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Markets Live: Healthscope IPO developments; no better offer for Country Road; ASX 200 down

Date

The Australian market has closed lower on the final trading day of the financial year

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That's it for Markets Live today.

Thanks for reading and for your comments.

See you tomorrow morning from 9.

 

Australian shares have posted double digit returns for the second financial year in a row, up 12.4 per cent over the 12 months to June 30, 2014, fuelled by record low interest rates.

At Monday’s close the benchmark S&P/ASX 200 Index was trading at 5395.7 points, while the broader All Ordinaries Index sat at 5382 points, with the biggest banks and miners higher over the 12 month period.

But it was a lacklustre end to the fiscal period. The market lost 0.9 per cent in quiet trade on Friday, to finish the month of June down 1.8 per cent. New listings included iSentia Group, Gentrack Group, Asaleo Care and Monash IVF.

“While there was a rush of IPOs coming to market in June, most of the buying was funded by institutions selling-down existing holdings so the benefit to the overall value of the index was limited,” Arnhem Investment Management head trader Simon Twiss said.

Read more

The Australian dollar had a volatile year but you wouldn't know it judging by the 2 cent rise against the United States dollar recorded over the past 12 months.

Here's a snap of how the Australian dollar fared against Group of 10 currencies - firmly in the middle.

No surprise that the winner was the New Zealand dollar which takes out the top spot on account of its dairy boom and rising interest rates.

Performance of G-10 currencies

Performance of G-10 currencies

The Australian Taxation Office is ramping up its efforts to catch Australians who park undisclosed funds in foreign countries, saying it expects to contact "thousands of people" over the coming months. 

Hundreds have already come forward as part of a new amnesty.

The ATO’s Project Do It, launched in March, had already resulted in 166 disclosures raising an extra $13 million in tax liabilities, said ATO deputy commissioner Michael Cranston on Monday.

There had also been 250 "expressions of interest" – where taxpayers identify themselves and pledge a disclosure – and 600 general enquiries, said Mr Cranston.

Read more

The S&P/ASX 200 Index finished 49.35 points lower to 5395.7 points. Its 2013-14 gain is 12.35 per cent.

Ten shares were the best performers on Monday, up 3.9 per cent.

The Australian dollar is up slightly, fetching US94.32 cents.

Clime Asset Management has penned some end-of-financial year thoughts, observing a "significant" increase in the level and range of concerning developments for global markets and the Australian economy including Iraq and Ukraine.

"Readers should compare today’s docile volatility to that of 13 months ago when volatility was significant. It was this period of high market volatility that has magically created the impression that equity markets have performed quite well in 2013-14 when in fact they haven’t...

The last eight months is indicative of the importance of income in terms of overall investment returns in the Australian equity market. Today the Australian share price index is at the same level it was in April 2007 and index investors returns over seven years have been totally generated from dividends – more so if they were judiciously reinvested."

Ratings agency Standard & Poor's has upgraded the credit rating outlook for Fairfax Media, saying the publisher had "adopted a credible strategy to stabilise group earnings over the medium term".

S&P had revised the outlook on its 'BB+' long-term rating on Fairfax to stable from negative.

This means Fairfax - publisher of BusinessDay and The Australian Financial Review - is considered less likely to default, although its debt retains a junk rating.

Read more

The Abbott government has gone ahead with its controversial roll-back of protection for consumers of financial advice despite a damning Senate report into the Commonwealth Bank financial planning scandal.

Finance Minister Mathias Cormann on Monday registered regulations negating key reforms to financial advice introduced by the previous Labor government under the Future of Financial Advice ('FOFA') banner.

However, Senator Cormann’s regulations may be disallowed by resolution of the Senate, which is not sitting this week but resumes next Monday.

If Labor and the Greens move that the regulations be disallowed, as expected, their fate will lie in the hands of cross-bench senators, including those associated with Clive Palmer’s Palmer United Party.

The regulations strike out parts of the FOFA law, due to come into force on Tuesday, that would have forbidden banks to reward their financial planners and tellers for steering customers into the institution’s own products.

Read more

Finance minister Senator Mathias Cormann

Finance minister Senator Mathias Cormann Photo: Andrew Meares

Shares of Goodman Fielder have been in a trading halt since this morning.

It has emerged that Singapore agribusiness group Wilmar International and Hong Kong investment management company First Pacific are trying to reduce their offer price for Goodman Fielder from 70 cents to around 67 cents or 68 cents a share.

After lifting their proposed offer from 65 cents a share to 70 cents a share in May and securing the support of major shareholders Ellerston Capital and Perpetual Investments and a recommendation from the Goodman Fielder board, Wilmar and First Pacific now want to reduce the offer by 2 or 3 cents a share on the grounds that additional capital investment is required.

Read more

Communications Minister Malcolm Turnbull has entered the tax debate, saying the country was far too dependent on personal income taxes and has a system that was "incredibly" favourable to older people who have made their money.

Mr Turnbull indicated that the effective top marginal tax rate of 49 per cent - which takes effect from Tuesday - is "too tough" on people earning income, as well the nation’s entrepreneurs and "people in jobs, making money in their businesses".

"There’s no question we are far too dependent on personal income tax," Mr Turnbull told a conference organised by the ANU’s Crawford School on Monday and sponsored by The Australian Financial Review. Read more

 

Despite the hyperventilation by some investment banks, the IPO market remains a tough sell, notwithstanding the lengthening line up of planned new listed investment companies as fund managers vie for their part of the pie.

Toilet paper group Asaleo floated at $1.65 at the end of last week, it is ahead just 0.6 per cent at $1.66, with the market barely able to contain its enthusiasm. Then there is Monash IVF. Floated at $1.85, the first day's high of $1.97 touched last week is but a fading dream, with the shares now down another 3 per cent at $1.74.

Even Steadfast, an insurance broker, which was quick out of the blocks following its IPO last August at $1.15, running quickly to $1.85, has run out of puff. You can pick it up today at $1.30, down 0.8 per cent.

CommSec analysis of petrol prices points to higher costs for motorists ahead.

The national average Australian price of unleaded petrol fell by 0.4 cents a litre to $1.553 in the week to June 30.

More significantly, the national average wholesale unleaded petrol price stands at $1.465/l, up around 2.3 cents over the week to the highest levels in almost four months (since March 13). The national average wholesale (terminal gate) unleaded petrol price has risen by almost 5 cents in the past fortnight.

Colombia's giant-killing run in Brazil and the star turn of its number 10, James Rodriguez, have won plenty of new fans.

There are reasons to be excited about its economy too.

AllianceBernstein finds that political volatility will recede and that makes its Colombian assets more attractive. The economy is growing fast and its central bank raised rates this month to 4 per cent. "[President Juan Manuel] Santos’ victory not only has a significant impact on the country’s political landscape but also has important implications for potential economic growth," AB said.

Colombia will benefit from an imminent index re-weighting for the main emerging market bond index, triggering greater foreign investment. 

 

James Rodriguez, Colombia's World Cup star

James Rodriguez, Colombia's World Cup star Photo: Getty Images

Household credit rose in May but personal spending went backwards, indicating the drag on consumers has not faded yet.

Reserve Bank of Australia figures show that total credit rose 0.4 per cent in the economy last month, supported by a 0.5 per cent rise from households and a 0.2 per cent rise from businesses. Personal credit declined 0.3 per cent.

ANZ's take is that "subdued credit card use and soft margin lending reflecting a persistent sense of household financial risk aversion". ANZ is more positive on the outlook for businesses, saying "strong momentum in business lending since mid-2013, buoyed by improved business conditions (low interest rates and the lower AUD) and robust corporate balance sheets are likely to eventually kick start non-mining business investment and drive business credit growth higher in the coming year".

 

 

 

Australian Competition and Consumer Commission chairman Rod Sims has described Telstra's push to remove price signalling rules as disappointing.

Price signalling involves companies releasing information on pricing to reduce competition in the market. Australia's big four banks were accused of it when they told the market about plans to pass on interest rates, until fresh laws were passed in 2012 to stop the practice.

Telstra called for a complete removal of all price signalling laws in its submission to the Harper review, which is a "root and branch" inquiry into competition policy. It was a call echoed by other bodies such as the Australian Recording Industry Association.

Read more

The BIS report overnight has sparked enormous analysis, including this story about how Australia's banks are among the world's most profitable.

Markets columnist Phil Baker has written on the findings too, seizing on the BIS's observation of euphoria in financial markets.

"Bankers have a habit of comforting themselves with facts and figures and coming up with a thousand reasons why there won’t be a repeat of all the mistakes that led to the financial crisis of 2008.

And they’re probably right; once investors lose money and learn a lesson, they are unlikely to repeat those mistakes.

The problem is, financial markets end up making entirely new mistakes and it’s those mistakes that spark the next crisis.

That theory seems to be the latest message from the bank for central banks, the Bank for International Settlements, which has warned that financial markets are losing touch with reality and another crisis could be just around the corner.

The BIS says financial markets are in a “euphoric’’ state and is calling for central banks around the world to lift interest rates as soon as they can."

Read more

 

Perpetual looked at the disconnect between global sharemarkets and the state of economies and found that central banks are key to influencing market sentiment. Perpetual's Matthew Sherwood thinks only the Bank of England will raise rates next year.

Meanwhile, massive capital management underway in the US suggests that more positive revisions to US earnings per share are ahead, which will continue to support US share prices and global market sentiment.

Buybacks in the US this year are set to topple $US600 billion.

Regional market performance past 12 months

Regional market performance past 12 months

Will the Transformers franchise rescue box office takings in 2014?

The film pulled in $US100 million in its debut weekend in the US and more than $US300 million worldwide.

Only last month Village Roadshow reminded investors how dire conditions are with a profit downgrade citing the lack of interest in the latest Johnny Depp vehicle, Transcendence.

Transformers: The Age of Extinction

Transformers: The Age of Extinction

Sales of new homes in Australia fell in May for the first time in five months, possibly a sign that the housing market may have peaked in this cycle, an industry survey showed on Monday.

The Housing Industry Association said its survey of large builders showed sales of private sector new homes fell 4.3 percent in May from April.

Still, sales grew by 3.8 percent over the three months to May to be up 21.0 percent compared with the same period a year ago.

Read more

Argentina may have survived the group stage of the World Cup but it is likely to miss a bond payment, putting the country on the brink of its second default in 13 years, Bloomberg reports.

A US court has blocked cash from being distributed until the government settles with creditors from the previous debt debacle. Read more

Meanwhile, Argentina faces Switzerland in the round of 16 on Tuesday morning.

Argentina is poised to miss a bond payment. Pictured, Lionel Messi in Brazil.

Argentina is poised to miss a bond payment. Pictured, Lionel Messi in Brazil. Photo: Reuters

The Healthscope float is edging closer to going live, The Australian Financial Review's Street Talk reports.

Healthscope’s bookrunners contacted fund managers on Monday and the IPO could be priced at up to $2.29 a share. Read more from Street Talk, including valuation analysis, here.

Meanwhile, the float of Healthscope will provide a major windfall for chief executive Robert Cooke, who is set to earn up to $14.7 million in one off payments as a result of a successful listing. Read more about Mr Cooke's remuneration here.

The company lodged its prospectus on Monday morning, it will list on July 31.

Is this it for weak United States consumer prices?

Morgan Stanley expects higher inflation in the world's biggest economy, suggesting we have seen the bottom of the CPI. MS takes a positive view on corporate pricing power, declines in housing vacancy supporting rental inflation and low short-term unemployment supporting wage inflation.

"Despite these trends, the bond market remains relaxed about inflation risks, with 10-year yields declining 50bps so far in 2014. With very low real rates, any change of Fed language should push yields higher," says strategist Malcolm Wood.

What does this mean for Australian equities?

The US housing outlook is positive for James Hardie and Lend Lease.

An uptick in consumer is good for Amcor and Brambles.

And rising rising short rates will ("eventually") be good news for QBE Insurance Group and Computershare.

The flipside is that higher rates in the US are as a rule negative for telecoms, utilities and real estate investment trusts.

US inflation appears to be forming a trough, says Morgan Stanley

US inflation appears to be forming a trough, says Morgan Stanley

Australian credit investors would do well to heed the Bank of England's advice on bank hybrid securities, writes Aquasia credit strategist Mark Bayley in The Australian Financial Review today.

"It was buried in the Bank of England's Financial Stability Report but in Box 3 on pages 33 to 35, it was clear for all to see.

The central bank was warning investors about bank hybrids, which in Europe are generally known as CoCos (contingent convertible capital instruments)...

There is a risk that investors are underestimating the probability of losses on these securities.”

Read more

No Netflix in Australia until late 2015?

It appears a long-rumoured move by the online streaming giant to the Australian market has been delayed as Netflix focuses on Europe.

Despite local rivals preparing their own video-on-demand subscription services in anticipation of Netflix’s impending assault, media industry sources have told The Australian Financial Review they don’t expect the company to begin officially operating locally until at least the second half of 2015.

Read more

The Australian Financial Review's columnist Christopher Joye writes that foreign investors are likely the key drivers of the Sydney and Melbourne housing booms, potentially buying up to 40 per cent of all newly constructed homes, and accounting for up to one in eight Australian sales overall according to UBS data.

Unprecedented levels of foreign buyer activity, combined with the ability of the $559 billion self-managed super fund sector to leverage its cash five times when making property purchases, could be two reasons why this Australian housing cycle is different to anything we’ve seen before.

Read his latest column here

 

Shares in Goodman Fielder are in a trading halt as investors wait to learn whether Wilmar International and First Pacific will proceed with their $1.4 billion takeover offer for the food group.

There has been speculation that Wilmar and First Pacific could reduce or withdraw their offer if due diligence uncovers weaker than expected sales and earnings or higher than expected asset writedowns.

Read more

JPMorgan has upgraded Wesfarmers to a neutral recommendation.

Its call is supported by poor share price performance, greater confidence in Bunnings and Coles, and a "slight increase in the possibility of capital management" this year. The broker is still worried about the outlook for Target and Wesfarmers' industrial division.

JPMorgan has a price target of $42.85 on Wesfarmers shares.

 

Comparative share price performance against ASX 100

Comparative share price performance against ASX 100

Media mogul Kerry Stokes has emerged as the largest shareholder in Capilano Honey, mopping up a large part of the Icon Brands stake sold off last week.

In early June one of Capilano's largest beekeeper shareholders sold a big line of stock and last week broker Cannacord Genuity handled a block trade on behalf of Icon Brands that saw Mr Stokes join the register.

Icon Brands held a 20.7 per cent stake and Mr Stokes has emerged with a 12.5 per cent shareholding. The billionaire executive chairman of Seven Group, Mr Stokes is well known for his ability to use creep provisions to wield influence over listed companies without paying shareholders a premium to gain control.

Read more

Kerry Stokes has emerged as a key investor in Capilano Honey

Kerry Stokes has emerged as a key investor in Capilano Honey Photo: Rob Homer

Dick Smith Holdings has confirmed that it will beat its prospectus guidance forecasts for sales in 2013-14.

Its other key forecasts are pro-forma earnings before interest, tax, depreciation and amortisation of $71.8 million and net profit after tax of $40 million.

Today, the retailer revealed sales came in at $1.228 billion.

Local stocks are poised to open flat ahead of key data locally and from both the US and China on the final day of the fiscal year.

What you need2know:

• SPI futures up 8 points to 5424

• AUD at 94.23 US cents, 95.57 Japanese yen, 69.05 Euro cents and 55.32 British pence at 6am AEST

• On Wall St, S&P 500 +0.2%, Dow flat, Nasdaq +0.4%

• In Europe, Euro Stoxx 50 -0.2%, FTSE +0.3%, CAC -0.1%, DAX +0.1%

• Spot gold down flat at $US1316.18 an ounce

• Iron ore loses 0.4% to $US94.90 per metric tonne

• LME three-month copper at $US6945 per tonne

• Brent oil up 0.1% to $US113.30 per barrel

What’s on today

Australia: May private sector credit; TD Securities June monthly inflation gauge; HIA May new home sales;

Japan: May housing stats

German: May retail sales

EU: June inflation

US: May pending home sales; June ISM manufacturing index;

China: Manufacturing PMI.

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

Your editor today is Vesna Poljak.

This blog is not intended as investment advice.

BusinessDay with wires

South Africa's Woolworths has declared its offer for Country Road best and final. 

The offer price remains $17 a share.

Earlier, BusinessDay reported that SA's Woolworths could miss ambitious synergy targets from the planned takeover of David Jones after shelling out an extra $213 million to dislodge rag-trade billionaire Solomon Lew from his Country Road foxhole.

For Woolworths, the addition of Country Road implies that the "real" premium it is paying for the David Jones acquisition goes up to 38 per cent - or 25 per cent excluding the acquisition of Mr Lew's stake in Country Road.

Investors said this could place further pressure on Woolworths management to hit their targets of squeezing $130 million a year of earnings from David Jones within five years.

Read more

Chanticleer columnist Tony Boyd reports that the country's top banking regulator has called on the government to strengthen its independence against ministerial interference that could water down its strict supervisory powers.

John Laker, the executive chairman of the Australian Prudential Regulation Authority, said the regulator should have the same protection from government interference as the Reserve Bank of Australia.

He wants to restore a system designed by the Wallis inquiry in 1998 but scrapped in 2003 under which differences between APRA and the Treasurer can be sent to mediation.

Read more at The Australian Financial Review

Australia's major banks are the most profitable in the developed world, the Bank for International Settlements says, in figures that highlight the big four's consistently high returns as an inquiry investigates competition in the sector.

The major banks' pre-tax earnings as a share of their total assets rose to 1.28 per cent in 2013, higher than 10 other developed countries, the influential BIS said in its annual report on Sunday night.

It is the fourth consecutive year in which the sector's profitability has been the highest among developed countries assessed by the BIS, including Britain, the United States, Japan and various European nations.

Read more

Quotes Search

Sort comments by:
  • What a dip of death at the end lmao!

    Commenter
    Equity Bug
    Location
    Date and time
    June 30, 2014, 5:10PM
  • "Readers should compare today’s docile volatility to that of 13 months ago when volatility was significant. It was this period of high market volatility that has magically created the impression that equity markets have performed quite well in 2013-14 when in fact they haven’t..."

    Housing boom!

    Commenter
    Allan
    Location
    Prahran
    Date and time
    June 30, 2014, 4:48PM
  • What a great year for trading it's been. Big wins long and short inc ARI, BBG, FMG, MMS, MYR, NCM, QAN, TEN, SBM, SWM, XRO, LYC. I just want to thanks all the pollyannas out there.

    Commenter
    Allan
    Location
    Prahran
    Date and time
    June 30, 2014, 4:38PM
  • Someone said 6,000 by years end. It's going the wrong way. Bears in the saddle.

    Commenter
    Allan
    Location
    Prahran
    Date and time
    June 30, 2014, 4:29PM
  • setting up for a ginormous fall at the first economic hiccup. 100% chance of that.

    Commenter
    j
    Location
    syd
    Date and time
    June 30, 2014, 3:55PM
  • Housing Boom! In full effect here in Sydney, please pull back a little so you can go higher ROFLMAO!! Higher and higer!

    Commenter
    Sydney
    Location
    Landlord
    Date and time
    June 30, 2014, 3:32PM
    • setting up for a ginormous fall at the first economic hiccup. 100% chance of that.

      Commenter
      j
      Location
      syd
      Date and time
      June 30, 2014, 3:44PM
    • We don't have economic hiccups here, no recessions, no slow downs - just ask anyone under 25.

      Commenter
      Davo
      Location
      Sydney
      Date and time
      June 30, 2014, 3:55PM
    • peak is past
      this is old news
      anyone buying now is in a falling market from a peak, worst time in the cycle

      oh and can you explain to us why this is supposed to be good news?

      Commenter
      fortune cookie
      Location
      Date and time
      June 30, 2014, 3:57PM
  • The market has lots of landmines . June 30 trading pattern unearthed few clues. or example, LNC day low 1.77 then pushed back up to 2.12 down 4c now.. It is not making money. strongly believe someone try to cover its Year End performance by not letting it goes to low. Post June 30 would be very interesting

    Commenter
    Up and Down is Norm
    Location
    Date and time
    June 30, 2014, 3:30PM
  • So the Libs are quite happy to roll back the protections against self-interested financial planners in the face of clear evidence and warnings to the contrary. Much like their approach to the clear evidence and warnings on the dangers of climate change. Yet more justification for tossing them out at the earliest available opportunity.

    Commenter
    mitch of ACT
    Location
    Date and time
    June 30, 2014, 3:22PM
    • This one I agree with, Mitch. I cannot fathom why they would do this. I can neither see the financial nor political gain. What's driving this nonsense?

      Commenter
      Gareth
      Location
      Sydney
      Date and time
      June 30, 2014, 3:36PM
    • hey @Mitch, did you read what Gillard said on the weekend that the last 3 years were about egos and not a lot to do with managing the economy?

      Time for action after that admission!

      Commenter
      craig
      Location
      Date and time
      June 30, 2014, 3:42PM
    • Yes, they must have already dug that very deep trench to hide in when the next financial scandal blows up, and given the state of the economy that could be any day now. Lots of people taking extra risk to try and get a bit of yield to counter low bank interest rates.

      Commenter
      mitch of ACT
      Location
      Date and time
      June 30, 2014, 3:50PM
  • well the fin year is at an end
    did you bet with the trend
    ASX up 6 hundred
    news the shorters dread
    the same next year and 6000 we near
    will be able to celebrate with a beer
    but 600 down
    would make me frown
    and the shorters will buy hampers
    and celebrate with champers
    so as July is welcomed in
    let the new year battle begin

    Commenter
    cyril
    Location
    Date and time
    June 30, 2014, 3:22PM
  • House prices haven't gone up in Sydney because the price increase hasnt beat inflation!

    ROFLMAO is this the dumbest thing I have ever written? Yes.

    Property prices in Sydney are rising higher and higer!

    Commenter
    Im on fire
    Location
    Date and time
    June 30, 2014, 3:12PM
    • So no rise in real terms over the last decade?

      Well done.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      June 30, 2014, 3:58PM
  • Only just thought of this, what will the ASX 200 be at the end of next financial year. I will say 5750!

    Commenter
    Mister5100
    Location
    Date and time
    June 30, 2014, 3:12PM
    • Forecasting the ASX 200 is not really reflective on the true health of the share market. The compilers of the index review the index quarterly and toss out the bad performers and bring in the new stars. On that basis, short of GFC-2, it can only do well. Even the more inclusive AllOrds is not truly reflective as the bad performers drop out as they go bust.

      Commenter
      mitch of ACT
      Location
      Date and time
      June 30, 2014, 3:28PM
    • @mitch of ACT, yes the bottom performers drop out however those stocks make up such a tiny amount of the index. 6000 will only be achievable if BHP goes above $40, the banks and TLS will also need to rise, it has nothing to do with the bottom dwellers

      Commenter
      James
      Location
      Date and time
      June 30, 2014, 3:42PM
  • I forecast gold will shoot up to $US1400 very quickly taking Gold Stocks with it. There are many little squabbles around the world at the moment, the latest being Israel and Gaza.

    Be prepared so you don't miss out!

    Commenter
    Gold Balls
    Location
    Date and time
    June 30, 2014, 2:52PM
  • I am thinking about quitting this game, have a look at my portfolio...

    ORG - short $12
    SBM - long 52 c
    FMG - short $3.75
    CBA - short $60

    How do I get out of this mess?

    Commenter
    herman
    Location
    Date and time
    June 30, 2014, 2:31PM
    • is Herman actually Allan, im confused?

      Commenter
      confused
      Location
      Date and time
      June 30, 2014, 3:04PM
    • Could be. There seem to be 2 of us. At least Herman/Allan have the imagination to come up with different names.....

      Commenter
      confused
      Location
      Date and time
      June 30, 2014, 3:33PM
    • yeah but unlike me, Allan won't own up to is dilemma which is very similar to mine!

      Commenter
      herman
      Location
      Date and time
      June 30, 2014, 3:45PM
  • "the Bank for International Settlements, which has warned that financial markets are losing touch with reality and another crisis could be just around the corner"

    Cheap money was supposed to allow an orderly deleveraging of toxic assets.

    Instead it has been used to double up on risk.

    Housing boom!

    Commenter
    Allan
    Location
    Prahran
    Date and time
    June 30, 2014, 2:26PM
    • nope. sorry house prices to keep rising. I havent been disproven so far. up up and away. to the moon!

      Commenter
      Sydney
      Location
      Landlord
      Date and time
      June 30, 2014, 2:40PM
    • Yep...It's like throwing jelly beans into a kindergarten and telling them not to eat them...How ridiculous that no limits, regulations, controls were put on the mad house. We deserve what's coming. What should have happened was hundreds went to jail, assets seized, and the whole thing rewritten. Instead we got more of the same that's made more inequity in individual and inter generational wealth. Put criminals in charge and we expected different outcomes?

      Commenter
      JohnBB
      Location
      Date and time
      June 30, 2014, 2:49PM
    • @Sydney...I think you're right because of everything that's wrong.

      Commenter
      JohnBB
      Location
      Date and time
      June 30, 2014, 3:01PM
    • Nope. total lack of understanding of how the economy works. No economist can predict what will happen, merely report on what has and could happen. Worl economy will pump up until enough people have forgotten, only then will it fall again.

      Commenter
      One World
      Location
      Order
      Date and time
      June 30, 2014, 3:01PM
  • "Europe's biggest economy has not had a single housing boom in the post-war period, he says.

    That record comes courtesy of a cultural disinterest in home ownership, progressive social housing programs, conservative banking policies and government legislation that protects and encourages long-term renters."

    Singapore also has 70% of the population living in government owned housing. If Singapore and Germany can do it why can't Australia.

    The neglect in social housing in order to maintain middle class welfare is a national disgrace.

    Commenter
    Allan
    Location
    Prahran
    Date and time
    June 30, 2014, 2:21PM
    • Singapore has government housing that is bought by the individual. It's supply (and therefore cost) are ontrolled by the Government. There is even an ethnic diversity quota for the blocks.
      Command and control by a central government . Much like China -for those who keep waiting for IT'S housing/infrastructure/manufacturing to implode.
      What I WOULD like the guvmint to do is to introduce a transaction charge on share transactions. Or is that short sighted (pun intended...)

      Commenter
      Ashley
      Location
      Clareville
      Date and time
      June 30, 2014, 3:00PM
    • ....."middle class welfare is a national disgrace".....There it is...It will never be fixed because that is the voter base. Greed, self interest win every time. Democracy works until it doesn't. Who knows what's coming but this is failing, We can all see it and we're all launching ourselves at the remaining chairs in a game of musical chairs.

      Commenter
      JohnBB
      Location
      Date and time
      June 30, 2014, 3:27PM
  • Mitch of the ACT For two months now you've been telling us all that the ASX was going to fall down lower than a pregnant ant through to June 30. So two questions. What made you think that and what is your next Nostradamic Prophecy going to be ?

    Commenter
    Goldfinger
    Location
    Sydney
    Date and time
    June 30, 2014, 1:39PM
    • @Goldfinger, the charts for each of the last 3 years showed a surprisingly consistent fall of 8% from the highest point in the May to June period through to 30th June. I am as much surprised as I am disappointed that the expected big fall was muted. I was after some year-end bargains. Perhaps that was another part of the mitch effect playing out. As for my next prediction, well as I said earlier the charts for most years, except 2011-12, showed a rise from July onwards after the 8% falls. Perhaps the same should happen this year but with all of the uncertainty after the Budget and the big cuts to disposable income contained in it, I think the prospects of a good rise are much reduced.

      Commenter
      mitch of ACT
      Location
      Date and time
      June 30, 2014, 1:51PM
    • @Goldfinger, Nostradamus spoke in riddles so you would never really know if his predictions ever came to pass. I try to speak as plainly as I can and present the evidence on which I make my "predictions". Beat that if you can.

      Commenter
      mitch of ACT
      Location
      Date and time
      June 30, 2014, 2:02PM
    • I recall that his prediction of falls was mainly across the banks that have traditionally dropped in this period every year for the last several years (ANZ, WBC, NAB). From their April highs, they have dropped 4.4%, 5.4% and 11.11% respectively. They didn't fall quite as far as he thought, and obviously going ex-div is part of the reason, but anyone who sold them at their peak opting for the capital gain rather than the divs, with the intention of buying back in again some weeks later, would be better off than someone who didn't. So I wouldn't exactly go saying his prediction was wildly inaccurate.

      Commenter
      Gareth
      Location
      Sydney
      Date and time
      June 30, 2014, 2:06PM
    • @Gareth, the banks going ex-div is part of the story. Around 170 property and other trusts went ex-div distributions on Thursday 26th June and the full extent of the ex-div factor has not yet washed through. In fact some have stood up surprisingly well. Could have something to do with low interest rates.

      Commenter
      mitch of ACT
      Location
      Date and time
      June 30, 2014, 2:32PM
  • 20,000 WHC for me @ $1.44, bargain

    1,000 BHP @ $36.23, growth and dividend

    Commenter
    Roger Allan
    Location
    Date and time
    June 30, 2014, 1:35PM
    • I've never considered BHP a particularly strong one for dividend. It's only the last year they lifted it a bit, and even then it's still only around 5.1% grossed up. Better than a bank I guess, but if chasing dividends is your thing, BHP wouldn't be on many people's radar. As for growth, sure...maybe...

      Commenter
      Gareth
      Location
      Sydney
      Date and time
      June 30, 2014, 1:50PM
    • Good luck.
      Imtersting, i put a trade post in and it got rejected? now you've gone thru. i asked for a reason and got rejected...censored trades?? puzzling.

      Commenter
      BearshapedBull
      Location
      Mugpunters Lounge
      Date and time
      June 30, 2014, 2:05PM
  • “IMF research shows that of the nearly 50 systemic banking crises in recent decades, more than two thirds were preceded by boom-bust patterns in house prices,” said Dr Min Zhu, deputy managing director of the IMF."

    The current inflated house prices are not the new norm, not a new paradigm and not a new plateau, they're a bubble.

    Don't say you weren't warned.

    Commenter
    Allan
    Location
    Prahran
    Date and time
    June 30, 2014, 12:54PM
    • The housing bubble will of course weight heavily on China, Hong Kong, Australia, Canada, etc. when it comes crashing down. But from a global economy point of view I think there's greater forces at play at the moment. For China is looking surprisingly steady at the moment despite her various bubbles and collateral scams. The real worry at the moment is the US. Spiraling debt, no growth in the economy, and absolutely no trust in her hopeless leadership ... I think they're in for a rough one. Add to this that we have a re-establishment of the Caliphate after 100 years absence in the Middle East, and a particular nasty one too. It will get rough from here onward.

      Commenter
      Dr No
      Location
      Sydney
      Date and time
      June 30, 2014, 1:25PM
    • OK, I am now officially warned. Can you stop harping on aboiut it?

      Commenter
      We hear you
      Location
      Broken Record
      Date and time
      June 30, 2014, 1:31PM
    • Sydney house prices- their never gonna die. yeah yeah. yeaaaaah yeah!

      Commenter
      Prices
      Location
      to keep rockin and a rollin'
      Date and time
      June 30, 2014, 1:31PM
    • Just bought 20,000 MVP @ $1.72

      Commenter
      clive
      Location
      Date and time
      June 30, 2014, 1:38PM
    • @clive, you meant MVF?

      Commenter
      Oliver
      Location
      Sydney
      Date and time
      June 30, 2014, 1:52PM
    • yes mate, thanks for that!

      Commenter
      clive
      Location
      Date and time
      June 30, 2014, 2:05PM
    • nope. no bubble. no crash on the current horizon. but keep chirping. chirp chirp chirp. all the while little pockets all over sydney are seeing some fantastic results on property prices. dont be mad brah!

      Commenter
      Sydney
      Location
      Landlord
      Date and time
      June 30, 2014, 2:05PM
    • Allan,
      Your posts fail to take into account that China's housing market is seeing substantial improvements in the type of housing and hence the cost of supply.
      Australia is in a different scenario except that 1 our housing is expensive to build and 2 our houses are some of the largest in size; hence our houses will be relatively more expensive.

      Commenter
      Econorat
      Location
      Sydney
      Date and time
      June 30, 2014, 2:33PM
    • @clive, I've got my eyes on MVF as well. still haven't make up my mind. How much do you think it is worth? fully valued at @1.7 or undervalued, why?

      Commenter
      Oliver
      Location
      Sydney
      Date and time
      June 30, 2014, 2:56PM
    • Nope. The reduction in land size covers the extra build cost by 2:1.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      June 30, 2014, 4:04PM
    • One trick pony.

      Commenter
      Yee Har
      Location
      Date and time
      June 30, 2014, 4:10PM
  • ASX 200 down?

    Saw the title and heart skipepd a beat :) Ahh yes, the ASX 200 index is down.

    Heart recommenced beating normally 30 seconds later....

    Commenter
    ALittleToTheRight
    Location
    Date and time
    June 30, 2014, 12:33PM
  • We should be able to see some growth in Jul, right? I don't think AU economy is that bad.

    Commenter
    Oliver
    Location
    Sydney
    Date and time
    June 30, 2014, 12:17PM
    • The economy is in good hands so your money is safe but the growth will be limited to stocks that are under-valued like BHP, RIO, FMG.

      Banks and the other yielders like WOW and TLS will get a small jump and still give you good dividends.

      Look at stocks that have been smashed to give you a good ride early in FY 2014/15. TRS, QBE and MMS spring to mind and FXL is one on my radar!

      Commenter
      Peter
      Location
      Date and time
      June 30, 2014, 12:46PM
    • 2011-12 was the only year since 2009-10 that the ASX failed to climb steadily from July. Given the contractionary nature of the Budget and its effect on disposable income, we could see the decline in June continue.

      Commenter
      mitch of ACT
      Location
      Date and time
      June 30, 2014, 12:57PM
  • Mitch talks about the mitch effect of selling shares only to see them rise. On Friday I had to sell some shares for losses and had to decide between Qantas or TEN. With no real conviction either way I decided to sell the TEN. So when I clicked on this morning and looked at the ups and downs how inevitable was it that the top performer was TEN, and the biggest drop for the day was Qantas. Not big $$$ involved so humorous more than anything but its the darned inevitability of it all that gets me!!!!

    Commenter
    mitch isn't the only one
    Location
    Date and time
    June 30, 2014, 12:12PM
    • You've gotta laugh, hey? I also have the Mitch effect more often than not. It makes you feel like every single broker keeps an eye out specifically for your trades! Sorry to hear about it what happened and thanks for sharing. Reassure yourself that you're certainly not alone.

      Commenter
      Gareth
      Location
      Sydney
      Date and time
      June 30, 2014, 12:28PM
    • GXL and DUE both shot up about 20 minutes after I sold them....

      Commenter
      confused
      Location
      Date and time
      June 30, 2014, 12:29PM
    • Unfortunately we are all part of the ALGORITHM.
      We sell they buy and vica versa.

      Commenter
      Its All About Making Money
      Location
      Lennox Hd
      Date and time
      June 30, 2014, 12:39PM
    • Take it from good old mitch himself that even worse is the takeover offer at a substantial premium that lobs a day or so after you sell. I usually sell a small parcel first just to see if I can use the mitch effect to trigger a big price rise. Conversely when buying shares.

      Commenter
      mitch of ACT
      Location
      Date and time
      June 30, 2014, 12:45PM
    • LOL guys, thanks for the replies I don't feel that bad after all.

      Commenter
      mitch isn't the only one
      Location
      Date and time
      June 30, 2014, 12:47PM
  • Germany isn't the only country breaking renewable energy production records.

    Ireland can now meet 50% of its energy from wind power alone.

    http://www.irishexaminer.com/business/wind-energy-meets-target-of-supplying-50-of-electricity-needs-272263.html

    I'm sure Smokin' Joe is very offended.

    Commenter
    Fred
    Location
    Date and time
    June 30, 2014, 12:10PM
  • What does the ASX typically do on the last day of FY? Do people normally want to sell or buy for tax reasons?

    Commenter
    Gumly
    Location
    Mackay
    Date and time
    June 30, 2014, 12:08PM
  • Good news today for the BDR faithful.

    Watch the price jump as the short squeeze begins.

    Commenter
    The Accountant
    Location
    Date and time
    June 30, 2014, 12:08PM
    • I hold a middlish parcel of BDR shares. The companies numbers look very good, the SP performance less so. I hope you're right but I'm sceptical.

      Commenter
      Yin or yang
      Location
      Date and time
      June 30, 2014, 3:28PM
  • Could someone please explain how the 'grossed up' yield is calculated. I realise you add the div to the franking credits, but could you quote an example. For example, if TLS has a 7% yield, how is the 'grossed up' yield calculated from there? Assume 100% franking.
    Thanks

    Commenter
    Gumly
    Location
    Mackay
    Date and time
    June 30, 2014, 12:07PM
    • 0.07 + (0.07 X (30/70)) = 0.10

      Commenter
      TP
      Location
      Date and time
      June 30, 2014, 12:19PM
    • Gumly, at 100% fully franked (30% at the moment 28.5% after 1 July 2015), you divide the annual dividends by 0.7. So for example, Telstra's assumed 14.5c dividend twice yearly works out to 29c per annum fully franked. Divided by 0.7 makes it an unfranked (or grossed up) dividend of about 41.4c per annum. On the current price of $5.25, that's a grossed up yield of 0.414/5.25 = 7.9%. That's the value best used for a one to one comparison with say a bank's interest rate.

      Commenter
      Gareth
      Location
      Sydney
      Date and time
      June 30, 2014, 12:20PM
    • TP's formula gets the same result. I have no idea why he would want to use a more complex method.

      Incidentally, when the top company tax rates does go to 28.5% on 1 July 2015, you would use 0.715 to gross up rather than 0.7

      Commenter
      Gareth
      Location
      Sydney
      Date and time
      June 30, 2014, 12:34PM
    • Gumly, for 100% franked (this financial year), multiply the dividend by 10/7 to give you the gross yield. Like Gareth said, your gross yield is the comparable yield against bank interest.

      Commenter
      Sticks
      Location
      Date and time
      June 30, 2014, 12:39PM
    • Sorry, just to explain further, if you don't actually know the dividends you can still do the same with the yield. So in your example, a 7% yield fully franked you would still divide by 0.7 to get the grossed up yield. Hence, 0.07/0.7 = 10%

      Commenter
      Gareth
      Location
      Sydney
      Date and time
      June 30, 2014, 12:39PM
    • Thanks Gareth. A great help. I have 'cut and pasted' your comments for my own records!

      Commenter
      Gumly
      Location
      Mackay
      Date and time
      June 30, 2014, 12:41PM
  • LNG price spike is over. Reality sets in.

    Commenter
    Allan
    Location
    Prahran
    Date and time
    June 30, 2014, 12:06PM
    • Your short must be doing really well where is the bottom?

      Commenter
      James
      Location
      Date and time
      June 30, 2014, 12:13PM
  • A run on the banks in Bulgaria is gathering pace... not receiving much attention in Australia, but shows that the crisis in Europe never ended

    Commenter
    Fred
    Location
    Date and time
    June 30, 2014, 12:02PM
  • is it time to pick up some QAN?, investors cashing in their losses for the FY.

    Commenter
    intelligent
    Location
    investor
    Date and time
    June 30, 2014, 11:50AM
    • @ 1.05 would be a good entry.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      June 30, 2014, 12:07PM
    • I disagree with Allen ... he is always negative.
      Qantas is a good business, just needs to have good labour relations, and have the Qantas Sale Act ripped up.
      However, Warren Buffet would say if you are considering buying airline shares, go take a cold shower to get over that impulse.

      Commenter
      Pistol Pete
      Location
      Date and time
      June 30, 2014, 12:26PM
    • My last buy was at 1.04,. What's negative about that? Closed for 27%. A positive I'd say.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      June 30, 2014, 12:52PM
    • closed? long? i thought you were short. anyways doesnt matter.

      Commenter
      Gee
      Location
      up, is this really?
      Date and time
      June 30, 2014, 1:04PM
    • Where you been gee up? Yep, short @ 1.90 over a year ago. Try to keep up.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      June 30, 2014, 1:38PM
  • Australian share market down

    Australian new home sales down

    Australian investment property rental yields down

    Australian household DEBT up

    What a joke! LOL

    Commenter
    So Typical
    Location
    Date and time
    June 30, 2014, 11:40AM
    • Not if you can trade properly. ABP, PPT CTX CPU SYD, all up average 20%. Where have you been looking?

      Commenter
      intelligent
      Location
      investor
      Date and time
      June 30, 2014, 12:12PM
  • So the government believes the age of entitlement isn't over for the aluminium industry. They deserve special treatment.

    Why should this industry be propped up when no support is given to the car industry, food processing, agricultural exporters, manufacturers?

    How come for some it's 'adapt or perish', but for others its 'no worries, we'll prop you up'

    Commenter
    Fred
    Location
    Date and time
    June 30, 2014, 11:38AM
    • Because Aluminium workers aren't earning $180k+ per annum union arranged salaries/wages to piece cars together like their car industry counterparts that were bleeding taxpayers dry.

      Commenter
      ALittleToTheRight
      Location
      Date and time
      June 30, 2014, 12:31PM
  • CKF (or should that be KFC?) Ex div 2/7/14 about 5.1% fully franked. 6c div. Buffettesque being a well know set of brands with increased earnings and 10% rise in div from last year.

    Commenter
    IT's All About Making Money
    Location
    Lennox Hd
    Date and time
    June 30, 2014, 11:30AM
    • Their planned growth in earnings doesn't take into account the drop in disposable incomes from Budget measures. Good luck.

      Commenter
      mitch of ACT
      Location
      Date and time
      June 30, 2014, 11:46AM
    • @mitch.... "he was told that the peasants had no bread, and who responded: "Let them eat chicken."" apologies to Rousseau.
      It would be an interesting study to see if KFC were eaten more in times of deprivation or in times of affluence.

      Commenter
      It's All About Making Money
      Location
      Lennox Hd
      Date and time
      June 30, 2014, 12:13PM
  • CZZ .. is having Stokes as a stealthy mogul , with an under the counter takeover good for the business or bad ? will other stakeholders now bid up the price as it is a target ?

    Commenter
    Lean Too
    Location
    Date and time
    June 30, 2014, 11:20AM
  • MVF below floating price, any thoughts?

    Commenter
    Oliver
    Location
    Sydney
    Date and time
    June 30, 2014, 11:07AM
    • My thoughts are in the form of questions.

      1. What's it really valued?

      2. With only one another major competitor, how will they grow? It can't just be trying to steal market share from one another.

      I'm undecided on this type of new float/stock.

      Commenter
      GS
      Location
      Date and time
      June 30, 2014, 11:18AM
    • brought in friday 1.83 and 1.79 one for my growth strategy,fully valued maybe ,looking at 12month hold accum.might get cheaper market will decide light vols so far today.

      Commenter
      BearshapedBull
      Location
      On the Fence
      Date and time
      June 30, 2014, 11:19AM
  • Word of the day "Lacklustre"
    didnt expect anything else...a fizzle to end the year.maybe a bargain this arvo to watch for.

    Commenter
    BearshapedBull
    Location
    On the Fence
    Date and time
    June 30, 2014, 11:05AM
  • I'm not usually a betting man but during a lovely dinner on the weekend I bet a very bullish iron ore analyst friend of mine that ore will hit $85 a tonne before Christmas.

    Which side of the stake would you be on?

    Commenter
    Jimmy
    Location
    Date and time
    June 30, 2014, 10:48AM
    • Lower than $85. It's in abundance and it shouldn't cost anywhere near that to produce. In other words, it's only that price because the supply chain hasn't reached demand...When that happens...Plunge.

      Commenter
      JohnBB
      Location
      Date and time
      June 30, 2014, 11:03AM
    • $85 or less is on the cards.

      Commenter
      Liberator
      Location
      SEQLD
      Date and time
      June 30, 2014, 11:57AM
    • not a chance iron ore will go below $85.

      Commenter
      You heard it here
      Location
      first!!!
      Date and time
      June 30, 2014, 3:18PM
  • Market opens lower. At 9.50am the market was at 5464 and is now 48 points below. What a joke the ASX is. Someone is having a lend.

    Commenter
    Macca
    Location
    Sydney
    Date and time
    June 30, 2014, 10:36AM
    • Did you expect the market to rise? If so, why?

      Commenter
      Irish Phil
      Location
      Date and time
      June 30, 2014, 10:47AM
    • last day of financial year - sell-offs will happen for reductions in assesable income.

      Commenter
      Sam
      Location
      Date and time
      June 30, 2014, 10:51AM
    • What's with this ASX joke thing...It's a market...People buy and sell according to what they think it's worth...Nothing more or less....There are forces pushing people into over priced assets and that's reached a peak. The market probably cannot go higher unless interest rates fall again. PE ratios are way stretched and future earnings are in BS territory. Buy palladium, oil and wheat. Bargains pushed aside by irrational behaviour.

      Commenter
      JohnBB
      Location
      Date and time
      June 30, 2014, 10:58AM
    • Whatever happens today will be reversed tomorrow, as the books are set & correctly weighted depending on view.

      Commenter
      Pistol Pete
      Location
      Date and time
      June 30, 2014, 12:29PM
  • @bored....Palladium up and up and up....Sorry you're cynical and can't see great trades when they're presented.

    Commenter
    JohnBB
    Location
    Date and time
    June 30, 2014, 10:31AM
    • When and where did I say it's not a great trade?

      Commenter
      bored
      Location
      Date and time
      June 30, 2014, 10:50AM
  • Perhaps we so often see 'light trading' these days because there is so much trading going on in 'dark pools'. I read a suggestion the other day that as much as 40% of trades now go through dark pools. The trading is going on, just not on the official stock exchanges.

    Commenter
    Fred
    Location
    Date and time
    June 30, 2014, 10:30AM
    • The dark pool iceberg

      http://www.nytimes.com/2014/06/29/opinion/sunday/lawsuit-against-barclays-shows-need-for-more-scrutiny.html

      Commenter
      Fred
      Location
      Date and time
      June 30, 2014, 10:47AM
    • there is a move afoot in usa to ban/restrict the use of these...as the complete lack of transparency rings alarm bells.we'll see i guess.

      Commenter
      BearshapedBull
      Location
      Mugpunters Lounge
      Date and time
      June 30, 2014, 11:34AM
  • Australia's major banks are the most profitable in the developed world, That is pre-tax numbers, maybe they do not know how to screw the tax system as good as the other ones

    Commenter
    statistics
    Location
    brisbane
    Date and time
    June 30, 2014, 10:28AM
    • Australian banks are run for the shareholders. Most foreign major banks of equivalent size pay stupid bonuses and run the company for the employees. If I make $6b and give $5.9b to employees as bonuses you can't really say that the business only makes $100m profit, it just isn't sharing the profit with shareholders.

      Commenter
      FANATICAL
      Location
      Diablo2
      Date and time
      June 30, 2014, 10:49AM
    • most banking CEO's arent doing too badly averaging about $150K a week.
      I dont imagine the board are paid too shabbily either. not high by world standards but nothing to be sneezed at

      Commenter
      smilingjack
      Location
      Date and time
      June 30, 2014, 11:10AM
  • CountPlus (CUP) confirm yet another 3c quarterly div in July for a total yearly div of 7% (franked up to 10) with CBA holding almost 40%... I don't get why they are still $1.74 and not closer to $2... YIELD MAN!!!!

    Commenter
    GS
    Location
    Date and time
    June 30, 2014, 10:09AM
    • There are better yielders, and part owned by CBA. Shouldn't need to say more. Nevertheless I hold a few and will top up when the price is right.

      Commenter
      mitch of ACT
      Location
      Date and time
      June 30, 2014, 10:50AM
    • Just to complicate the issue remember to take into account that franking credits cannot be claimed until the next tax return is lodged. For an individual expecting a fully-franked dividend in July 14 eg from NAB or WBC , the franking credit cannot be claimed until July 15 at the earliest. For an SMSF the earliest date the franking credit would be received is April 16, that's 18 months later or even longer taking into account the loss of staff to do the processing at the ATO. That can be a reduction of up to 1.5 times CPI. Combine that with the risk of holding shares in a declining economy, the immediacy of bank interest doesn't look so bad.

      Commenter
      mitch of ACT
      Location
      Date and time
      June 30, 2014, 12:50PM
    • Mitch, could you expand on that? Say I received $2,000 fully franked in divs from a bank between Jun 13 to Jul 14. That's $2,857 before franking (so $857 went to the tax man for FY2014). So unless I'm under the 30% tax bracket (under $37k per year income) I wouldn't be able to claim anything back. In fact, I have to top up that 30% tax already taken from my div. Have I misunderstood?

      Commenter
      Gareth
      Location
      Sydney
      Date and time
      June 30, 2014, 1:22PM
    • @Gareth, you would pay tax in 2014 on the 2013 $2000 div + $857 franking credit at your marginal tax rate plus medicare levy then claim a franking credit back of $857.

      Commenter
      mitch of ACT
      Location
      Date and time
      June 30, 2014, 1:58PM
Comments are now closed