ASX 200 Stock Trading Report

ASX 200 4874.8 (+0.92%)

SPI Futures 4899.0 (+0.93%)

1. S&P/ASX 200 +44.6 points today. Largest contributions from Financials +1.5% and materials/energy up >0.9%.

ASX 200 4874.8 (+0.92%)

SPI Futures 4899.0 (+0.93%)

Overseas Headlines:

1. Japanese CPI figures have not fallen as sharply as expected. Deflationary fears will be met with easing Monetary Policy MP below 0.1%. It is not quite clear just what sort of an impact the BOJ expects from prices in their minutes to the MP meeting, however Japan remains the text book example of how MP becomes a blunt instrument.

2. There are mixed signals over the pricing mechanism of the Yuan. Despite a lot of offshore pressure the Chinese do not seem to have a clear picture over their stance on the matter, or at least they are not publicising it. The Americans over the past week have been very vocal about the impact pegging the Yuan has on global financial markets. Within the walls, however, there is misleading indications from the Bank (People’s Bank of China), the ministry (ministry of Commerce) and state councils leading one to believe that they have not sincerely assessed the impact of pricing mechanisms on global demand for Chinese products. Reinforcing their reputation as a very internal looking, corporation influenced macroeconomic policy maker. Not to mention the wealth of empirical evidence on Exchange Rate Mechanisms (ERM) and how they have been attractive for extreme speculation, the perfect example being Soros and the British Pound. ERM over the Yuan pegged to the USD means that not only can China manage the price of exports relative to trading partners but they can mange prices they pay for imports and the value of debt held in foreign dollar terms. Debt held particularly US treasuries.

3. Chinese Steel demand expected to double by 2010. According to Iron Ore chief from RIO Sam Walsh. An important indication for Iron Ore producers. RIO and Chinalco continue to talk of pursuing projects despite Stern Hu being trialed over Iron Ore negotiations in a closed court. The event seems to have become a triviality for corporations. RIO and Chinalco confirmed today talks of a joint development for a copper and gold mine in Mongolia . Aluminium Corp of China announced it is likely to record a 500,000T surplus of Aluminium for this calendar year. Forecast to be 17.5milT in aluminium production and 17milT consumption.

4. US Gaming stocks exposed to Macau have done well overnight. Las Vegas Sands (LVS.NYSE) +7.49% MGM Mirage (MGM.NYSE) confirming what was suspected last week that hotel visits in Macau is encouraging signs for spending in casinos. CWN $8.30 is still recuperating from losses in Vegas however has a foot in Macau . Galaxy Entertainment Group Ltd. (GXYE.Y) (HK:27) Wynn Macau Ltd. (HK:1128) (WYNM.Y) SJM Holdings Ltd. (HK:880) Melco International Development Ltd (MDEVF) (HK:200) Sands China Ltd. (HK:1928) are other direct investments in Macau.

Data Tomorrow:

1. Japan:

Merchandise Trades exports YoY survey 45.7 vs. prior 40.9

Merchandise Trades imports YoY survey 33.0 vs. prior 9.1

Merchandise Trades Balance survey ¥560.6bil vs. ¥prior 63.0B

2. HK:

February exports YoY survey 25.3% vs. prior 18.4%

February imports YoY survey 26.0% vs. prior 39.5%

Trade Balance February survey -32.8bil vs. prior -29.5bil

3. US:

Existing home sales February survey 5.00mil vs. prior 5.05mil

Existing home sales February MoM survey -1.1% vs. prior -7.2%

CFD Intraday Trade Idea – Commonwealth Bank Of Australia (CBA)

Selection of ASX stocks likely to move on an intraday basis.

Our preference: as long as 46 is support, we are bullish. In this case, the upside breakout of 49.6 will trigger a bullish acceleration towards 52.6.

Alternative scenario: a downside breakout of 46 would open the way to 43.65.

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Tricom Today Australian Stock Report 9-4-09

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The SFE Futures suggested a 45 point rise in the market. BHP and RIO mixed in ADR form overnight BHP down 0.31% and RIO up 4.58%. (BHP closed at the equivalent of 3178c, up 36c yesterday’s close.) Metals all up overnight – Copper up 0.48%, Zinc 1.48% and Aluminium 1.15%. Nickel up 0.64%. Oil price up 0.5% to $49.37. Gold up $2.60 to $885.90. Bonds down with the 10 year yield up to 2.8596%. A$/US$ down 0.08% to 70.98c.

Nasdaq outperformed on the hope that a recovery in business spending will boost technology stock’s profits. IBM up 2.5% and Qualcomm up 2.2%. Security regulators voted to seek public comment on five proposals to curb
shortselling. Chrysler’s chairman said the government’s May 1 deadline for completing a deal with Fiat is “ample time”. Homebuilders up – Pulte Homes made a bid for Centex Corp from $1.3bn which would create the largest US homebuilder. Centex up 19% and Pulte down 10.5%. Bloomberg data suggests EPS across the S&P500 will fall 37% this quarter and another 30% next quarter. Juniper Networks preannounced quarterly results that were inline with expectations and the company’s prior forecasts.

The market is up 22. The SFE Futures suggested a 45 point rise this morning. All sectors bar telecom and healthcare up. Property leading the way – up 2.9%. Banks mixed – NAB down 1.4% and CBA up 1.4%. BOQ down 4% on 1H results. Resources up – BHP and RIO up 1.3% and 1.5%. Major gold stocks down despite the $2 rise in the gold price.

Financial Institutions, Market Cap, 1999-2009

Fascinating infographic via the FT on the top twenty financial institutions, according to market cap.

Click either of the graphics to reach the interactive charts, and then use the slider to see the changes take place.

1999: Top 20 Financials by Market Cap

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2009: Top 20 Financials by Market Cap

Source: The decade for global banks

Tricom Today ASX Stock Market Report 30-3-09

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The SFE Futures suggested a 37 point fall in the market. BHP and RIO mixed Friday in ADR form – BHP down 5.15% and RIO up 1.38%. (BHP closed at the equivalent of 3333c, down 68c on Friday’s close.) Metals mostly down Friday - Copper down 0.86%, Zinc up 0.15% and Aluminium down 1.59%. Nickel down 0.26%. Oil price down 2.7% to $52.41. Gold down $16.80 to $923.20. Bonds unchanged with the 10 year yield at 2.7607%. A$/US$ down 0.04% to 68.96c.

No major news or announcements Friday. Stocks up 6.2% for the week. Widespread weakness. Financials up 12.2% for the week. Commodity stocks down on lower oil and metal prices. May oil futures down 3.6%. Material and energy stocks down 2-3%.General Motors up whilst announcing they are offering union members $10bn in preferred stock with a 9% coupon and $10bn in cash amortized over 20 years.IBM posts a gain. February personal income and spending in-line. Real personal consumption down.

The market is down 51 underperforming the 37 point fall predicted by the SFE Futures this morning. All sectors are down. Resources fairing the worst. BHP down 3.2%. RIO is the sole hero holding the market up a few index points. Banks down – only WBC up 0.7%.

Tricom Today ASX Stock Market Report 16-3-09

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The SFE Futures suggested a 26 point rise in the market. BHP and RIO both up in ADR form Friday – 2.30% and 0.8% respectively. (BHP closed at the equivalent of 3186c, up 20c on Friday’s close.)Metals mostly up Friday – Copper up 2.51%, Zinc down 0.16% and Aluminium up 0.52%. Nickel up 1.53%. Oil price down 1.5% to $46.22. Gold up $6.10 to $930.10. Bonds down with the 10 year yield up to 2.8921%. A$/US$ down 0.5% to 65.475c. Obama announced a $730m package to provide assistance to small business owners. The government also plans to increase the government guarantee on some small business administration loans to 90%. They will also boost bank liquidity with
$10bn in an attempt to unfreeze the secondary credit market. Healthcare – the largest sector in the S&P 500 – up 3.3% after recent heavy selling pressure due to fears over government reform. Energy down the most – fell 0.7% on the lower oil price. OPEC’s meeting over the weekend only created more uncertainty about demand and stabilizing prices. They did not make a cut to production but urged their members to stop overproducing. The market is up 16 in-line with the 26 point rise predicted by the SFE Futures this morning. A pretty flat start to the week with not a lot of significant news around. Resources struggling, Property Trusts and Banks doing well.

The Banking Sector Wrap

The Big Four Australian banks outperformed the index this week (ending Thursday) marking an average 2.9% increase to a 1.5% lift in the ASX 200. The week began in a familiar dour mood for the broad market but spirits were lifted following a big one-day rally on Wall Street on Tuesday. Financial stocks led the rally in the US, spurred by a (spurious) claim from part-nationalized and arguably insolvent Citigroup that the bank registered an operational profit in both January and February (before write-downs).The two bigger banks of the Big Four – Westpac (WBC) and Commonwealth ((CBA)), which are deemed to be of sounder balance sheet – were the stars for the week, posting 5% gains. ANZ ((ANZ)) limped in with a 1.5% gain while National ((NAB)) didn’t much trouble the scorer.

From a sector-wide perspective, it was left to head bull BA-Merrill Lynch and head bear ABN Amro to once again air their differences. Last week Merrills lifted its banking sector rating from Neutral to Overweight, arguing that the margin outlook for the Big Four had never been better. This week the analysts took time to reiterate their stance, suggesting healthy margins on commercial and housing lending will offset the headwinds of higher bank funding costs in FY09.

Last week ABN Amro (Underweight for some time) argued that any revenue improvement would be offset not by funding costs specifically, but by increasing bad debts. It’s a bit of a coin toss for the unopinionated – Merrills believes bad debts will not reach heights that will undermine revenue growth from increased market share, while a more pessimistic ABN looks to 1992 for reasons to believe bad debts in the GFC are only just beginning to grow. It will all come down to just how bad the recession in Australia becomes.

And don’t believe we are not now in a recession.
This week ABN decided to attack the left hand side of the equation, suggesting that while the Big Four are indeed enjoying improved revenues at present, the joy is not likely to last. Again the analysts turn to the experience of the 1990s.

In 1990 as Australia began to tip into recession following the crash of 1987 and subsequent crash in commercial property, the Australian pillars were enjoying excess revenue growth of 7%, ABN notes. By the tail end of the recession, revenue growth had fallen to 6% below average. With corporations likely to pull in their capital expenditure, the analysts expect lending to slow and revenue growth to become “anaemic”. Bad debts will peak in FY10, the analysts suggest.And don’t forget Westpac only survived 1992 because Kerry Packer stepped in.

On an individual bank basis, ABN has decided that NAB’s exposure to the basket case that is the UK, along with the still unresolved issue of toxic CDOs on the balance sheet, provides enough risk concern to prompt a downgrade from Hold to Sell. ABN’s target price falls from $18.96 to $14.97.

The good news is that relative price movements see ABN upgrade Westpac from Hold to Buy, but with little change in target. This puts Westpac streets ahead with five Buy ratings in the FNArena database, ahead of NAB with two, and ANZ and CBA with one each. (Note that ratings reflect current share prices against target prices and not necessarily overall quality).

Macquarie Group ((MQG)) also came in for an upgrade this week with Aspect Huntley lifting its already positive view by one notch to Buy, from Accumulate. Macquarie shares remain the target of shorters who continue to find ways around the ban on shorting financial stocks in Australia. No coincidence thus that both Macquarie and Suncorp-Metway ((SUN)) shares enjoy more buy ratings than all other banks outside Westpac: it’s not quality, but the larger price discount that makes up the big difference.

Tricom Today ASX Stock Market Report 4-3-09

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The SFE Futures suggested a 25 point fall in the market this morning.BHP and RIO both up in ADR form overnight – up 4.44% and 0.84% respectively. Metals mostly up overnight – Copper up 4.55%, Zinc up 3% and Nickel 1.05%.
Aluminium down 0.23%. Oil price up 3.7% to $41.57. Oil managed to hold early advances but trading was volatile after the last few weeks of losses in the face of a continuing synchronized global downturn. Gold down $26.40 to $913.60. Bonds down with the 10 year yield up to %2.88255. A$/US$ up to 63.73c. January Pending home sales down 7.7%- worse than the 3.5% expected. Job losses
are continuing and consumer confidence remains at all-time lows. Treasury secretary Geithner reiterated in Congress that Obama’s budget deficit was required to make long-term investment in healthcare, energy and education – the comments didn’t support market buying. The market is down 47 – bit disappointing considering the 25 point fall predicted by the SFE Futures this morning. Industrials the only sector up with Brambles outperforming, but most sectors struggling, most notably Property trusts. Energy stocks down despite the oil price bouncing overnight. 4th Q GDP Number is a bit of a horror – against consensus estimates for a small positive number of +0.2% the number has come out at -0.5%.

Tricom Today Stock Market Report 3-3-09

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The SFE Futures suggested a 78 point fall in the market. BHP and RIO both down heavily in ADR form overnight – 7.85% and 9.9% respectively. Metals all down overnight – Copper down 3.26%, Zinc down 2.39% and Aluminium 1.79%. Nickel down 4.50%. Oil price down 4% to $40.07. Three-day rally over on the deteriorating outlook for the world economy. Gold down $2.50 to $940.00. Bonds up with the 10 year yield down to 2.86%. A$/US$ down to 63.01c. The Bank of America’s CEO is saying the $20bn he borrowed from the government to buy out the failing Merrill Lynch last year was a ‘tactical mistake’.Materials and Energy stocks down 6.9% and 6.4%. The market is down 48 and in-line with the 87 point fall predicted by the SFE Futures this morning. It was down 97 at worst. Not a lot of company related news and no real theme this morning except everything’s down. One feature is Macquarie Group which has bounced from being down 4.8% to up 7.0% at its peak. No announcement and have yet to dig up a reason.
RBA Meeting Today – Decision at 2.30pm – Lots of opinions about what they will do. A Dow Jones newswire consensus of 18 economists suggest a consensus for a 25bp cut.

Tricom Today 13-2-09

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The Aussie market is up 32 basically in-line with the 20 point rise predicted by the SFE Futures this morning. Pretty quiet not much news apart from RIOs Chinalco deal and a few results. RIO is down 3.9%. BHP down 0.4%. Resources underperforming this morning down 0.4% on lower metal prices and a drop in the oil price. Oz Minerals announced they will incur writedowns of between $2.3bn-$2.8bn in FY08 accounts, including asset impairments.
Financials up 1.3% – banks all up by 1pm. ANZ up 7.7%after ruling out a capital raising in anannouncement last night noted their tier 1 ratio stood at 8.35%, well above regulatory requirements.Property sector down 2.8%. Westfield down another 4.1%. DXS down 5.8%.Last day to buy the CBA before it goes ex dividend 113c on Monday. Unchanged today at 3095c.The governments $41.5bn fiscal stimulus package has just been approved in the Senate.

Tricom Today 12-2-09

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The market is up 62 outperforming the 13 point rise predicted by the SFE Futures this morning. Having a strong day after showing great resilience yesterday following a terrible night on Wall Street Tuesday. All sectors bar property up on the open. The resources sector isleading the way BHP up 1.9% and RIO in a trading halt pending results this afternoon and a deal with Chinas Chinalco buying US$12bn worth of assets and making a US$7bn investment in equity. Fortescue Metals up over 6% early on. Energy stocks up despite the fall in the oil price and the decline in US energy stocks overnight. Gold stocks continuing their rally Newcrest and Lihir up 4.1% and 5.7% on another $22 jump in the gold price. Smaller gold stocks doing better than that. Industrials up 2.1% – Coca-Cola posted solid results up 3.5% early on. Fosters pumpingup over 5% at 11am on no news. Other risers include Orica,United Group, Toll, Macquarie Airports on no obvious news. CBA up another 3.0% afterresults yesterday. NAB down again. Seems the switch out of ANZ and NAB into CBA continues with NAB and ANZ seen as most likely to cut dividends. Mining Services sector having a moment as well with Macmahon up 9.5% and Monadelphous up 4.6%. Bradken down 7.5% on results yesterday Goldman Sachs JB Were have cut their earnings numbers by 12% and 35% quoting debt concerns and an uncertain outlook.

Tricom Today 11-2-09

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The market is down 27, doing better than the 80 point fall predicted by the SFE Futures this morning and is down just 1.1% despite a 4.6% fall on Wall St post a disappointing bank rescue plan which made it clear that there is no Obama miracle cure for the financial crisis after all. It has been terribly received in the US and criticized for a lack of detail. It seems the new administration are still making it up as they go along and have no convincing strategy to stop the financial crisis. Resources down 1.8% with metals all down. BHP down 2.8%. RIO up 1.9%. Energy stocks down on the lower oil price. Gold stocks mixed . Newcrest, Lihir and Sino Gold down, but smaller players up. One broker predicts another 3 year bull market in gold. Financials are down 0.7% – banks all down 1-2% early on with CBA up 0.7% and outperforming on the back of 1H results in-line with their profit upgrade last week. CBA will pay 113c dividend which goes ex on Monday. Property down 1.1% as Stockland Group posted a 1H NPAT loss of $726m with 1H revenue loss of $803m . SGP down 7% early on. Westfield down 1.0%.

Tricom Today 28-1-09

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The market is up 40 points compared to the 43 point rise predicted by the SFE Futures.The Banks putting in a great performance. Financials up 2.8%. CBA up 7.2%. Property Trusts are underperforming after Westfield – the sectors biggest company – announced late last night it would writedown $3bn worth of assets. Building stocks are struggling on the back of a profit warning from Boral – down 15%. Resources down 0.4% – BHP up 0.4% and RIO down 2.8% saying it won’t rule out an equity raising to pay down debt later this year.The Dow Futures suggest an 87 point gain on Wall Street tonight.