Australian Stocks: What Happened Today?

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            [3] => ((PDN))
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            [5] => ((ASL))
            [6] => ((MGX))
            [7] => ((GWA))
            [8] => ((HGG))
            [9] => ((AQG))
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            [5] => ASL
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            [7] => GWA
            [8] => HGG
            [9] => AQG
            [10] => SLR
            [11] => HZN
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This story features SUNCORP GROUP LIMITED, and other companies.
For more info SHARE ANALYSIS: SUN
The company is included in ASX50, ASX100, ASX200, ASX300 and ALL-ORDS

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

Australian Market

The Australian market (XJO) closed up 9.5 points or 0.19% to 5061.5 today. The morning was similar to yesterday, not following the overseas lead, with the Dow Jones dropping -21.05 points or 0.14% to 15,499.50, and the SPI futures flat, we saw a morning push towards yesterday's high of 5098.5, falling just short at 5092.2 around 11:00am. Shortly after the banks lead a huge sell off with the news of a proposed levy (more below) pushing down to the day's low of 5030.1. There was some possible confusion about the news and the banks were able to regain some of their losses as we closed positive. The best performing sector of the day was Consumer Discretionary, rising 1.34% and the worst was the Financial X-A-REIT, falling -0.91%.

A Federal government levy designed to prop up the budget bottom line by billions of dollars, was leaked today. The new levy will target banks in order to provide insurance in case future bailouts are needed. The statement (set to be officially release on Friday involves a deposit insurance levy as recommended by the Council of Financial Regulators, which will raise funds to underwrite any Australian bank should it need assistance in the future. The proposed levy is between 0.05% and 0.1% on protected deposits up to $100,000. The figures were incorrectly reported earlier in the day as 0.5% to 1%, resulting in around $9 billion being wiped off the value of the big 4 banks.

In economic news, the Australian Industry Group's Performance of Manufacturing Index (PMI) came in at 42.0 for the month of July, which is 7.6 points lower than June. The Manufacturing gauge hasn't posted a monthly rise since June 2011. Ai Group chief executive Innes Willox said, "Manufacturers are telling us that, while the fall in the Australian dollar and the May interest rate cut have been extremely welcome, they have not yet been enough to turn around a very challenging business environment." A reading below 50 shows contraction in the sector.

The Housing Industry Association (HIA) reports that the total of seasonally adjusted newly homes sold rose to 3.4% for in June up from 1.6% in the month prior, and printing fourth consecutive rise. Detached house sales increased by 7.3% at the end of last financial year and multi-unit sales dropped by 17.5%. Also the RP Data-Rismark Home Value Index reports that capital city dwelling values increased 1.6% in July, after rising 1.9% the month before. Homes are now 6.5% higher since May 2012.

Overseas, the official China manufacturing PMI has coming in at 50.3, a much better result than the forecasts of 49.8. Soon after the HSBC China manufacturing PMI has come on target at 47.7, lower than the 48.2 reading in June and is now the weakest since August 2012.

Suncorp Group Limited ((SUN)) has released preliminary expectation of its second half of 2013 results and dividend payments, showing an expected slide of 34%. SUN said in a statement that it had completed a transaction to sell off a portion of its "bad loans book" to Goldman Sachs at a loss of $630 million. SUN's net profit for FY2013 estimates are now between $480-500 million. The bank announced it would pay a special dividend of 20c a share and a second half of 2013 dividend of 30c a share.

Transurban Group ((TCL)) has reported a tripled annual profit of $175 million in the year to June, from the previous result of $58 million. The extra profit can be attributed significantly to booking an accounting charge on a US toll road, to the Pocahontas Parkway 895 roadway in the US state of Virginia which resulted in an equity accounting charge of $138 million.. TCL better guidance for the year is based on expectations of higher revenues from its toll-road assets in Sydney, some of which have been undergoing upgrades and forecast a rise in its dividend in the new financial year. Toll revenues rose 5% to $991 million. TCL chief exec Scott Charlton, in his first year on the job was paid $4.1 million.

Australia and New Zealand Bank Limited ((ANZ)) has opened a new vault in Singapore this month for storing bullion. The vault can hold 50 metric tonnes and could keep U.S. $2.13 billion of Gold at Wednesday's closing price. ANZ has forecasted the price of the metal rising to U.S. $1,400 an ounce in 2014 and U.S. $1,500 in 2015.

Paladin Energy Ltd ((PDN)) has gone into a voluntary trading halt til Monday as news of its pending sale of  a minority stake in its flagship mine in Namibia. Paladin has recently been trying to sell, and the company said today the trading halt was required because more news on that process was imminent.

AUD is currently trading at $0.8965, down -$0.0015 against the USD.

Top Performers

Linc Energy Ltd ((LNC)) up $0.105 or 6.48% to $1.725

Ausdrill Limited ((ASL)) up $0.07 or 6.48% to $1.15

Mount Gibson Iron Limited ((MGX)) up $0.03 or 5.36% to $0.59

GWA Group Limited ((GWA)) up $0.12 or 4.88% to $2.58

Henderson Group PLC ((HGG)) up $0.13 or 4.69% to $2.90

Bottom Performers

Alacer gold Corp ((AQG)) down -$0.25 or -8.90% to $2.56

Silver Lake Resources Limited ((SLR)) down -$0.055 or -6.79% to $0.755

Horizon Oil Limited ((HZN)) down -$0.025 or -6.76% to $0.345

Cochlear Limited ((COH)) down -$2.93 or -4.80% to $58.15

Pacific Brands Limited ((PBG)) down -$0.035 or -4.24% to $0.79

Our Comments

Some positive price action early in the session today was quickly evaporated by the announcement that the Labor Party plans on charging a levy on deposits for banks. The banks were sold off aggressively and dragged the market down whilst the resources held up ok. The excuse is because they are not making any money from banks for deposit protection put in place during the GFC. Does anyone actually believe that 5 years on from the GFC that these guarantees are going to be called upon? I know I don't.

(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.

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