Australian Stocks: What Happened Today?

This story features ENERGY WORLD CORPORATION LIMITED, and other companies. For more info SHARE ANALYSIS: EWC

By Stephen Hogan, Senior Private Client Adviser, Equities/Derivatives

Australian Market

The Australian market (XJO) closed up 12.5 points or 0.26% to 4900.8 today. The market was indecisive for most of the day until the lead up to the RBA statement, spending time above and below opening figures. From about 2pm we saw it move higher then briefly fall until the announcement of the RBA has kept rates on hold at 2.75%, as expected, to then close near highs of 4907.2.Overnight the Dow Jones rose 138.46 points or 0.92% to 15,254.00. The Information Technology sector has taken the biggest beating today, dropping -1.99% while the Gold sector has gained the most with +1.15%.

Cricket Australia has struck up a deal with networks Nine and Ten worth a reported $590 million (118% higher than the previous five year deal) for the domestic broadcasting rights. The Nine Network outbid Network Ten for the rights to broadcast Australian cricket for the next five years, while Ten has won the right to broadcast the domestic Twenty20 competition for five years from next summer.

Billabong ((BBG)) has been exploring a possible takeover with two separate parties – one including private equity firm Sycamore Partners; the other including private equity firm Altamont Capital Partners. The proceeds of the possible debt deals and asset sales would be used by Billabong to repay in full its existing debts, the company said. Billabong has been undergoing a major restructure as it deals with tough economic conditions, particularly in Europe.

The current account deficit has narrowed to $8.5 billion in the first quarter, from $14.7 billion in the last three months of 2012, lower than expectations of a $9 billion deficit. Australia's net foreign debt rose to $763.578 billion in the March quarter from $757.284 billion in the December quarter. Government spending on consumption and investment fell 3.3% in the first quarter to an inflation adjusted $83.47 billion. However, the pullback merely reversed a sharp increase the previous quarter which was mainly due to the accounting treatment of a large private asset that was transferred to the government. As a result, investment spending by the government and public enterprises fell 15.3% in the first quarter to $17.8 billion, after a 21.7% jump the previous quarter. In contrast, government spending for consumption rose 0.5% in the first quarter to $65.68 billion in real terms.

AUD is currently trading at $0.9734, down $0.0037against the USD.

Top Performers

Atlas Iron Limited ((AGO)) up $0.057 or 7.45% to $0.822

Energy World Corporation Limited ((EWC)) up $0.027 or 6.43% to $0.447

Senex Energy Limited ((SXY)) up $0.035 or 6.19% to $0.60

Perseus Mining Limited ((PRU)) up $0.062 or 5.88% to $1.117

Fortescue Metals Group Limited ((FMG)) up $0.19 or 5.83% to $3.45
 
Bottom Performers

  Billabong International Limited ((BBG)) down -$0.22 or -48.35% to $0.235

SMS Management & Technology Limited ((SMS)) down -$0.29 or -5.79% to $4.72

Buru Energy Limited ((BRU)) down -$0.085 or -5.69% to $1.41

Ten Network Holdings Limited ((TEN)) down -$0.015 or -5.17% to $0.275

Decmil Group Limited ((DCG)) down -$0.085 or -5.11% to $1.58

Our Comments

The RBA's decision to keep rates on hold today was no surprise as they have been very conservative cutting on the way down. Personally I think rates should have been at 2.75% 12 months ago which would have put as in a different boat completely in regards to a high AUD.

With the recent launch of the Australian Market Digest model portfolio we continued to add positions today which included MYR, NCM, CCL and MQG. Please visit the member's area of the website www.stephenhogan.com.au for current open positions and performance.

I did a scan on the top 200 shares today and I found buys everywhere across the board and only a few sells. We then weeded that down to the four stocks above but OSH, WRT, NST, AMP, RIO and SXY all were very close. We may take some more positions in the following days.

(For a more comprehensive summary of last night’s market action see FNArena’s Overnight Report.)
 

Re-published with permission. Views expressed are not by association FNArena's (see our disclaimer).

Stephen Hogan is an Authorised Representative of Novus Capital. Authorised Representative No.345411 – http://www.stephenhogan.com.au

Novus Capital Limited ("Novus") is holder of Australian Financial Services Licence No 238 168. Novus, its directors, officers, associates and employees each declare that they, from time to time, may hold interests in financial products and/or earn brokerage, commission, fees or other benefits from financial products mentioned in this e-mail or attached documents. Unless specifically stated within this e-mail or an attached document, any information communicated by this e-mail constitutes unsolicited general financial product advice which has been compiled without regard to any investor's individual objectives, financial situation or needs. It is not specific advice for any particular investor. Before making any decision about the information provided, you need to consider the appropriateness of this information having regard to your individual objectives, financial situation and needs and consult your adviser. Any indicative information and assumptions used here are summarised and also may change without notice to you, particularly if based on past performance or relate to a future matter.

Novus believes that any information or advice (including any financial product recommendation) contained in this document is accurate when issued but do not warrant its accuracy or reliability. Novus is not obliged to provide you with updated information or advice if circumstances change. Novus, its directors, officers, associates and employees exclude to the full extent permitted by law, all liability of any kind whether in negligence, contract, under a fiduciary duty or otherwise, for any loss or damage, whether direct, indirect, consequential or otherwise, whether foreseeable or not, arising from or in connection with this e-mail or an attached document.

Find out why FNArena subscribers like the service so much: "Your Feedback (Thank You)" – Warning this story contains unashamedly positive feedback on the service provided.

Click to view our Glossary of Financial Terms