Australia Stock Market Close 08/16/2011
MARKET CLOSE
(4.30pm AEST)
The Australian sharemarket pulled back in the second half of trade to wipe out a portion of yesterday's stellar gains. The ASX 200 index (XJO) fell 0.8 pct or 35.6 pts to 4247.3 while the broader All Ordinaries index (XAO) dropped 0.7 pct or 29.5 pts to 4317.3.
Weakness late in the session from the energy, mining and financial sectors led the market into negative territory. So far in August, Aussie shares are down 4 pct and July was the fourth straight month that the market ended lower.
The S&P/ASX 200 Materials index fell 1.45 pct or 183.6 pts to 12449.7, with Australia's largest miner BHP Billiton (BHP) down 1.05 pct or 42 cents to $39.43 while RIO Tinto (RIO) dropped 1.52 pct or $1.13 to $73.39. BHP is currently four times bigger than RIO in terms of its market cap.
The S&P/ASX 200 Energy index dropped 1.76 pct or 245.4 pts to 13694.1 with the country's second largest oil and gas producer, Woodside Petroleum (WPL) falling 2.69 pct or $1.03 to $37.32. The smaller Santos (STO) dropped 1.49 pct or 18 cents to $11.93.
The S&P/ASX 200 Financials index lost 0.91 pct or 35.4 pct to 3871.4 with Westpac (WBC) by far the worst performer following its profit result. WBC shares fell 4.35 pct or 92 cents to $20.25, National Australia Bank (NAB) dropped 1.53 pct or 36 cents to $23.21, ANZ Banking Group (ANZ) lost 1.45 pct or 30 cents to $20.35 and Commonwealth Bank of Australia (CBA) ended 1.16 pct or 55 cents lower to $46.83.
The reporting season is really heating up this week, with more than 100 companies scheduled to post their profit results between August 15 and August 19. There were over 20 companies announcing results or giving the market an update today.
One of the big four banks, Westpac (WBC) led the banks lower today after posting a slightly lower than expected profit result prior to market open. The company's profit came in at $1.55 billion between April and June this year. The bank's margin rose by 4 bps to 2.12 pct however credit growth remained subdued.
WBC is the second biggest Australian bank by market capitalisation behind CBA. WBC is Australia's oldest bank and was first listed in 1962. It last paid a dividend of 76 cents a share to shareholders on July 4 and a 74 cent a share final dividend in November last year, currently giving it a dividend yield of around 7.4 pct. WBC shares have fallen 8.6 pct so far in calendar year 2011.
Building materials company, James Hardie Industries (JHX) reported a US$39.4 million profit for the first quarter (April to June 2011). The result was in line with market expectations and the company did not declare a dividend. JHX has not paid a dividend to shareholders since July 2008. As expected, JHX shares did not react to the result and gained 0.93 pct or 5 cents to $5.40.
JHX is a global building materials company, with a particular focus on fibre cement products. Its products are used for a variety of purposes including flooring for residential and commercial construction. The company first listed in 2001 and has a market capitalisation of $2.3 billion. The company was involved with asbestos for several years and has been paying some level of compensation in one form or another to some of the Australians affected since the 1980s. JHX shares have dropped 19.9 pct so far in calendar year 2011.
Australian steelmaker, Onesteel (OST) posted its full year profit results today (July 2010 to June 2011). Net profit fell 11 pct on the prior year to $230 million, revenue was higher and a 4 cent a share final dividend was declared. OST has fallen 43 pct since the start of this calendar year on the ASX. By market close, OST rose 1.05 pct or 1.5 cents to $1.45.
OST manufactures and distributes steel and finished steel products around the world. OST used to be a subsidiary of the world's largest miner, BHP prior to the year 2000 when BHP and Billiton merged. Both BlueScope (BSL) and OST were both owned by BHP. BSL first listed on the ASX in 2002. OST has a market capitalisation of $2 billion. Around 5 pct of the company is owned by the Government of Singapore Investment Corporation, which is one of the world's largest sovereign wealth funds.
Gambling and entertainment company, Tabcorp (TAH) posted its full year profit earlier in the session. TAH's profit rose by 14 pct to $534.8 million and the company announced a final dividend of 19 cents a share. The company currently has a dividend yield of close to 7.5 pct.
TAH owns several well known brands including Keno, TAB Sportsbet and Sky Racing. The company was first listed in 1994 and has a market capitalisation of $2.24 billion. TAH shares have lost 21.7 pct so far in 2011.
Online classifieds website, Carsales.com (CRZ) posted a solid full year profit result of $58 million which was better than market expectations. CRZ shares rose 3.55 pct or 16 cents to $4.67 today. Its share price has remained unchanged so far in 2011.
Carsales.com (CRZ) is the largest consumer website in Australia and offers online automotive classifieds. The company was first listed in 2009 and has a market capitalisation of $1.08 billion. Australian media company, ACP Magazines owns close to 50 pct of the business.
Copper and gold miner, OZ Minerals (OZL) recorded a 72 pct fall in first half profit to $113.9 million which was lower than consensus. OZL shares fell 3.64 pct or 45 cent to $11.90 by market close.
OZL mines copper and gold from its South Australian mine, Prominent Hill. OZL also explores in both Thailand and Cambodia. OZL was formed following the merger of both Oxiana and Zinifex in 2008. The company currently has a market capitalisation of $3.85 billion and last paid a dividend in February
There are more than 15 companies scheduled to post their profit results tomorrow including big names such as Woodside Petroleum (WPL), building and construction materials company, Boral (BLD), law firm Slater & Gordon (SGH) and one of the world's largest owners of shopping malls, Westfield Group (WDC).
Australia's oldest airline, Qantas (QAN) announced a new international strategy today. This will include investment in a new premium airline based in Asia, with the location of the new carrier still to be determined and announced to the public.
A new low-cost domestic airline under the name of Jetstar Japan is expected to be launched in the world's third largest economy by the end of next year. QAN said that 1,000 jobs are expected to be 'affected' by the strategy to make the airline more profitable. QAN shares fell 0.33 pct or 0.5 cent to $1.52 by market close. QAN shares have dropped 40 pct since January this year.
Asian Markets
Asian markets ended mixed today, with China's Shanghai Composite index falling 0.71 pct or 18.6 pts to 2608.16 and Hong Kong's Hang Seng eased by 0.48 pct or 96.69 pts to 20163.41. The best performing index was South Korea's KOSPI index which was playing catch-up today due to a holiday yesterday. Shares in South Korea rose 4.83 pct or 86.56 pts to 1879.87, Japan's Nikkei 225 index improved marginally by 0.23 pct or 21.02 pts to 9107.43 and shares in the Philippines jumped 0.92 pct or 40.07 pts to 4372.7.
US, EU Markets: Expectations
In European trade Germany's Chancellor, Angela Merkel and French President Nicolas Sarkozy are meeting tonight to discuss the options remaining for the Eurozone economies to deal with its debt problems.
On the economic front tonight, the Eurozone's trade balance and latest quarterly Gross Domestic Product (GDP) reading will be released at around 7pm (AEST). Out of the U.K, the latest consumer inflation reading will be announced. The market is expecting inflation to come in at 4.3 pct for the past 12 months.
Out of the U.S tonight, the latest report on building permits and housing starts will be out prior to the U.S market open. The building permits report gives us an idea of how the construction industry might look in the near future. This is due to the fact that receiving a government permit is one of the first necessary steps to building a property.
The volume of shares traded came in at 2.07 billion today, worth $6.38 billion. 533 shares were up, 542 finished weaker and 328 ended unchanged. The dollar value of shares traded today was around 40 pct less than last Tuesday, which was the biggest day of trading for the week and the most volatile in 27 years.
At 4.30pm AEST on the Sydney Futures Exchange, the ASX24 futures contract is 0.33 pct or 14 pts lower to 4214.
Most major European markets trade between 5pm (AEST) and 1.30am (AEST). Futures in Europe are pointing to a weaker start to trade tonight.
Dow Jones futures are a little lower, indicating that U.S shares could start weaker when American markets open at 11.30pm (AEST).
Turning to currencies, the Australian dollar is lower and buys US104.2 cents, JPY80.12 and EUR72.52 cents.
One of the best performing large cap stocks on the market today was Stockland (SGP), which rose 5.54 pct or 15 cents to $2.86. SGP is a global property development and investment management group founded back in the 1950s. The company has a market capitalisation of $6.8 billion and was first listed on the ASX in 1988.