Aussie Dollar’s Slide Continuing
More of the same uncertainty for another week?
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Coventry Joins The Downgrade Club
Late last Friday afternoon, the small WA industrial products company Coventry Group (CYG) became the latest in the growing list of profit downgrades when it issued a market update that warned that net earnings would more than halve to around "$6 million" for the year to June.
Read MoreThe Week Ahead
Another week when the health of the fading Australian resources investment boom will be again tested, as well as the Chinese economy; local building approvals will get a run, and offshore the second estimate of US first quarter economic growth will be released, along with the usual monthly economic figures from Japan on employment, retail sales and inflation.
Read MoreThousands Of Jobs Disappear
A bad day for jobs yesterday that will test the resilience of the country’s labour market that has so far shown unusual strength in 2013, with more than 95,000 jobs created in the first four months of the year.
Read More$30b Wiped Off Local Market
A weak manufacturing report from China, worries about the future of the US Fed’s easing program, job losses at Ford and other companies and a general unease with the economy combined to knock more than $A30 billion off the value of local shares yesterday and rattled European markets overnight as well.
Read MoreJames Hardie’s Mixed Result
The quarterly and annual result from building products group James Hardie was one of those good bits/bad bits results. Earnings were solid, dividend is unchanged and a share buyback has been renewed.
Read MoreSlow Construction Demand Hits Adbri Bottom Line
But for cement group Adelaide Brighton (ABC) weakness in the construction sector meant bad news for shareholders at yesterday’s AGM.
Read MoreCardno Joins Mining Services Downgrades
The slowdown in the mining sector here and offshore has seen consultants, Cardno Ltd (CDD), join the growing list of service companies reporting damage to revenue and earnings.
Read MoreNewcrest Hit By Court Ruling
If the weakening gold price and production problems at some of its mines were not enough, Newcrest (NCM), the country’s biggest gold miner, now faces a serious legal situation that could threaten its hold on its huge, $2 billion Cadia mine in central Western NSW.
Read MoreMyer Lifts Sales A Touch
Caution, yes in Myer’s (MYR) third quarter sales update yesterday, but none of the bad news we have seen from fellow retailers, Target and Fantastic about weak sales, falling profits or a lack of buyers.
Read MoreThorn Group Upbeat, Market Gives Tick
Still in retailing and Thorn Group (TGA), the rental and credit provider has reported flat earnings at $28 million, despite recording a record level of rentals and revenue in the year to March 31.
Read MoreTransfield & Boart Feel Mining Slowdown
Transfield Services (TSE) and Boart Longyear (BLY) both warned yesterday of the damage the uncertainty from the slide in activity in the mining sector and other parts of the economy was doing to their revenues and earnings.
Read MoreFantastic’s Not So Fantastic Downgrade Hits Shares
And the downgrades continued yesterday with Fantastic Holdings Ltd (FAN), the country’s third biggest furniture retailer, revealing a sales and earnings fall that could cut net profits for the 2012-13 year by more than 30%. That could threaten the final dividend for the year as well.
Read MoreRBA Minutes Reveal Demand Not Dollar Concerns
The Minutes of Reserve Bank’s May 7 meeting that produced the surprise cut in interest rates make clear that the high value of the dollar had nothing to do with the decision – despite reports in the media and from business economists to the contrary.
Read MoreGPT Sells Mall, Now For Some More Rebalancing
Will GPT now turn its attention to making a firm, higher offer for the investment, commercial and industrial property assets of Singapore-controlled Australand after selling its half share in the Erina Fair shopping mall on the NSW central Coast for $397 million?
Read MoreLeighton Insists It Has Turned The Corner
Believe it or not, but Leighton Holdings, the country’s major contractor, reckons its looking to Asia to find new sources of sustainable growth. That’s despite the region being its earliest offshore area for growth, especially in Hong Kong and Indonesia.
Read MoreCoffey Reassures On Banks – Shares Up 45% In A Week
Contractor, Coffey International, has been forced to issue a further statement after its earnings downgrade a week ago – this time it’s to reassure investors that it is not in trouble with its bankers.
Read MoreWesfarmer’s Target Loses Focus, Sales, Profits Slip
Every now and then you see the smarties in the stock market outsmarted by someone else, usually themselves.
Read MoreDiary – Myer To Give Q3 Update – Will The Target Disease Strike?
As usual these days, central banks here and the in the US will dominate much of the week, thanks to the minutes of the May 7 board meeting of the Reserve Bank which produced that surprise cut in the cash rate, and then the appearance Wednesday night of Federal Reserve chairman, Ben Barnanke.
Read MoreGolden Glow To Greenback, But Not To Metal
So what’s fallen fastest in the past couple of weeks or so – gold or the Aussie dollar? The answer is clear – both have surprised on the downside. Not for their weakness – that has been apparent for a while, but for the speed of the fall.
Read MoreJapan Stronger On The Back Of A Weaker Yen
The growing attraction of Japanese equities for big global investors (see – Global Investors Concerned About China) has been underlined by a sharp improvement in the health of the country’s economy in the three months to March this year.
Read MoreContrasting Figures From Sydney Airport And Virgin Australia
Sydney Airport is looking at returning more to unitholders this year because of an expected modest improvement in traffic, but Virgin reckons its results will fall because of problems with a reservations system.
Read MoreGlobal Investors Concerned About China
Big global investors reckon the risks of a slowdown in the Chinese economy have risen, they like Japan (a point confirmed by the better than expected first quarter GDP data and the 45% jump in the Tokyo market), they are also going off emerging markets and because of their fears about China, increasingly concerned about commodity prices.
Read MoreDow Notches 20th Record Close
Investors in the Australian stockmarket faces another tough decision today – do they continue to be bearish after yesterday’s big swings, or do they take their lead from another record on Wall Street?
Read MoreCBA On Track For Record Full-Year Profit
The Commonwealth Bank has confirmed that it is on track for another record full-year profit after reporting cash earnings of $1.9 billion for the March quarter, maintaining the strong run of profit results for the major banks.
Read MoreUGL Downgrades Again
If it wasn’t for the fact that the mining services sector is facing weakening conditions, you’d be entitled to label UGL Ltd a bit of a serial downgrader and under performer given its form over the past five years. If anything there seems to be the impression that the company has downgraded earnings more than it has upgraded them in that time.
Read MoreBHP On Austerity Drive – Watch Dollar
Forget the federal budget – much the changes won’t see the light of easy, if at all until after the September 14 election, except the increase in the Medicare levy.
Read MoreAustralian Households Still Deleveraging
More evidence this week that Australians are still acting in a financially conservative way, a direction that last night’s Federal budget won’t force people to change.
Read MoreMacquarie’s Hybrid Issue
Should you be wary of the latest hybrid fund raising offer from a bank which emerged yesterday? It all depends on what you want from such an issue (and if you want it at all). The end decision is yours, and it will pay to do your homework.
Read MoreGloss Off Dulux – Profit Fall For Incitec Pivot
The convoluted takeover battle for building products group Alesco late last year has bitten hard into the interim earnings of DuluxGroup, Australia’s major paint maker, with the company taking a $10 million write-off on the costs of the bid for the six months to March 31.
Read MoreCoffey’s Litany Of Woes
The slowing in the resources sector exploration and investment continues to hit mining services companies with Coffey International (COF) becoming the latest to downgrade its outlook and suffer a big sell off in its shares.
Read MoreStockland’s Mild Makeover – To Maintain Distribution For Next Year
Shares in property group, Stockland hardly edged higher yesterday after the well-telegraphed strategic review produced another small writedown and a slight shift in emphasis away from residential and towards retail and industrial property.
Read MoreDiary – Budget To Dominate, Watch For China, CBA Update, CSR, Dulux Profits
The Federal budget dominates the coming week in Australia, but with some much of the detail leaked in the last 10 days, it will be something of an anti-climax.
Read MoreDollar Dips Closer To Parity – Markets To Start Low And Slow
And in early trading in Asia Monday morning, the Aussie dollar slipped back under parity with the greenback to trade around 99.95 US cents, a sign the momentum is down for the time being.
Read MoreMarkets Gain, But Watch Yen And Dollar’s Impact
Coming off the back of a solid week here and offshore for equities last week, the local market should start on a slightly more confident tone today.
Read MoreNAB Hostage To Weak UK Economy
The National Australia Bank has fallen further behind its three big rivals (CBA, Westpac and ANZ), despite a rebound in earnings and a lift in interim dividend for the six months to March 31. The NAB yesterday reported cash earnings to $2.92 billion, up 3.1% with the interim dividend up 3c to 93c a share.
Read MoreKey Aussie Markets, South Korea And China See Patchy Economic News
South Korea has joined Australia in cutting its key interest rate by 0.25% amid fears of a slowing economy and concerns about a strong currency (especially against the yen). The Bank of Korea cut its main rate to 2.5% yesterday after strong pressure on it from the country’s government, which on Tuesday pushed a $US15 billion mini-budget of stimulatory measures through parliament.
Read MoreHidden Gold In Jobs Data For Investors As Dollar Slides Overnight
The Australian dollar turned down overnight, despite the second lot of official monthly figures showing the Australian labour market is much stronger than anyone had thought.
Read MoreCan Retail Bonds Really Compete With Shares?
So will investors in search of fixed-income assets chase Australian government bonds when retail trading starts on May 21? Tuesday’s surprise interest rate from the Reserve Bank seems to have undermined the other big investment destination for security-conscious investors – bank term and savings account deposits.
Read MoreNZ Moves To Drive Its Dollar Lower
The NZ Reserve Bank had a busy day yesterday – it moved to try and nip a speculative home loan boom in the bud by forcing the country’s banks to boost capital buffers on low deposit loans, and the governor Graeme Wheeler revealed the central bank had intervened to halt the strong rise in the country’s dollar, and might to it again.
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