Australian Stock Market Report – Afternoon 8/27/2012

AFTERNOON REPORT
(5pm AEST)

Despite a positive start, the local share market closed slightly lower today with investors unwilling to take on too much risk ahead of an important week on the global front. Chinese shares fell to their lowest level in three and a half years, following a fall in profits from industrial companies. After rallying to an intra-day high of 4402.9pts, the local market closed down 3.6pts to 4372.9.

European and US markets closed on Friday with a cautious tone. Investors are likely to tread water ahead of the US Federal Reserve's annual symposium at Jackson Hole on the weekend, which will be attended by Fed Chairman Ben Bernanke along with European Central Bank Chief Mario Draghi

Locally, a number of companies traded without rights to their dividends today, which pulled on the overall market. Woodside Petroleum (WPL) fell 1.7pct to $34.70 while Suncorp Group (SUN) lost 3.5pct to $8.76 and Coca-Cola Amatil (CCL) was down 2.3pct to $13.43.

Among the companies reporting today, surf-wear retailer Billabong (BBG) posted its first annual loss since listing on the share market in 2001. BBG posted a net loss of $276 million, well below market expectations for an annual profit of $30 million. But the retailer says it its eyeing off better earnings ahead and that takeover talks continue with private equity firm TPG, even though BBG considers the current offer does not reflect the true value of its business. BBG shares today rose slightly to close at $1.355.

Logistics firm Toll Holdings Limited (TOL) posted a 75.9% fall in FY profit largely (slightly below market expectations) because of write-downs in the value of its assets in Japanese (Footwork Express) and smaller businesses in Australia. Toll has been upgrading its fleet and preparing for the turnaround in the market. Toll´s Global Resources business was the standout today, as its overseas ventures are returning strong profits than here in Australia. Toll announced a dividend of $0.13 a share in-line with market expectations. Toll did not give any firm guidance today but did tell the market it had commenced its strategic review of Footwork Express. TOL shares today fell 0.9pct to $4.51.

Caltex (CTX) reported a first half net profit of $197 million, up almost 74pct. The result was boosted by better margins from its refinery operations, and better marketing of its fuel (petrol) products. CTX shares today fell 1.4pct to $15.27.

According to the Australian Institute of Petroleum, the national average retail petrol price rose by 2.9 cents to 145.8 cents a litre in the past week, a 13-week high. CommSec had tipped prices to lift by around 3 cents a litre. Over the past fortnight the Singapore gasoline price has fallen around 2 cents a litre while the wholesale (terminal gate) price peaked at a 15-week high on Thursday before since easing. CommSec expects the national average retail petrol price (pump price) to be broadly stable over the coming week.

The Australian dollar fell to a one month low against the greenback today, with markets pricing in the possibility the US Fed may hint towards a third round of stimulus buying (QE3) at this weekend's Jackson Hole symposium. The AUD was worth US103.84c at 5pm AEST. It was also buying €83.11 and £65.69c.

On the market overall, a total of 1.54 billion shares, worth $3.5 billion. 448 were up, 449 were down and 365 were unchanged.

At 5pm AEST on the ASX24, the futures contract was at 4337, up 5pts.

Markets should be quiet early this evening, with Londoners enjoying a public holiday. In the US, the Dallas Fed Manufacturing survey is released.

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