Australian Stock Market Report – Afternoon 7/19/13

Afternoon Report
(17:00 AEST)

Local stocks were unable to stage any form of eaningful recovery on Friday afternoon. The ASX finished within sight of the session lows. Over the course of the week the index is essentially flat. At face value this result appears unflattering. Although when seen through the lens of the major development this week, namely the communications from Mr Bernanke, a flat result is better than a pass mark.

It's worth remembering that recent months have seen heightened volatility as a result of the US central bank merely advancing the subject of moderating stimulus measures. Nothing has changed in terms of the monthly asset purchases and it's reasonable to say that could remain the case for the remainder of the year under certain circumstances.

The economic big picture will remain in play next week although the focus will be closer to home. The inflation report next Wednesday will be an important catalyst for currency interest and stock markets. To date the consensus has been firmly skewed towards more rate cuts. However, for the first time in a while there is talk of upside risks. These risks stem from the large drop in the Aussie dollar since early May. Whilst shift in risks is meaningful, they are too recent to have a bearing on the reading due for on the 24th of July

Whitehaven Coal (WHC) ended flat on Friday. The coal miner said that an environmental group has commenced proceedings in the Federal Court against the company and the Federal Minister for the Environment. The lawsuit argued against the mine´s environmental approval granted by the minister for the Maules Creek Coal Project. Whitehaven intends to ask for the legal challenge by the local environmental group, known as the Northern Inland Council for the Environment, to be heard as soon as possible.

CFS Retail Property Trust Group (CFX) intends to spin off four local shopping malls into a separately-listed company. The proceeds of the sale, $446.5 million, will be used tp pay down debt. The properties all located in Victoria, will be form a fund called Pacific Retail REIT which will list on the ASX by September. CFX shares finished up by just over 1%.

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