed spectacularly in the GFC. Centro went from $10 to 3c which is an amazing performance when you think about it.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      May 29, 2014, 2:01PM
  • Tip: Don't buy the banks here. At 5% yield there is not much value there. Risk to the downside is much greater.

    Commenter
    Ridgy
    Location
    Date and time
    May 29, 2014, 12:58PM
    • I have been short CBA ever since it hit $81 - will it ever go down.??.. Will have to exit if it keeps going up even more :-( most , if not all analysts have a hold/sell so who is doing the buying ??

      Commenter
      Ranjit
      Location
      Melbourne
      Date and time
      May 29, 2014, 1:46PM
    • Be patient, your trade will eventually be in the money. Banks will struggle to improve profits in the next 12 mths.

      Commenter
      Ridgy
      Location
      Date and time
      May 29, 2014, 3:51PM
  • According to the RBA household wealth has been trending down since 2007 and household debt has continued to rise.

    Housing boom!

    Commenter
    Allan
    Location
    Prahran
    Date and time
    May 29, 2014, 12:55PM
  • @1247 comment
    yeah yeah you'll all like cheaper stocks but numbers is numbers....broking house or industry expert now which shall i believe?

    "Mr Cleary said Asia was looking short of 160 million tonnes a year of LNG by 2025. Even factoring in Russian pipeline sales, equivalent to about 28 million tonnes, and about 60 million tonnes a year of LNG exports from the US, there was a shortfall. "You've still got a gap in the market, not necessarily all in China."

    Read more: http://www.smh.com.au/business/chinas-clean-air-quest-to-drive-lng-investment-santos-20140526-38zss.html#ixzz334LwU5uS

    Commenter
    BearshapedBull
    Location
    Mugpunters Lounge
    Date and time
    May 29, 2014, 12:54PM
  • Today's chart so far looks very much like the Dow last night. Will we have that big dip at the end. http://money.cnn.com/data/markets/

    Commenter
    mitch of ACT
    Location
    Date and time
    May 29, 2014, 12:50PM
    • You are looking accurate at this stage. Possibly more any increases are being sold off quickly as investors still seem a little skittish..

      Commenter
      ALittleToTheRight
      Location
      Date and time
      May 29, 2014, 3:34PM
  • Eds: That Iron ore stockpile vs price chart is fascinating. Could you post one with a 3 year history to see if it corresponds to the typical dip we have seen mid year in 2012 and 2013?

    EDs: You wish is our command. Not much evidence of seasonality there. Chrs.

    Commenter
    Calculator
    Location
    Date and time
    May 29, 2014, 12:39PM
    • Thanks for that. The correlation is interesting and factors may be in play that make the two correlate more recently (eg stockpiles of steel).

      Commenter
      Calculator
      Location
      Date and time
      May 29, 2014, 1:50PM
    • Seems a good example of how charts (stats) can easily mislead. The X Axis bottoms out at 7500 tonnes and $100. So these huge variations are actually just zoomed in looks at the top end.
      Go back two years on the chart and stocks were at 10,000 tonnes (as oppose to 11,000 now). You can see the price dropped severely for a couple of months but then bounced right back (and more) as stocks settled at 7500 tonnes.

      Commenter
      Peter
      Location
      Oz
      Date and time
      May 29, 2014, 2:10PM
  • Joe Hockey campaigned against uni fees of $200 and now is in favour of fees of $120,000.

    Bad look Joe.

    Housing boom!

    Commenter
    Allan
    Location
    Prahran
    Date and time
    May 29, 2014, 12:38PM
  • Was hoping to buy back in on bank stocks but the price correction we have/hope too have hasn't eventuated....waiting for value on ANZ/NAB but running some targets @ 32.50ish...june maybe..patience for rewards.

    Commenter
    BearshapedBull
    Location
    Mugpunters Lounge
    Date and time
    May 29, 2014, 12:38PM
  • Any strength in the market now I will sell into. We are at the bottom of an interest rate cycle around the world. The ECB granted is looking to ease. UK and US looking to raise. No more easing talk from the RBA. Rates go up, stock market goes down. Rates go down stock market goes up. It's all about interest rates.

    Commenter
    Ridgy
    Location
    Date and time
    May 29, 2014, 12:35PM
    • If interest rates go down it will be because of a deteriorating economic situation so stock prices will have fallen ahead of an interest rate cut. The Budget is the most potent force on the horizon to precipitate an interest rate cut by its slashing of disposable incomes of a large segment of the population. An own goal from Abbott & co.

      Commenter
      mitch of ACT
      Location
      Date and time
      May 29, 2014, 1:02PM

  • a $10 rent raise for an even bigger positve cash flow on a negatively geared property...& 5.9% yield..."

    "You do realise you CAN be negatively geared with positive cashflow right?"

    "I think you missed the capital gain."

    No wonder over a million people in Australia are declaring rental losses. They get the basic maths wrong.

    Commenter
    Allan
    Location
    Prahran
    Date and time
    May 29, 2014, 12:33PM
    • For the love of all that is holy, please take a holiday. Enough already.....

      Commenter
      confused
      Location
      Date and time
      May 29, 2014, 12:42PM
    • So true, imagine what will happen when rates start to rise and they realize that the buffer they thought they had was non-existent.

      Commenter
      DR
      Location
      syd
      Date and time
      May 29, 2014, 1:40PM
    • @Allan: which part of the maths is not correct??

      Commenter
      Irish Phil
      Location
      Date and time
      May 29, 2014, 1:52PM
    • @Irish Phil & DR - thanks for your support. Villas on Central Coast going gangbusters and now hard to find. I bought before the SMSF hordes who are pushing the market now, so I've already factored 9% cap. growth over 2.5 yrs - might be a bit conservative...but where the cap goes, the rents are surely following - "housing boom"? Not likely!

      Commenter
      Prince Eugen
      Location
      Date and time
      May 29, 2014, 2:38PM
    • "but where the cap goes, the rents are surely following"

      where the logic to this?

      the more "investors" there are in the market, the greater the rental supply, the lower the rental rates become.

      Its called supply and demand... LOL

      Commenter
      fortune cookie
      Location
      Date and time
      May 29, 2014, 4:14PM
  • @12:24....FUN one week ago, we are not aware of anything that has not been disclosed that would effect our share price...today trading halt as a market announcement will be made

    Commenter
    Wwwish Lion
    Location
    Melbourne
    Date and time
    May 29, 2014, 12:28PM
    • As a FUN shareholder that is clearly a farce. A toy supplier run by clowns.

      Commenter
      Elric
      Location
      Melnibone
      Date and time
      May 29, 2014, 12:39PM
    • There was some analysis completed last year exactly on that issue.

      From memory, some crazy high % of ASX companies asked to show cause of trading bumps said "I know nothing" but within one week made an announcement that was price sensitive.

      Call regulators - any out there?

      Commenter
      ALittleToTheRight
      Location
      Date and time
      May 29, 2014, 1:05PM
  • a $10 rent raise for an even bigger positve cash flow on a negatively geared property...& 5.9% yield..."

    "You do realise you CAN be negatively geared with positive cashflow right?"

    "I think you missed the capital gain."

    No wonder over a million people in Australia are declaring rental losses. They get the basic maths wrong.

    Commenter
    Allan
    Location
    Prahran
    Date and time
    May 29, 2014, 12:26PM
  • "There’s nothing remarkable about using borrowed money to invest. But Australia’s army of littlelandlords stand out because so many of them are paying more in interest and other costs than they collect in rent – a strategy known as 'negative gearing.'

    Property investors chalked up a whopping $7.8 billion loss of income in 2011-12, the latest year for which official figures are available.

    While other costs such as water bills and council rates all contributed to this loss, the biggest factor by far was interest payments. Property investors’ annual interest bill was $24 billion, which wiped out more than 70 per cent of all gross rent collected."

    Commenter
    Chael Sonnen
    Location
    Date and time
    May 29, 2014, 12:26PM
    • UFC just a day job huh Chael ?
      creative choice.

      Commenter
      BearshapedBull
      Location
      Mugpunters Lounge
      Date and time
      May 29, 2014, 2:40PM
    • Can you believe the news today that Wanderlei Silva ducked me? Unbelievable.

      Commenter
      Chael Sonnen
      Location
      Date and time
      May 29, 2014, 4:01PM
  • "A second man has been arrested over an alleged fraud scheme that netted $100 million over the course of a decade."

    And money was poured into investment properties. Nah bank lending standards aren't lax at all. Guffaw!

    Commenter
    Allan
    Location
    Prahran
    Date and time
    May 29, 2014, 12:23PM
  • Beats headphone for $3B?

    "The deal signifies that Apple chief executive Tim Cook is willing to use the company's $US150.6 billion in cash"

    Or they could pay their fair share of tax. LOL.

    Commenter
    Allan
    Location
    Prahran
    Date and time
    May 29, 2014, 12:20PM
    • A curious purchase in my opinion. Beats make really poor, massively overpriced headphones. They are a product for those who prefer style over substance.

      Fits right into the Apple stable I guess...

      Commenter
      Jimmy
      Location
      Date and time
      May 29, 2014, 12:42PM
    • Totally agree, Jimmy. Shure, AKG, Sennheiser...so many credible headphone manufacturers. Unfortunately though, this is why Apple run a successful company - they assume that the average consumer is an idiot and they play to their stupidity. Plenty of folks out there have never heard of Shure, AKG or Sennheiser, but they lap-up some plastic rubbish with a second-rate rapper's name attached to them. Apple knows exactly what it's doing.

      Commenter
      Gareth
      Location
      Sydney
      Date and time
      May 29, 2014, 1:58PM
    • Beats - some of the worst bang for buck in the entire accessories market... but the Yuppies will buy up big on their credit card lifestyles!

      Commenter
      Liberator
      Location
      SEQLD
      Date and time
      May 29, 2014, 4:22PM
    • You don't really think they are after the headphones do you??
      The acquisition is almost entirely to do with Beats music streaming service.

      Commenter
      Irish Phil
      Location
      Date and time
      May 29, 2014, 4:37PM
  • "Capital expenditure figures from the ABS are out and private capex dropped 4.2 per cent over the March quarter, well below the consensus forecast of a 1.6 per cent fall"

    Housing boom!

    Commenter
    Allan
    Location
    Prahran
    Date and time
    May 29, 2014, 12:18PM
  • FMG continues its slide. Nope. By far my largest position so nope, no pain here. LOL.

    Commenter
    Allan
    Location
    Prahran
    Date and time
    May 29, 2014, 12:16PM
    • fantasy

      Commenter
      Maria
      Location
      Carey
      Date and time
      May 29, 2014, 2:04PM
  • Australia moves to Number one on the "where-to-be-born index,". China soars to 49th place and the UK falls futher to 27.

    Commenter
    Harry Rogers
    Location
    Date and time
    May 29, 2014, 11:45AM
    • All that mineral wealth and infant mortality amongst the indigenous population is a national disgrace. Stop patting yourself on the back.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      May 29, 2014, 12:14PM
    • Here on the Gold Coast today it is warm, sunny, and people are swimming at the beach and in the hotel pools.

      Commenter
      Gordon Akman
      Location
      Broadbeach
      Date and time
      May 29, 2014, 12:17PM
    • @Harry. Allan claims we are 25. Please explain the discrepancy.

      Commenter
      Wally
      Location
      Flynn
      Date and time
      May 29, 2014, 12:23PM
    • @Harry Rogers
      Switzerland is number 1 and Australia is number 2
      http://en.wikipedia.org/wiki/Where-to-be-born_Index

      Commenter
      xyz
      Location
      Date and time
      May 29, 2014, 12:23PM
    • xyz

      Totally true I guess my "tongue got stuck in cheek."

      Anyway have you ever been to Switzerland?

      I rest my case.

      Commenter
      Harry Rogers
      Location
      Date and time
      May 29, 2014, 1:53PM
    • Gordon - I am stuck in the office but I can see the light!

      Commenter
      Liberator
      Location
      SEQLD
      Date and time
      May 29, 2014, 4:24PM
  • I look forward to BSB, just a regular trader minus the ego. keep up the post buddy. I always take a look into what your in and out of. thumbs up!

    Commenter
    Cull the
    Location
    political egocentrics!
    Date and time
    May 29, 2014, 11:36AM
  • Brazil's Vale says Australia should stop "gouging" China on iron ore prices ...it's not very business like.

    China says its rare earth metals are not over priced and just wants to help everybody by restricting their exports.

    Commenter
    Harry Rogers
    Location
    Date and time
    May 29, 2014, 11:34AM
    • Vale like Australia's high prices. They're easy to undercut.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      May 29, 2014, 12:12PM
  • Breaking News:

    Japan now moves to top of chart on life expectancy after Fukushima reactor incident. Japanese now live 1 year longer than Austrailans. Japanese immigration minister expects influx of older Australians.

    Commenter
    Harry Rogers
    Location
    Date and time
    May 29, 2014, 11:27AM
    • At least they didn't irradiate half the outback.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      May 29, 2014, 12:11PM
  • Gold heading for triple bottom, might even take it out this time, nothing to like about the precious metal at the moment!

    Commenter
    Gold Balls
    Location
    Date and time
    May 29, 2014, 11:27AM
    • I sincerely hope it does break $1180! Nothing like cheaper gold and gold equities! Ideally i'd like to see a few more miners go bust tho (or more M&A).

      Commenter
      Bye Bye Fiat Money
      Location
      Date and time
      May 29, 2014, 11:59AM
  • So if 5500 holds, we are heading for 5600 next week!

    Got to stop somewhere I guess, but have to make hay when the sun shines, like all good things it cannot last forever!

    Commenter
    Mister5100
    Location
    Date and time
    May 29, 2014, 11:23AM
    • Just be careful, there's too much bullishness. The XVI making 10s yesterday should be a big warning indicator of complacency in the market.

      Commenter
      Bye Bye Fiat Money
      Location
      Date and time
      May 29, 2014, 12:01PM
    • Shorts in the market looking rather thin...but that could be more of a daily/weekly indicator check:
      http://www.asx.com.au/data/shortsell.txt
      lots of 0.00 numbers when usually a scan reveals a few 0.5-1.0 percentages.
      I just use it as a guide to which stock might be under pressure.any relate that to where UBS are stalking...

      Commenter
      BearshapedBull
      Location
      Mugpunters Lounge
      Date and time
      May 29, 2014, 12:29PM
    • That's because you're looking at the wrong list:

      http://www.asic.gov.au/ShortSell/ShortSellReports.nsf/vwPublishedReportsAndPlaceHoldersByKey/PDF~DAILY~20140522/$file/Daily+Short+Positions_en-au.pdf?OpenElement&uniqueValue=9KJ65X

      A lot of shares more than 10% short there.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      May 29, 2014, 12:43PM
    • Thanks Alan i was lead astray by the ASX data....

      Commenter
      BearshpaedBull
      Location
      Mugpunters Lounge
      Date and time
      May 29, 2014, 1:28PM
  • Twiggy Forrest might have difficulty breaking into the China meat market. Importantly the average annual wage is about $7000 & the cost of Oz beef will be prohibitive. They consume very little if any beef although I came across yak steak in Dali. The Chinese diet is mainly vegetables, poultry, fish & pork all produced in Asia where production & transport costs are low. It is interesting to note that dairy products are sourced from Northern Europe and New Zealand. A tour of Beijing & Shanghai supermarkets shows no products from Australia.

    Commenter
    Seb Gonzo
    Location
    New Farm
    Date and time
    May 29, 2014, 11:20AM
    • The high end restaurants in China love highlighting their steak (and seafood) is sourced from Australia. Twiggy is not first to the party but it is a market that is only going to get bigger. Though like everything in China I am certain the steak i have eaten claiming to be from Australia is probably something very different (hope it was cow).

      Commenter
      Elric
      Location
      Melnibone
      Date and time
      May 29, 2014, 12:13PM
  • "The recovery in new home building is a key plank in Australia’s economic growth, as evidenced by the March quarter construction work done figures released yesterday,” said HIA Chief Economist, Harley Dale in a statement."

    Nope. Australia has one of the lowest person to dwelling ratios in the world. A .2 uptick means no new dwellings will be required for 2 years.

    These sales increases are mostly poorly built apartments flogged off to foreigners and double the price they are worth.

    Commenter
    Allan
    Location
    Prahran
    Date and time
    May 29, 2014, 11:04AM
    • There will be a glut of apartments when the crash comes.

      Commenter
      Dr No
      Location
      Sydney
      Date and time
      May 29, 2014, 11:20AM
    • Agree, other countries measure economic growth in number of new companies started, new products launched and new market entries and penetration etc. Germany looks at export growth of cars, electronics, new technology, but Australia looks for growth in new houses.

      Commenter
      Viking
      Location
      Sydney
      Date and time
      May 29, 2014, 11:21AM
    • Check out VLW. I'm sitting on a nice parcel bought cheap in an SPP and enjoying the ride.

      Commenter
      mitch of ACT
      Location
      Date and time
      May 29, 2014, 11:23AM
    • The Multiplier effect of housing is enormous for the economy so one should be happy to see the improved housing numbers, My industry experience can testify to the benefits!

      Commenter
      craig
      Location
      Date and time
      May 29, 2014, 11:36AM
    • Have to agree with you there. The apartments in the various enclave areas of Sydney especially are designed for short term use. You often see significant repairs being undertaken quite quickly.

      One area at Hurstville in Sydney especially has a block put up less than 15 years ago and is being demolished now for a new similar sized block due to poor building quality. Cheaper to replace than fix.

      Commenter
      ALittleToTheRight
      Location
      Date and time
      May 29, 2014, 11:53AM
  • I am thinking of buying MTS and PBG. Any thoughts anyone? Both are well down recently and show good dividends.

    Commenter
    Gumly
    Location
    Mackay
    Date and time
    May 29, 2014, 11:02AM
    • I hold MTS. There are some downside risks as they re-invest in the company, but, yes, the dividends are nice and worthy of capital risk in what is after all a solid business.

      Commenter
      Joe the POM
      Location
      Geelong
      Date and time
      May 29, 2014, 11:52AM
    • I've been severely burnt with MTS in the past and wouldn't touch them with a very long pole. the problem with them is that they are 2nd tier in every market they operate and the bug boys (WES and WOW mainly) will continue to trample on them. I see no future for them and the good dividends are a thing of the past.

      Commenter
      Grinch
      Location
      Date and time
      May 29, 2014, 1:48PM
    • divds before the facts so retrospectively look good going forward never to be repeated....so stay out.

      Commenter
      BearshapedBull
      Location
      Mugpunters Lounge
      Date and time
      May 29, 2014, 4:38PM
  • a quick economics history lesson - with a laugh.
    large amounts of debt from buying personal goods. car manufacturing decline. new residential housing decline. sound familiar?

    https://www.youtube.com/watch?v=GCQfMWAikyU

    Commenter
    smilingjack
    Location
    Date and time
    May 29, 2014, 10:57AM
  • 457 exposed as a national rort.

    http://www.theaustralian.com.au/national-affairs/policy/jobless-lose-out-to-migrant-force/story-fn59noo3-1226935057394#&mm-premium

    And here is another (partial) reason why wages of even professional groups are faltering.

    The Big End of Town minions- aka Abbot and Co - want the Big End of Town to keep all its profits as employees and unemployed take ALL the pain as the China mining boom deflates in the next couple of years.

    Housing Boom!

    Commenter
    Jim
    Location
    One Trick Pony
    Date and time
    May 29, 2014, 10:55AM
    • Wow...if you believe this is the reason you are easily manipulated. 37,000 out of a work force of around 7 million is about 0.5% of jobs.....not so bad. get over it

      Commenter
      Wwwish Lion
      Location
      Melbourne
      Date and time
      May 29, 2014, 1:38PM
    • Wish, art thou claiming there are 7 million professional workers in Australia?

      The actual comparison is between the number of "professional" 457s (37 000) against the pool of unemployed professionals (191 000).

      And as anybody with knowledge of economics knows, the price paid for any commodity, including labour, is determined at the margins.

      If thou wishes to deepen thy understanding read this:

      http://en.wikipedia.org/wiki/Marginal_cost

      It's nice to know there are things you can still learn, isn't it !

      Commenter
      Jim
      Location
      I hope the NLP or mates are paying you Wish
      Date and time
      May 29, 2014, 2:33PM
  • Australia gouges China by raising iron ore prices to triple 2007 prices.

    Australians do not top the chart for longest lifespan. They are at no. 9.

    Australians have the faster rate of obesity in the world.

    Australia squandered the benefits of the mining boom on overseas holidays and bidding up house prices.

    Australia no. 25 on the list of Nobel Laureates per capita despite its resource riches.

    "Australians have come out on top as the world's most envious people in a tally of the seven deadly sins."

    We can do a lot better.

    Commenter
    Allan
    Location
    Prahran
    Date and time
    May 29, 2014, 10:55AM
  • ORG going for another run...day trading or just the realisation the're on a good thing...come on $16.

    Commenter
    BearshapedBull
    Location
    Mugpunters Lounge
    Date and time
    May 29, 2014, 10:54AM
    • @BSB, this one is a beauty, if you were short @ $12, the pain must be excruciating!

      Commenter
      ORGan donor
      Location
      Date and time
      May 29, 2014, 11:17AM
    • Shorters cleaned up on the drop form $19 to $11. They're gearing up to do it again.

      Commenter
      Herman
      Location
      Date and time
      May 29, 2014, 12:07PM
    • Could you enlighten me as to when this magical price took place Herman?

      Commenter
      BearshapedBull
      Location
      Mugpunters Lounge
      Date and time
      May 29, 2014, 12:17PM
  • Politicians are experts at moving consumer sentiment. We are now at the same level as when Ms Gillard was in power in September 2011.

    Seems they both read from the same script.

    Commenter
    Harry Rogers
    Location
    Date and time
    May 29, 2014, 10:52AM
  • "A picture says a thousand words: iron ore's slide in 2014 has been largely been because of a flood of supply."

    As was predicted by anyone that wasn't a spruiker.

    Commenter
    Allan
    Location
    Prahran
    Date and time
    May 29, 2014, 10:42AM
    • Yes charts are an amazing reality check, I have been just checking out a few myself, hard to believe the likes of CBA. I guess the writing was on the wall when the RBA Governor suggested investors might consider shifting from term deposits to stocks, most people I know did!

      Commenter
      which bank?
      Location
      Date and time
      May 29, 2014, 11:14AM
    • The leap in stock prices recently, not backed up by significant earnings growth, means that the dividend yield on market value has dropped on many stocks to less than the 7% I've been getting on my 5 year TD with Rabo since 2011. If all of the measures in the contractionary Budget get through I'm expecting earnings growth and dividends to fall. In the meantime that TD keeps paying 7%. TDs have their place.

      Commenter
      mitch of ACT
      Location
      Date and time
      May 29, 2014, 12:06PM
    • Charts can also be very misleading. Notice the x axis of this one is 7500 tonnes (not 0). We're talking 10% variations (not that you'd think it from the look at this graph). See above for how almost the same situation as now developed two years back and saw a rapid dip and then return to record high prices over a month or two...

      Commenter
      Peter
      Location
      Oz
      Date and time
      May 29, 2014, 2:20PM
  • Sell in May...maybe today!

    Commenter
    goofy
    Location
    Date and time
    May 29, 2014, 10:37AM
    • or be a prune and buy in June

      Commenter
      goober
      Location
      Date and time
      May 29, 2014, 11:02AM
  • sold 280 GXL $9.38 take ya costs out and let the profits run....

    Commenter
    BearshapedBull
    Location
    Mugpnters Lounge
    Date and time
    May 29, 2014, 10:26AM
    • That's the way to do it @BSB, you won't go broke making a profit!

      Commenter
      Captor
      Location
      Date and time
      May 29, 2014, 11:04AM
    • Been a portfolio "pet" for awhile now but i noticed some good press going around about their acquisitions lately...solid market performance and mostly against the trends...was a sale with some regret but like ya say profits are there...take em.
      Anyones watchlist should keep an eye on them,under $7 grab it again...if that day comes.

      Commenter
      BearshapedBull
      Location
      Mugpunters Lounge
      Date and time
      May 29, 2014, 12:13PM
  • GOR picked the wrong day to announce good ore body results....
    thinking about buy in on DRM @ 70c but might hold after gold price trending...some low cost producers will become attractive for those interested. friday may be cheaper if the pattern continues.

    Commenter
    BearshapedBull
    Location
    Mugpnters Lounge
    Date and time
    May 29, 2014, 10:17AM
    • I got in @76, silly me. From what I researched it looks like a solid company.They have reduced debt and have plenty of cash as the gold is flowing. As long as the gold price does not go below $1100 I think it is a good buy. Liquidity is a little low though. I'll keep an eye on it and pick up some more if it hits .70

      Commenter
      Styx
      Location
      Date and time
      May 29, 2014, 10:47AM
  • The dinosaurs in the Lieberal party, still living in the world where climate change and carbon pollution are not to be talked about and renewable energy is to be trashed, are finding that the companies that donate to their campaigns are dumping their fossil fuel investments. Now given that these companies expect the gov't to support the industries that they invest in there is some hope for the renewables sector. Can you imagine Tony Abbott pulling funding from renewables while at the same time the companies that are funding his re-election campaign are pouring cash into that sector. Even a party with the twisted priorities of the Lieberals knows where its interest lie, particularly when its political opponents have a common interest with its donors. I wonder if they will tie themselves up in knots trying to decide who and what to dump, their donors or their policies. I feel a distinct wave of schadenfreude. http://www.smh.com.au/business/mining-and-resources/amp-fund-dumps-fossil-fuel-investments-20140528-394iz.html

    Commenter
    mitch of ACT
    Location
    Date and time
    May 29, 2014, 10:16AM
    • I think you will find the Liberals - like Labor take their orders from the USA. What ever money from donors dries up Im sure the USA will take up the slack.
      a few million here and there and is nothing compared what the yanks will pay for a government.

      http://rt.com/op-edge/161960-pentagon-nigeria-locked-down/

      sounds eerily like what his about to happen to the miners here. Is happening to the miners and more and more other workers here.

      Commenter
      smilingjack
      Location
      Date and time
      May 29, 2014, 11:06AM
    • Liebor Party was totally incapable of resolving that issue though Juliar, Dudd and Swiney -what makes you think anyone else can?

      Commenter
      ALittleToTheRight
      Location
      Date and time
      May 29, 2014, 12:14PM
    • Mitch I used to be all for getting rid of the carbon tax. Then I had an essay topic on alternative energy sources to do for uni. 24 valid references into my research, I self-converted. Harvard University did a reasearch paper concluding in 2006 that if their investment in wind energy was maintained at its then current level, they would be able to generate all their electricity through wind power by 2030. The switch to renewable energy is a certainty in the future. As fossil fuels become more and more scarce, and renewable energy tech becomes cheaper and more effiicent, it's just a matter of when. The carbon tax was a mechanism to shift that switch closer to the present by increasing the desire by big business to invest in renewables, thus increasing R&D funding to bring about viable purchases for smaller businesses and households.

      Commenter
      GC
      Location
      Date and time
      May 29, 2014, 12:15PM
    • @Mitch. Your not suggesting that whoever pays the piper calls the tune.

      Commenter
      Wally
      Location
      Flynn
      Date and time
      May 29, 2014, 12:21PM
    • @GC my switch to renewables, by putting 5kw of solar panels on my roof, has paid off handsomely. ROI of 17%pa provided the sun comes up each day. If I had had more roof space I would have put on more. Roof-top solar is saving the cost of building more coal/gas-fired power stations and could mean that we stand some chance of getting through the worst of ever hotter summers without blackouts from air conditioner use.

      Commenter
      mitch of ACT
      Location
      Date and time
      May 29, 2014, 1:21PM
    • Main issue with solar panels is the huge environmental cost in manufacture then disposal. Very few people realise what is actually in them, and how nasty the disposal is after their relatively short lifespan.

      Sort of like earth-hour. Sounds great until the realisation that it causes component failures. At least it doesn't fade the curtains.

      Commenter
      ALittleToTheRight
      Location
      Date and time
      May 29, 2014, 1:49PM
    • Soory Mitch, I'm very pro environment but the solar scheme is just and expensive feel good sop. ROI% is ever diminishing as the tax subsidies reduce. But more importantly (to me) those subsidies also simply meant other tax payers are simply subsidizing your electricity bill.
      Solar panels themselves are also relatively insufficient at generating environmental returns. i.e there are much better ways to spend tax dollars to help the environment (but then all those middle / upper households wouldn't get their solar rebate) :o)

      Commenter
      Peter
      Location
      Oz
      Date and time
      May 29, 2014, 2:17PM
    • Must remember these words - base load.

      All renewable discussion is moot without them in scope.

      Commenter
      ALittleToTheRight
      Location
      Date and time
      May 29, 2014, 2:54PM
  • re 10:08 post, AMP isn't reducing its exposure to fossil fuels. It is offering products to allow others to reduce their exposure. AMP, as always, is trying to make a quid.

    Commenter
    Panhandler
    Location
    Date and time
    May 29, 2014, 10:15AM
  • ‘‘It is a market based on speculation of prices growth,’’ said the senior economist at Australian Property Monitors who crunched the numbers, Andrew Wilson. ‘‘This is not people searching for their new home in a great neighbourhood, this is people trying to take windfall gains from the property market. But these investors are entering a market that has passed its cyclical peak.’’

    Housing boom!

    Commenter
    Allan
    Location
    Prahran
    Date and time
    May 29, 2014, 10:15AM
  • Headlines

    Iron ore up 300 % on 2007 prices.

    Lowest sustained interest rates since Federation.

    Australia declared wealthiest nation.

    Australia most envied nation in the world.

    Australian quality of life expected to continue to improve as other nations continue to decline.

    Australian men and women top the chart for longest lifespan.

    Australian medical Nobel prize winners per head of population largest in the world.

    Commenter
    Harry Rogers
    Location
    Date and time
    May 29, 2014, 10:11AM
    • Nice comment. We should appreciate Australia more for the land of opportunity and wonder it is.

      Commenter
      It's All About Making Money
      Location
      Lennox head
      Date and time
      May 29, 2014, 12:19PM
    • This sounds just like the bragging in Ireland circa 2007.

      Just to put things in perspective -
      Japan produces 3 times our patents per head

      Australia is one of the lowest countries in the OECD for IP or technological exports - worse than Spain in proportion.

      Australia is seeing the massive and increasing permanent migration of its best and brightest

      The property bubble was saved by and leveraged up on the China mining boom, a boom that led to over investment in the mining sector and will hit us hard in the near future

      Australia's economy is narrowly based and prone to huge swings in direction

      Commenter
      A bit of reality
      Location
      Date and time
      May 29, 2014, 2:09PM
    • To be sure , to be sure me laddie!

      Commenter
      Harry Rogers
      Location
      Date and time
      May 29, 2014, 4:00PM
  • ‘‘Investor activity is very strong as values are rising, however, rental returns are low and falling,’’ he said. ‘‘The concern, of course, is once value growth slows or values fall, do the investors remain in the market or look to exit to other asset classes?’’

    Housing boom!

    Commenter
    Allan
    Location
    Prahran
    Date and time
    May 29, 2014, 10:02AM
    • It really is as simple as following the trends, not that hard!

      Commenter
      Captor
      Location
      Date and time
      May 29, 2014, 10:12AM
    • Boom Times ahead... I am not counting on it though! Debt free feels good!

      Commenter
      Liberator
      Location
      SEQLD
      Date and time
      May 29, 2014, 10:35AM
  • "The price of iron ore has dropped again overnight and could drag the Australian dollar with it on concerns that global stockpiles are growing as demand for the steel making commodity eases."

    Quick, open some more iron ore mines!

    Housing boom!

    Commenter
    Allan
    Location
    Prahran
    Date and time
    May 29, 2014, 9:41AM
    • I think we are getting your point Allan...you are just making yourself look silly by repeating it ad-nauseum.
      However keep it up if you want people to scroll past your postings.

      Commenter
      happy Hippy
      Location
      Date and time
      May 29, 2014, 10:06AM
    • We could still save the iron ore business if we borrowed money and installed steel frames in every class room in every school in the country.

      That could save us from recession!

      Commenter
      Dr No
      Location
      Sydney
      Date and time
      May 29, 2014, 10:09AM
    • ...or perhaps we could replace peoples wooden roof trusses with steel trusses. That would work and nobody has tried anything similar before.

      Commenter
      ALittleToTheRight
      Location
      Date and time
      May 29, 2014, 10:36AM
    • would replacing wooden trusses prepare the poor housing stock for a future of ever increasing energy costs, thereby saving money in the long run by retrofitting said poor quality housing stock, instead of having to replace it all at a great cost to the environment?

      Commenter
      j
      Location
      syd
      Date and time
      May 29, 2014, 10:51AM
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