Australian Stocks: What Happened Today?

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This story features MADER GROUP LIMITED, and other companies.
For more info SHARE ANALYSIS: MAD
The company is included in ALL-ORDS

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

Australian Market

The Australian market (XJO) closed up 19.4 points or 0.41% to 4757.1 today. The market opened very shaky this morning, making a decent move around 1:30pm to the high side, closing near the day's high of 4758.3. The Healthcare sector has finished highest today, adding 2.10% and Gold closed -2.77% lower. On Friday the Dow Jones reacted well to the Non Farm payrolls data (175k, beating forecasts of 167k) rising 207 points, last night the index eased -9.53 points or -0.06% to 15,238.60.

The ASX Limited (ASX) shares have been put in a trading halt ahead of a $553 million equity raising. Almost half of that amount will be used to replace a $250 million debt facility for its subsidiary ASX Clearing Corporation. A further $200 million will be used in the clearing facility for all futures and options trading; to enable it to meet rising international capital standards. ASX will offer two new shares for each 19 held by existing shareholders as part of an entitlement offer announced this morning. At $30 for each new share, the offer is expected to raise about $553 million in new funds. ASX shares will pay a final dividend of 81c, around 12% below forecasts. It said its full-year profit would be around $346 million, just below market forecasts.

Rio Tinto plans to start exporting coal from the $US6.2 billion Oyu Tolgoi copper mine in Mongolia on Friday. Journalists have been invited to attend a ceremony at the mine on June 14 to mark the first shipment. Rio's subsidiary Turquoise Hill Resources Ltd owns a 66 percent stake in the mine, with the Mongolian government owning the remainder. Rio has been producing at the mine for several months, and has been aiming to start exporting by the end of June. But it has said since February it would not start shipping until it resolved a range of disputes with the Mongolian government.

A new IPO today for Virtus Health Limited (VRT) has opened at $6.07, up from an offer price of $5.68. The new shares traded as high as $6.22, and boosted a large portion of the healthcare sector. Today's action has increased confidence for future IPOs in Australia.
 

Australia's shale gas reserves could be as much as ten-times the existing known gas reserves, according to a US government report. The US Department of Energy found that there are sufficient shale oil and shale gas reserves globally to fuel demand for several years, at least, on present estimates. The study found Australia has an estimated 437 trillion cubic feet of recoverable shale gas reserves, ranking behind Mexico, but ahead of South Africa.

The NAB business survey for May has reported that business conditions improved slightly but remain weak, while business confidence was ''mediocre'' as mining capital expenditure reached its lowest in more than a decade, a monthly private survey has found. The business conditions index for the month was minus 4, up from minus 6 in April, despite a falling Australian dollar and an interest rate cut. The business confidence index remained unchanged at minus 1. The capital expenditure index was at a four-year low, driven by a sharp fall in mining capital expenditure by 33 points to -44, the worst since the start of the survey in 2002. NAB chief economist Alan Oster said that the falling dollar and a lower cash rate of 2.75% would not stop unemployment from increasing to above 6% by the end of the year as the Australian economy adjusts to a shift away from mining-led growth.

Home loan approvals have risen in April. Owner-occupied housing finance rose a seasonally adjusted 0.8% for the month, with 48,475 approvals, according to the Bureau of Statistics. Forecasts were for a rise of 2%, after the biggest jump in home loans for four years in March. Total housing commitments dropped by 0.2% in April to $22.7 billion.

AUD is currently trading at $0.9508, down $0.0083 against the USD.

Top Performers

Discovery Metals Limited ((DML)) up $0.03 or 18.75% to $0.19
Maverick Drilling and Exploration Limited ((MAD)) up $0.02 or 6.56% to $0.325
Sirtex Medical Limited ((SRX)) up $0.71 or 6.18% to $12.19
Paladin Energy Limited ((PDN)) up $0.045 or 4.79% to $0.985
Fleetwood Corporation Limited ((FWD)) up $0.16 or 4.64% to $3.61

Bottom Performers

Medusa Mining Limited ((MML)) down -$0.32 or -13.56% to $2.04
Mirabela Nickel Limited ((MBN)) down -$0.013 or -8.67% to $0.137
Oceanagold Corporation ((OGC)) down -$0.16 or -8.38% to $1.75
NRW Holdings Limited ((NWH)) down -$0.078 or -7.22% to $1.002
Coalspur Mines Limited ((CPL)) down -$0.018 or -6.92% to $0.242

Our Comments

Not as good of a day as I was expecting today, would have liked to have seen double the gains after the positive price action in the US on Friday.

Still think we have seen a pretty major low here for possibly a b-wave rally or a continuation of the uptrend.

We will look to get fully invested in the model portfolio here very soon.

Please tune into Sky Business tonight at 8pm for "Your Money Your Call" where I will be appearing as a guest expert.

(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

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