FYI | Dec 23 2014
For a more comprehensive preview of next week's events, please refer to "The Monday Report", published each Monday morning. For all economic data release dates, ex-div dates and times and other relevant information, please refer to the FNArena Calendar.
By Greg Peel
The ASX200 closed on December 31, 2013, at 5352. Yesterday it closed at 5442 having risen 103 points on the day, suggesting a year in which the index has achieved nothing more than to tread water, before dividends. However it was not really a year in which “the index” featured.
BHP Billiton closed at $37.99 last year for example, and $29.84 yesterday, suggesting a 21% fall (notwithstanding there’s one more week to go). CSL on the other hand closed at $68.96 last year, and $88.33 yesterday, for a 22% gain. Fortescue Metals has lost 87% over the year to now and Santos has lost 45%, while Amcor is up 26% (notwithstanding Orora spin-off) and Ramsay Healthcare is up 30%.
We’re not talking your little speccy stocks here, that fly around with abandon. These are big names. Many a global stock analysts has suggested, as 2014 winds down, that 2015 will be the year of “alpha”. Alpha represents stock-specific risk and thus movement, while “beta” represents the market’s risk and movement. While there’s no reason to suggest those analysts have it wrong, clearly 2014 was very much a year of alpha as well. That the ASX200, the “beta”, gave us pretty much a big zero in 2014 is misleading in “alpha” terms.
But as I noted above, it was a zero year before dividends. And there were plenty of those to be had. Telstra always leads the pack, along with the banks, but 2014 was a year when even Woodside Petroleum was offering bank-like distributions (offsetting a bit of capital loss) alongside your usual utilities, REITs and a few of your more individual high-yielders such as an Ardent Leisure.
The lesson from 2014 is perhaps that if your financial advisor tells you there are stocks that must be held in any Australian portfolio, if for no other reason than they are big names, be sure to question the argument behind those specific recommendations. This is not 2006.
To wind up 2014, we have two full and one shortened session ahead of Christmas Day, with the ASX closing at 2.10pm on Christmas Eve. The exchange then reopens on Monday for another two full and one shortened session, again closing at 2.10pm on New Year’s Eve and closing for New Year’s Day. The Kiwis have the right idea, also closing the NZSE on Friday the second, but the ASX will open its doors. It remains to be seen if anyone will turn up.
The following Monday, January 5, it’s back to business as usual for the Australian market, expect that 90% of participants will be on the beach. But beginning the Friday before and rolling through this week we’ll see the usual round of global PMIs. In the US it’s the usual “jobs week”, featuring the ADP private sector number and official non-farm payrolls.
There are a few interesting data releases out for the eurozone in the week beginning January 5, including the PMIs, inflation, unemployment, and German factory orders and industrial production.
It’s a relatively busy week in Australia as well, featuring the PMIs, ANZ job ads, the trade balance, building approvals and retail sales. The following week will feature housing finance and unemployment.
This is the last day for 2014 of FNArena’s full service. There will be no news or Broker Call as we take a bit of a rest. Service will resume on Wednesday, January 14.
FNArena would like to thank all our subscribers, readers and contributors for another – well let’s call it interesting – year. Wishing all a very Merry Christmas, and Happy Holidays to whom this does not apply, and Happy New Year. Enjoy your summer breaks and well see you again soon in 2015.
Behave yourselves.
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