Australian Stock Market Report – Afternoon 2/28/14

EVENING REPORT
(5pm AEDT)

The Australian share market closed modestly lower today, and shed 0.6 per cent over the course of what was a very busy week on the corporate reporting calendar.

Financial and industrial stocks dragged today, while the Info Tech sector was the worst performing, down 0.9 per cent.

In company news, Virgin Australia (VAH) joined rival Qantas (QAN) in posting a first half loss. The $49.7 million loss before tax was in line with the airline's own guidance and compares to a $61 million profit in the same period last year. Revenue rose 6.4 per cent in the period to $2.2 billion. VAH did not provide any guidance due to "uncertain economic conditions" and did not declare an interim dividend. The airline has not paid a dividend since February 2008. VAH shares closed steady at 35 cents today. QAN, which lost 9 per cent in the wake of its $252 million loss announced yesterday, rose 0.9 per cent to $1.165.

Elsewhere, Australia's largest retailer by market value Woolworths Limited (WOW), posted a 14.5 per cent increase in first half profit to $1.32 billion, driven by strong supermarket sales. Its Masters Home Improvement business delivered a worse than expected $71.9 million loss in the period. Shareholders will receive a fully franked interim dividend of 65c per share. WOW closed down one per cent to $36.07 today after a decent run-up recently ahead of the release of its result. Rival Wesfarmers (WES) added 0.8 per cent to $42.95.

Building products maker James Hardie (JHX) added 6.1 per cent to $14.50 after announcing a special US28c dividend to commemorate its 125th anniversary. JHX posted third quarter profit of $48.76M thanks to a resurgence in the US housing market.

Oil Search (OSH) shares rose 0.9 per cent to $8.54 after reporting full year net profit of US$205.7 million, a rise of 17 per cent.

In economic news, private sector credit (lending) rose by 0.4 per cent in January after a 0.5 per cent lift in December. Annual credit growth rose from 3.9 to 4.1 per cent - an 18 month high.

Overall housing credit is up 5.6 per cent on a year ago, with investor housing finance up 7.4 per cent - marking the strongest annual growth in three years. Business and consumer credit recorded a healthy lift.

On the market overall, a total of 2.2 billion shares changed hands, worth $8.6 billion. 470 were up, 470 were down and 372 were unchanged.

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