Australian Stocks: What Happened Today?

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            [0] => ((TLS))
            [1] => ((ORG))
            [2] => ((EGP))
            [3] => ((IAG))
            [4] => ((SWM))
            [5] => ((BXB))
            [6] => ((PBG))
            [7] => ((ASX))
            [8] => ((CAB))
            [9] => ((TOL))
            [10] => ((FXJ))
            [11] => ((FMG))
            [12] => ((AGO))
            [13] => ((TWE))
            [14] => ((TTS))
            [15] => ((DML))
            [16] => ((DCG))
            [17] => ((AAD))
            [18] => ((TEN))
            [19] => ((AWE))
            [20] => ((AGO))
            [21] => ((MFG))
            [22] => ((SMX))
            [23] => ((MML))
            [24] => ((RSG))
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            [1] => ORG
            [2] => EGP
            [3] => IAG
            [4] => SWM
            [5] => BXB
            [6] => PBG
            [7] => ASX
            [8] => CAB
            [9] => TOL
            [10] => FXJ
            [11] => FMG
            [12] => AGO
            [13] => TWE
            [14] => TTS
            [15] => DML
            [16] => DCG
            [17] => AAD
            [18] => TEN
            [19] => AWE
            [20] => AGO
            [21] => MFG
            [22] => SMX
            [23] => MML
            [24] => RSG
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)

This story features TELSTRA GROUP LIMITED, and other companies.
For more info SHARE ANALYSIS: TLS
The company is included in ASX20, ASX50, ASX100, ASX200, ASX300 and ALL-ORDS

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

Australian Market

The Australian market (XJO) closed down -24.3 points or 0.48% to 5075.7 today. The XJO was plagued in the morning by poor global closes and the SPI pointing much lower. The market plummeted on the open today hitting a low of 5029 at 10:30am, giving away nearly 1.4% before turning around to retrace over half of the drop. Overnight the the Dow Jones fell -105.44 points or 0.70% to 14,897.50, now falling for the most consecutive days in 13 months, and the S&P 500 dropped -9.55 points or 0.58% to 1,642.80. Our market was influenced but the Fed minutes release, stating the looming tapering will begin before the end of the year and then supported by HSBC's flash China PMI. The best performing sector was Consumer Discretionary, gaining 0.19%, while the worst sector was Gold followed by Information Technology, falling -2.61% and -2.24.

 In economic news, the Conference Board (CB) Leading Index for August declined 0.2% and the CB Coincident Economic Index increased 0.1% in June.

 In China, we received some comfort news from the HSBC flash Purchasing Managers' Index. A reading of 50.1 came in for August (a four month high), beating forecasts for 48.2 and rising from last month's 47.7. The index reading indicates an acceleration of expansion in China's manufacturing sector.

 Telstra Limited ((TLS)) acquired a medium sized company that specialises in unified communications North Shore Connections for an undisclosed amount. TLS plans to use the new company to increase its growing network applications and services division. The division is one of the fastest growing areas of TLS as the company tries to find new growth engines to supplement declining revenues from fixed lines and Yellow Pages directory. The division's profit increased 17.7% to about $1.5 billion

Reporting season continues:

Origin Energy Limited ((ORG)) reported a net profit of $378 million for FY13, significantly lower than the $1.04 billion profit a year earlier. The underlying profit declined 15% to $893 million from $760 million a year earlier. ORG said smaller earnings were a result of a series of difficulties encountered in energy markets. The Queensland export gas project ORG is developing is now 45% complete, it said. ORG declared a 25c a share final dividend.

Echo Entertainment Group Limited ((EGP)) reported a net profit of $83.5 million for FY13, up 97.9% from last year. The result came with a disclaimer from EGP, stating that this figure was not strictly comparable to a year earlier, giving an underlying profit of $126.9 million, down 15.5%. EGP chief executive John Redmond said 2014 would be impacted by a number of factors, including subdued economic conditions, win-rate volatility in the VIP business and the impact of impact of regulatory changes. EGP posted a final dividend of a fully franked 2c per share.

Insurance Australia Group Limited ((IAG)) reported a 275% rise in FY13 earnings to $776 million from last year and after its bottom line was boosted by relatively few natural disasters. IAG profit increased 65% to $1.4 billion over the year to June. IAG raised its final dividend to 25c a share, totalling 36c a share for the year and more than doubling the previous year's dividend.

Seven West Media Limited ((SWM)) reported a profit after tax of $225 million, excluding significant items, 1% lower than last year's result but above its own guidance. SWM had total revenues of $1.867 billion, with a statutory net loss of $70 million following the inclusion of significant items of $295 million, which include impairments and restructuring costs. SWM will pay a fully franked dividend of 6c a share in October, with the total dividend now at 12c a share.

Brambles Limited ((BXB)) reported a net profit of U.S. $640.6 million for FY13, up from last year's $574.9 million. BXB said it is expecting sales revenue growth across the business in the current financial year, excluding its Recall division, which is demerging from the company. BXB also said it expected revenue growth in constant currency from all pooling solutions businesses for financial year 2014. BXB will pay a final dividend of U.S. 13.5c, up from 13c, in October.

Pacific Brands Limited ((PBG)) reported FY13 profits of $73.8 million, compared with a $450.7 million loss the year before. Net profit after tax before significant items was $73.8 million, a 1.4% lift from $72.8 million previously. PBG will pay final dividend of 2.5c a share in October; total dividend for the year is 5c.

ASX Limited ((ASX)) reported net income for FY13 of $348.2 million, up 2.7% from the $339.2 million last year. ASX said trading volumes of equity derivatives and interest-rate futures increased. The result was in line with expectations. ASX CEO Elmer Funke Kupper said, "The global economy was generally more stable, this flowed through to improving activity levels in Australia's financial markets as the year progressed."

Cabcharge Australia Limited ((CAB)) reported its statutory profit for FY13 as $60.6 million, up 1% from last year. CAB revenue came in at $196.6 million, an increase of 2.2%. Revenue from taxi service fee lifted to $90.7 million. CAB will pay a final dividend of 12c in October, down from 18 cents.

Toll Holdings Limited ((TOL)) reported a net profit of $92 million for FY13, up 29% from last year. TOL's earnings before interest and tax was $426 million, up close to 4%, which was slightly ahead of market expectations. TOL will pay a final dividend of 14.5c a share in October, up from 13.5c in 2011-12. Total payout for the year is 27c a share.

Fairfax Media Limited ((FXJ)) reported a $16.4 million loss for FY13, including a non-cash impairment charge of $444.6 million. FXJ trimmed losses for the 2013 financial year, but weakness in its regional and agricultural business led to hundreds of millions in impairments. FXJ chief executive officer Greg Hywood said in a statement, "We achieved half of our 12-month target for paid subscribers in the first four weeks since introducing digital subscriptions for Sydney Morning Herald and The Age." FXJ said it was on track to deliver at least $311 million in annualised savings by June 2015.

Fortescue Metals Group LTD ((FMG)) reported a net profit of U.S. $1.74 billion for FY13, way over the forecasted U.S. $1.56 billion. There were reports today that FMG would axe plans to sell down a stake in its infrastructure assets, however FMG said it would retain the option to sell down a stake should a satisfactory offer emerge. They said that they have fielded many offers for the assets, but none that were considered fair value in the current market. FMG will pay a dividend of 10c a share; there were forecasts for a 4c dividend.

Atlas Iron Limited ((AGO)) reported a statutory net loss after tax of $245.1 million, which was impacted by asset write downs of $458.1 million. AGO has been prioritising growth and spent $277 million on improving infrastructure and expanding mines. AGO sold 32% more iron ore than in 2012, and revenue grew by about 13%. AGO will pay a 3c dividend based on the strong cash flows being generated by the company and its plans to increase exports by about 25% in the 2014 financial year.

Treasury Wine Estates Limited ((TWE)) reported that net income for FY13 fell to $42 million, around half of the $89.9 million earned last year. The result smashed analyst expectations of $26 million after a $160 million write down was announced last month as it discounted and destroyed old stock in its U.S. business. TWE said that increased earnings in Asia helped blunt the impact of a write down at its US unit and a weakening dollar this year is raising the local currency returns on wine exports.

Tatts Group Limited ((TTS)) reported net profit for FY13 was $247.3 million, down 22.5% from the $319.1 million profit last year. TTS took a hit when the Victorian government broke up its pokies duopoly with Tabcorp. TTS managing director Robbie Cooke stated that the loss of its Victorian pokies business had distorted its balance sheet.  When excluding the Victorian pokies division, which contributed 46 days to the company's bottom line last financial year, based on continuing operations, full year net profit rose 40.8% to $227.4 million, compared with last year's 161.5 million.

AUD is currently trading at $0.8979, up $0.0009 against the USD.

Top Performers

Discovery Metals Limited ((DML)) up $0.075 or 46.88% to $0.235

Decmil Group Limited ((DCG)) up $0.20 or 9.76% to $2.25

Ardent Leisure Limited ((AAD)) up $0.13 or 7.69% to $1.82

Ten Network Holdings Limited ((TEN)) up $0.02 or 6.90% to $0.31

AWE Limited ((AWE)) up $0.08 or 6.25% to $1.36

Bottom Performers

Atlas Iron Limited ((AGO)) down -$0.095 or -10.22% to $0.835

Magellan Financial Group Limited ((MFG)) down -$1.08 or -9.25% to $10.60

SMS Management & Technology Limited ((SMX)) down -$0.43 or -8.43% to $4.67

Medusa Mining Limited ((MML)) down -$0.22 or -8.09% to $2.50

Resolute Mining Limited ((RSG)) down -$0.08 or -7.92% to $0.93

Our Comments

We have made comments recently that whilst we believe the U.S. market is facing a correction in price here, we also believe the Australian market is being bought on any weakness and looks as if it will hold up well on any overseas sell off. Today was a clear indication of that, considering at one stage today the XJO was down over 70 points and managed to finish only 24 points down.

(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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