Well, that's it for 2013. It's been an exciting year, to say the least, and we are now signing off for a few weeks of holidays. We will be back mid-January, most likely on January 13, depending on the news flow.
Thanks everyone for reading this blog and posting your many comments. We're looking forward to welcoming you back next year, re-energised and relaxed.
Happy holidays and all the best for 2014!
In late news, Richard McIndoe has stepped down as chief executive of EnergyAustralia.
In a statement issued late this afternoon, the company said McIndoe had “announced his intention to leave the business”. McIndoe had led the significant expansion of the company and had accepted a role to “lead a Hong Kong-based energy technology business as its chairman”.
He will serve at EnergyAustralia until June 2014 to ensure a smooth transition to a successor.
McIndoe is embroiled in a high-profile wrongful dismissal case involving a former EnergyAustralia executive Kate Shea.
Shea has sought $6 million in compensation after claiming she was sacked for raising allegations of sexual harassment against the company’s chief financial officer Kevin Holmes.
The company and Holmes have strenuously denied the allegations and a judgment is pending from the Federal Court.
An EnergyAustralia spokeswoman said McIndoe’s departure was in no way related to the court case.
ANZ led the blue chips' charge today, soaring 2.1 per cent to $31.78, while miners were the biggest gainers in the top 200 stocks:
The ASX200 rose 3.3 per cent for the week, chalking up its biggest one-week gain since mid-April and snapping four straight weeks of losses.
Despite the past two days' strong rally, the index is still down 1.25 per cent for the month.
The sharemarket has closed at the day's high, extending yesterday's strong rally.
The benchmark S&P/ASX200 index jumped 63 points, or 1.2 per cent, to 5265.2, while the broader All Ords gained 59.5 points, or 1.1 per cent, to 5261.5.
Among the sectors, financials rose 1.3 per cent, materials added 1.1 per cent and gold jumped 2.5 per cent in an impressive intra-day turnaround.
As a few readers have noted, gold stocks have made a stunning comeback this afternoon, with the sub-index now up 3.3 per cent after earlier being the only sector in the red.
Apart from a small lift in the gold price (up 0.8% after the overnight 2%-plus sell-off), at the moment we can only assume that investors are hoping the sector has bottomed and are now doing some bargain hunting.
Here's how some of the gold miners are doing:
- Newcrest: +6.%
- Resolute Mining: +8.7%
- Evolution Mining: +6.7%
- PanAust: +6.5%
- St Barbara: +6%
The ASX 200 is closing out the week on a positive note, ending its four-week losing streak, IG's Chris Weston:
- Volume has been huge, but this is purely artificial as it was options expiry yesterday. In this situation, options traders who had bought puts or sold calls would have had to deliver stock to the other side of the trade and subsequently cover and buy it back in the pre-market auction.
- For the rest of the day, it’s been a story of buying in financials, discretionary and energy names. The energy space is being buoyed on the back of moves in natural gas, and this is another asset which continues to get attention as well, especially with the commodity printing a higher high.
- Momentum- and trend-focused traders are keen to stay long on natural gas right now, enjoying the strong mix of compelling fundamentals (stockpiles fell the most on record yesterday), while the price action suggests the bulls are firmly in control. On the equity side, my equity man (Evan Lucas) likes Santos and Oil Search.
- While the ASX has found good buyers this week below 5100 and could continue to move higher in the coming week or so, the same can’t be said for the AUD, which needs to close above 0.8964, or it will print a tenth consecutive negative print. Surely we get a short-covering rally next week and end this run?
The ASX200 over the past three months.
Regional markets are mixed, with Chinese shares falling for a ninth day amid concern funding costs for the nation’s lenders will remain high even after the central bank injected cash into the financial system. Meanwhile, the local market is steaming ahead:
- Japan (Nikkei): -0.4%
- Hong Kong: -0.45%
- Shanghai: -0.6%
- Taiwan: +0.3%
- Korea: +0.1%
- ASX200: +0.95%
- Singapore: +0.2%
- New Zealand: -0.1%
‘‘Even though the People’s Bank of China yesterday injected little bit of funds to the market, it may not be enough and liquidity is bound to remain tight because it’s year-end,’’ says Ben Kwong, Hong Kong-based chief operating officer at brokerage KGI Asia. ‘‘Higher interbank rates will continue to depress the Hong Kong stock market.’’
Whitehaven Coal has defeated an environmental challenge to government approval of its $766 million Maules Creek mine in New South Wales.
A federal court judge ruled in favour of Whitehaven, dismissing a challenge from a group that was concerned the open-pit mine will destroy forest, deplete groundwater and spread coal dust on farms.
The judgment clears the way for Whitehaven to start building the 13 million tonnes per year Maules Creek mine, due to start selling thermal and metallurgical coal in the first quarter of 2015.
Whitehaven shares are up 3 per cent at $1.86.
Better steer clear of long-term investments in commodities, UBS Weath Management's global head of investment, Mark Haefele, writes in a guest comment for the FT:
Investors have long looked to commodities to answer specific needs in their portfolios. But we find it hard to justify any long-haul allocation to the asset class.
Over the next five years, our financial models show that commodities will generate equity-like volatility of about 18 per cent on average with returns of under 2 per cent a year. According to our medium-term outlook, this gives commodities an expected risk-adjusted return that is inferior to all other asset classes.
Although investors can still generate gains by investing in commodities on a tactical basis, we feel the benefits of strategic holdings in the asset class have waned to the point of non-existence.
Warrnambool Cheese & Butter, the company at the centre of one of the most hotly contested takeover battles in recent years, expects to double its first-half earnings.
Warrnambool, which is backing a bid from Canada's Saputo, said strong international dairy demand and pricing, a falling Australian dollar and an improved product mix were driving profits.
Chairman Terry Richardson said the first half would provide a "robust foundation" for the balance of the year.
Saputo earlier this week increased its unconditional cash offer of $515 million to as much as $549 million if it receives acceptances of 90 percent or more of Warrnambool shareholders.
As of Monday, Saputo had received acceptances worth 16.9 per cent, taking it close to the 18 per cent stakes held by each of Murray Goulburn and Bega, which this week conceded defeat and will pull out of the bidding.
Warrnambool shares are up 0.4 per cent at $9.23, while Bega shares have fallen 2.2 per cent to $4.39.
ANZ chief Mike Smith has moved to soothe concerns about the roll-back of economic stimulus measures in the United States, arguing that growth in Japan will help shield the Asian region from any negative consequences.
“As we hear about tapering in the US, the effects in Asia are going to be mitigated somewhat by continued access to liquidity from Japan,” Smith says.
Japan’s central bank kicked off a $1.4 trillion “quantitative easing” program in April as part of plans to stimulate its economy and bring a decade of deflation that has held back the country to an end.
“Obviously the whole easing has created excess liquidity in Japan. You have had the adjustment of the yen. That has stimulated industry in a way in Japan that I have not seen in my lifetime, in my business lifetime I should say. I would say that is going to continue,” Smith said.
In a televised interview with the Hong Kong Trade Development Council, Smith said the outlook for 2014 was possibly better than for any year since the global financial crisis:
“I think it is a combination of events. One is that Asia Pacific is doing better off the back of Chinese growth, which is higher than expected. The US is definitely recovering, so that is helping global growth and Europe seems to have bottomed out.”
Chinese stocks are down for a ninth day, with the benchmark index poised for its longest losing streak in almost two decades.
The central bank’s injection of funds to selected lenders failed to ease concern that liquidity will tighten before the resumption of share offerings next month.
The Shanghai Composite has dropped 0.8 per cent, heading for the lowest level since November 14.
The People’s Bank of China said yesterday it conducted short-term liquidity operations recently after the benchmark money-market rate hit the highest level since the June cash crunch. The rate rebounded 63 basis points after falling 208 points earlier today.
‘‘The central bank said they have released funds but that could be just a short-term thing,’’ says Xu Shengjun, analyst at Jianghai Securities. ‘‘It’s not convincing to investors if this will help with tightening liquidity in the market’’ with IPOs resuming in January.
How long would it take you to earn $US37 million? If you’re Warren Buffett, one day.
That’s the figure website Wealth-X has come up with after crunching the numbers on how much the wealth of some of the world’s richest billionaires grew by this year.
The full top 10, with wealth calculated over the 345 days from January 1 to December 11:
- Warren Buffet, $US12.7 billion gain to $US59.1 billion ($US37 million per day)
- Bill Gates, $US11.5 billion gain to $US72.6 billion ($US33.3 million per day)
- Sheldon Adelson, $US11.4 billion gain to $US35.3 billion ($US33 million per day)
- Jeff Bezos, $US11.3 billion gain to $US34.4 billion ($US32.8 million per day)
- Mark Zuckerberg, $US10.5 billion gain to $US24.7 billion ($US30.4 million per day)
- Masayoshi Son, $US10.3 billion gain to $US19.1 billion ($US29.9 million per day)
- Sergey Brin, $US9.3 billion gain to $US30 billion ($US26.6 million per day)
- Larry Page, $US9.3 billion gain to $US29.9 billion ($US26.6 million per day)
- Lui Chee Woo, $US8.3 billion gain to $US19.6 billion ($US24.1 million per day)
- Carl Icahn, $US7.2 billion gain to $US22.1 billion ($US20.9 million per day)
Making $US37.1 million a day ... Warren Buffett. Photo: AFP
Michael Pascoe: Gold in US dollars is back to where it was in 2010 – and of course paying no interest or dividends to those who held it over that time.
Gold’s latest bubble peaked in August 2011, with this year particularly unkind to it, down 28 per cent in greenbacks, but only 16 per cent in Australian dollars as the Aussie has come off.
The problem for the true believers still clinging to the yellow metal is how much lower it will fall as the exchange traded funds continue to dishoard and physical demand is affected by deflation – the suspicion that gold will be cheaper to buy in the future and therefore, there being little reason to buy it today.
Standard Bank’s commodities analysts warned last week that physical demand in Asia was muted and would not absorb the ETF sales.
It has always been a bubble that was going to pop, just a matter of when and from what height. And you know that old phrase “I don’t like to say I told you so”? Well it’s true. Everyone loves to say I told you so. I told you so.
And this is what Standard Bank’s Walter de Wet (not a gold sceptic by any means) wrote last Friday:
Over the past few weeks we have indicated that the gold physical demand response from Asia has been quite muted given the price decline. In especially June and July, when gold was also trading at current price levels (around $1,220), physical demand was very strong. This is not the case right now.
In addition to the muted demand response, we are also now witnessing a more price sensitive demand response at the current low levels, i.e., when the gold price rallies even from the current low levels, physical demand from Asia, and China in particular, seem to fall away quite quickly.
One of the worst performers on the ASX200 this year, by the way, is Australia's bigest goldminer, Newcrest, down a whopping 68 per cent at $7.10 since the beginning of 2013.
Just a reminder that this is the last Markets Live blog for the year. The blogging team will be back, hopefully re-energised around mid-January. We're aiming for Monday, January 13, but if things are really quiet news-wise we might extend our leave for a week.
The Australian dollar has rebounded slightly after crashing to a 3-1/2 year low, but currency strategists believe the gentle recovery will be shortlived.
The Aussie is trading at 88.81 US cents, after plummeting to 88.19 US cents yesterday morning when the US Federal Reserve finally announced it would start reeling in its $US85 billion a month bond buying program.
But while it appears to have gained support a touch above 88 US cents, IG Markets chief strategist Chris Weston says the local unit will smash that barrier soon:
- I sit in the camp that the Australian dollar will trade down to US85c at some stage, which is good for economy. The lower it goes the less the need for a rate cut so it is kind of a self fulfilling prophecy.
- I just don’t know what is going to cause massive Australian dollar appreciation. I don’t think that we are going to get 50 basis point increases in the cash rate this year. If we do, then you start think to yourself that the Australian dollar is a pretty good buy, but I don’t see that.
Royal Bank of Scotland currency strategist Greg Gibbs also forecasts further pressure for the Aussie as the US dollar continues to strengthen. He sees the Aussie falling to the low 80 US cents next year, and even below should China's economy deteriorate:
- If the Chinese economy was to turn down even for a short period, the market would jump all over it.
- China is trying to address some major issues, in particular the excesses of the financial industry, and in doing so it creates a whole range of risks for their growth and none of them to the upside.
China's plan to build confidence in domestic stock markets and turn around their reputation as financial casinos will depend on a regulatory gamble paying off next year.
Authorities have decided to lift a ban on new stock listings from as early as next month, wagering that a series of confidence-building measures announced recently will ensure healthy demand for the tide of new shares expected in 2014.
But if they are wrong, a flood of new listings could not only sink China's already-struggling bourses but also jeopardise a bigger reform goal: to ensure more money flows to where it is needed in the world's second-largest economy.
New Zealand’s central bank could shock investors by raising its benchmark lending rate by as much as half a percentage point at its first policy meeting of 2014, according to the world’s biggest asset manager.
The Reserve Bank of New Zealand has held the official cash rate at a record-low 2.5 per cent since March 2011, but economic growth in the third quarter accelerated to the fastest pace in almost four years and central bank Governor Graeme Wheeler signalled last week he will lift borrowing costs next year, even as he expressed concern that the currency’s strength could hurt exporters.
Higher rates may help drive the kiwi dollar close to a record-high against the Australian dollar, Stephen Miller, a Sydney-based money manager at BlackRock says.
New Zealand is set to become the first developed economy to raise interest rates since 2011 as surging milk production, manufacturing and home building stoke inflation. Traders of overnight index swaps yesterday saw a 58 per cent chance for an increase to 2.75 per cent in January with 42 per cent odds for no change, data compiled by Bloomberg show.
“First cab off the rank in terms of surprises next year might be the RBNZ hiking by 50 basis points in January,” Miller says. “New Zealand’s a pretty strong economy getting stronger. It’s one of these stories where higher interest rates are actually a harbinger of a healthier economy.”
China's benchmark short-term money rate have opened sharply lower after rates spiked yesterday, leading the central bank to announce it had injected cash directly into the market through a short-term liquidity operation (see post at 12.01pm).
The seven-day bond repurchase agreement opening quote was at 4.98 per cent, down sharply from 7.10 per cent at market close Thursday.
The People's Bank of China (PBOC) extended trading hours yesterday to give traders more time to settle trades.
At one point the seven-day repo was quoted at 9.8 per cent, while the one-year interest rate swap based on the seven day repo hit an all time high of 4.99 per cent.
NuCoal Resources denies it knew then Labor mining minister Ian Macdonald had approved a tainted mining licence.
NSW Premier Barry O'Farrell on Wednesday gave holders of corruptly approved mining licences until January 15 to convince the government not to revoke them.
His call followed an Independent Commission Against Corruption (ICAC) recommendation that mining licences for Doyles Creek, Mount Penny and Glendon Brook in the state's Hunter Valley be cancelled.
NuCoal Resources, which acquired the Doyles Creek Mining (DCM) rights in 2010, told the Australian Securities Exchange on Friday it was not aware of the "notorious public controversy" around the granting of the licence.
NuCoal said it was "entitled to assume" the licence had been lawfully granted by the minister.
NuCoal shares were down half a cent at 4.5 cents at 11.22am (AEDT) on Friday following a two-day trading halt.
In the eye of the storm: Former mining minister Ian Macdonald. Photo: Max Mason Hubers
Retailer Target will pay global make-up giant MAC Cosmetics $1 million after settling a long running legal case over the discount store’s sale of a range of allegedly fake MAC cosmetics in 2012.
Target, which is owned by Perth-based conglomerate Wesfarmers, will also run corrective advertising in its catalogues and across various social media platforms to bring to an end the court battle which saw the national retailer accused of selling fake MAC.
It is believed Target bought its potentially fake MAC from a US middle man in Texas, with that distributor then linked to an even more obscure make-up wholesaler in Arizona.
Passenger numbers at Sydney Airport have dropped slightly, despite a solid increase in international travellers.
The total number of travellers passing through the airport slid 0.1 per cent to 3.2 million in November, with a 1.7 per cent drop in domestic passengers offsetting a 3.7 per cent rise in international travellers.
Sydney Airport chief executive Kerrie Mather said there was strong growth in travel to and from Malaysia and New Zealand. There also was a rise in arrivals from India and departures to the USA, Philippines and Japan.
She said a new Sichuan Airlines Service from Chengdu and Chonqqing to Sydney would also add another 50,000 seats per year to the airport.
‘‘This service consolidates Sydney Airport’s position as Australia’s gateway to China, with 94 weekly flights to eight major Chinese cities and greater China,’’ she said.
China's liquidity squeeze is a bit in focus today, after the 7-day repo hit 9.8 per cent late yesterday afternoon, the highest since June's "cash crunch".
But reports are out that the People's Bank of China added funds to selected banks to calm money markets.
The People’s Bank of China said on its microblog it conducted short-term liquidity operations recently and will continue to supply funds to qualified financial institutions in this way based on the situation. It also extended the trading hour of the inter-bank market by 30 minutes yesterday afternoon, indicating that the situation was abnormal.
Online financial news provider Netease reported the monetary authority injected 200 billion yuan ($US32.9 billion).
The central bank intends to calm down market fears as the 7-day repo was close to double digit again, says ANZ China chief economist Liu Li-Gang:
- On the other hand, the central bank appears to understand that the market might be faced with some unusual conditions. We believe the central bank’s intervention is necessary and timely.
- Although the PBoC has attempted to act decisively yesterday, in our view, there is a need for the central bank to review its current monetary stance in order to meet the liquidity requirement towards the year end.
- While the SLO could be considered a tool to tackle the emergency needs of individual banks, the PBOC can start to conduct reverse repo again in order to lower the market interest rate
- Furthermore, the PBoC can also follow its practice in June by issuing an official statement in order to restore market confidence if needed.
Telstra’s $2 billion sale of its stake of its Hong Kong mobiles business to PCCW-controlled HKT completes what has been a lengthy and ultimately unsuccessful detour by the Australian telco, Malcolm Maiden comments:
Under the leadership of former chief executive Ziggy Switkowski it paid the equivalent of about $4 billion in 2001 and 2002, firstly take a 60 per cent stake in the Hong Kong mobile operator CSL, and then move to full ownership.
In 2006, CSL merged with another mobile operator in a deal that cut Telstra’s stake to 76.4 per cent.
Back in 2001, the seller was PCCW, a group founded by Hong Kong tycoon Li Ka Shing’s son Richard Li. PCCW had shot to prominence at the height of the 1990s telco and internet boom by taking over Hong Kong Telecom (HKT).
HKT is still a part of the Li-chaired PCCW group, and while Telstra will post a $600 million profit on the book value of CSL, that is because it has earlier written the value of the assets down.
Former Foster's boss Trevor O'Hoy, who spent more than three decades selling beer to the world, will swap pints for pills after joining the board of vitamins company Swisse as a non-executive director.
The appointment marks the rejuvenation of O'Hoy's director profile since his ejection from Foster's in 2008 in the wake of the brewer's mishandled acquisition strategy. He was also recently made chairman of pubs group Redcape and joined the board of Hotel Property Investments.
O'Hoy said he was attracted to Swisse's growth potential as well as its leading position in the fast-growing health category.
''The health and wellbeing sector is where the game is being played and where the growth is, so this is right in that spot,'' O'Hoy told BusinessDay.
New non-executive director Trevor O'Hoy (left) and Swisse chief Radek Sali. Photo: Paul Jeffers
While the local market is back in rally mode, Japanese shares are on the way down, taking a breather after strong recent gains
The Nikkei has lost 0.4 per cent, despite the yen slipping further against the US dollar, which usually boosts Japanese stocks due to the dominance of exporters.
‘‘With a supportive currency market, stocks still have room to rise with six trading days left until the end-year break,’’ Okasan Securities director Takashi Matsumoto noted. ‘‘But the upcoming three-day, holiday-extended weekend will naturally make players less aggressive and compel some position adjustments after the recent run-up.’’
Two stocks taking a beating today after profit warnings are energy management firm Energy Action (EAX) and IT services provider UXC.
EAX said its 2014 operating net profit is now expected to be in line with 2013's $5 million. It had earlier flagged a 10-15 per cent rise.
UXC flagged it was readjusting its first-half earnings expectations, saying "margin pressure and project delivery issues have had a dampening effect on underlying earnings compared to the first half of the prior year".
EAX shares are down 20.4 per cent at $3.20, while UXC has slumped 11.7 pr cent at 94.5 cents.
Some reactions flowing in on Telstra's sale of its stake in Hong Kong's CLS, which is seen as a net positive for shareholders but is raising some questions over the telco's Asian strategy.
"It is interesting considering they're looking at an Asian-expansion story, to be selling out of their Hong Kong division, but the price and what they're getting for it does seem appealing," says Evan Lucas, a market analyst at IG.
Lucas says it did raise questions about releasing an asset that was a good foothold into China, but on balance it is "a very nice pick up and good for shareholders".
Joanne Chua, investment manager at Rivkin Securities, says the purchase is positive because it increased free cash flow for Telstra:
- This is in line with Telstra strategy because, if you look at the business itself, what they're trying to do at the moment is trying to diversify and trying to build its presence in the Asia-Pacific, so it definitely is a good step for them to step into the Asia market.
- Because there are so many dynamics, there are so many different mobile companies in Hong Kong, and Telstra would think this is a really good opportunity to maximise the return on this asset.
Telstra chief David Thodey said today Asia remains an important part of Telstra's strategy and the company intended to be in the region in the long-term.
Telstra owns a controlling stake in Autohome, the owner of Chinese car sales websites, that listed on the New York Stock Exchange earlier this month with a market value of around $US3.2 billion.
Telstra shares are up 0.7 per cent at $5.145, edging closer to its October multi-year high of $5.23.
The big banks are boosting the market this morning:
- ANZ: +0.7% at $31.35
- CBA: +0.6% at $75.33
- NAB: +0.2% at $34.11
- Westpac: +0.5% at $34.53
- Telstra: +0.5% at $5.135
- BHP: -0.2% at $36.72
- Rio: -0.3% at $66.31
And here are the biggest winners and losers among the top 200:
Gina Rinehart's Roy Hill joint venture is a step closer to reality this morning after a US government agency agreed to lend $US694.4 million to the giant iron ore mine, port and rail project in Western Australia.
In its final decision on the matter, the Export Import Bank of the United States found the loan could support up to 3400 US jobs by stoking demand for US products, such as Caterpillar trucks or trains built by GE.
Despite being opposed by some North American miners, the Exim Bank decided the loan represented "a significant opportunity for American exporters to create and sustain American jobs".
The loan is a symbolic win for the $US10 billion Roy Hill project, which has taken longer than expected to secure the $US7 billion worth of finance it needs.
More than half that amount has been expected to come from export credit agencies, and Fairfax Media believes the Korean EximBank may have also approved about $US1 billion worth of loans on Monday.
The sharemarket has opened slightly higher, building on yesterday's strong rally.
The benchmark S&P/ASX200 index is up 9.8 points, or 0.2 per cent, to 5212.0, while the broader All Ords has gained 9.2 points, or 0.2 per cent, to 5211.2.
Among the sectors, gains in financials (+0.4%) and energy (+0.5%) are offsetting losses in the materials sector (-0.1%).
The local market may add to yesterday's gains, says Rivkin CEO Scott Schuberg:
- Local ASX SPI futures have rolled from the December 13 to March 14 contract, which (at 5,194) isn’t reflecting the full extent of what we should expect this morning, with cash index markets signalling a level of around 5220, which is 18 points higher than our close yesterday, possibly explained by the relief that comes with a quiet night after a US rally.
- Not seeing the Wednesday rally on Wall Street retrace or correct will have boosted confidence among those looking to trade Australian markets today.
- This is exactly the type of equity market behaviour Australian investors needed to see coming into Christmas, as the market pops back up above key technical levels that, after being breached, were looking like the makings of a grinding December sell-off.
The federal government has approved the purchase of stakes worth as much as $5 billion in power companies by State Grid Corp of China (SGCC), the world's largest state utility.
Treasurer Joe Hockey gave the greenlight to State Grid's purchase of 19 per cent of electricity supplier SP Ausnet, and 60 per cent of energy infrastructure company SPI (Australia) Assets Pty Ltd (SPIAA).
The approval comes just weeks after the Treasurer blocked the $2.8 billion takeover of GrainCorp by US agribusiness giant Archer Daniels Midland (ADM), citing national interest.
Lawyers and bankers who work in mergers and acquisitions warned that decision was likely to spook some international investors who already view Australia as a tough place to do business.
"Australia is open for business and we welcome foreign investment when it is not contrary to the national interest," Hockey said in a statement.
'Open for business' ... Treasurer Joe Hockey Photo: Peter Braig
In local news, Telstra is selling its 76.4 per cent stake in Hong Kong mobile business CSL to Hong Kong Telecommunications for $2 billion. HKT will also acquire the remaining 23.6 per cent holding from New World Development.
Telstra is set to bank a profit of $600 million from the sale. The company said the proceeds will lift its cashflow guidance from $4.6 billion to $5.1 billion this financial year.
‘‘CSL has been a strongly performing business, the compound annual revenue growth rate was 9.4 per cent over the last three years and we have gained market share,” said Telstra chief executive David Thodey.
“However, there are a number of dynamics in the Hong Kong mobiles market that means this is the right opportunity for Telstra to maximise our return on this successful asset.”
Gold prices fell 2 per cent to a six-month low overnight in a delayed sell-off after the Federal Reserve's pullback in the US monetary stimulus.
Spot gold was down 2 per cent at $US1192.10, falling for a third straight day. Following Thursday's break of the $US1200 support, the spot price was less than $US20 above the near three-year low of $US1180.71 seen on June 30. Analysts said gold will be vulnerable to a much sharper pullback if it falls below that bottom.
Bullion fell just modestly the previous day after the Fed announced a slight cut in the pace of its monthly asset purchases that marked the central bank's first step in rolling back the era of easy money that drove gold to record highs.
In last night's US session, the market reacted further, plumbing to its lowest level since June, as speculation about further stimulus taperings by the Fed heightened deflation fears.
"A lot of gold investors are anticipating deflation not inflation as a result of the Fed announcement, taking advantage of the downside momentum and shorting gold at least temporarily," said Jeffrey Sica, chief investment officer of New Jersey-based Sica Wealth.
US stocks finished mostly flat as investors paused after a rally in the previous session, though the Dow closed at its second record high in a row.
The Dow rose 11.11 points, or 0.07 per cent, to finish at 16,179.08, a record closing high. The Standard & Poor's 500 Index dipped 1.05 points, or 0.06 per cent, to end at 1,809.60. The Nasdaq Composite Index shed 11.93 points, or 0.29 per cent, to close at 4,058.14.
The Dow reached an all-time intraday high of 16,194.72 during the session, while the S&P 500 moved within 3 points of setting a new high. Both indexes are up more than 20 per cent this year, with the rally largely fuelled by the Fed's accommodative monetary policies.
"I was surprised by the Fed's decision and delighted with the market's response," said Jack Ablin, chief investment officer at BMO Private Bank in Chicago. "Today we have a normal pullback after the big move. Investors want to take chips off the table."
Shares are expected to open flat to slightly higher as investors digest yesterday's strong gains after the US Federal Reserve's decided to start pulling back its stimulus but flagged low rates for longer.
Metals stocks may be in focus after gold slid nearly 2 per cent to its lowest since late June and copper suffered its biggest fall in three weeks following the US Federal Reserve steps in winding down its stimulus program.
What you need2know:
- SPI futures up 9 points to 5,192.
- AUD fetching 88.61 US cents, 92.29 yen, 64.86 euro cents, 54.13 pence
- On Wall St (in mid-afternoon trade), S&P500 -0.1%, Dow Jones +0.1%, Nasdaq -0.3%
- In Europe, Eurostoxx +1.9%, FTSE100 +1.4%, CAC +1.6%, DAX +1.7%
- Spot gold sinks 2% to $US1194.84 an ounce
- Brent oil rises 0.6% to $US110.31 per barrel
- Iron ore slips 0.5% to $US132.70 per tonne
What's on today
Two companies are holding annual meetings today: Australian Infrastructure Fund and Funtastic Limited.
No economic reports are scheduled to be released.
Good morning. Welcome to the the final Markets Live blog of the year. We'll be taking a break until mid-January, restarting around January 13 (depending on news flow).
Contributors: Jens Meyer, Luke Higgs
This blog is not intended as investment advice
BusinessDay with agencies