Australian Stocks: What Happened Today?

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            [0] => ((BBG))
            [1] => ((TSE))
            [2] => ((NWH))
            [3] => ((ASL))
            [4] => ((SIR))
            [5] => ((DML))
            [6] => ((OGC))
            [7] => ((RSG))
            [8] => ((SLR))
            [9] => ((SBM))
        )

    [1] => Array
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            [0] => BBG
            [1] => TSE
            [2] => NWH
            [3] => ASL
            [4] => SIR
            [5] => DML
            [6] => OGC
            [7] => RSG
            [8] => SLR
            [9] => SBM
        )

)

This story features NRW HOLDINGS LIMITED, and other companies.
For more info SHARE ANALYSIS: NWH
The company is included in ASX200, ASX300 and ALL-ORDS

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

Australian Market

The Australian market (XJO) closed up 54.0 points or 1.05% to 5087.2 today. We opened the week with strong manufacturing numbers out of China and a bunch of local economic figures despite over 30 companies trading ex dividend (including BHP). While the SPI was pointing slightly lower and we saw a relatively weak lead from the U.S. on Friday, the XJO rose from just after the open til about 12pm, to have a small pull back and hit the daily high of 5191.1 at 2:10pm to close a few points off. The best performing sector was Consumer Discretionary, gaining 2.17%, while the worst sectors were Gold and Utilities, falling -0.58% and -0.21%. All other sectors were positive for the day.

In economic news, the AI Group performance of manufacturing index for August has come in at 46.4, up from 42 in July. Manufacturing hasn't posted a monthly rise since June 2011 however the rate of decline is slowing. Three of the eight manufacturing sub-sectors showed a rise in activity, with food beverage and tobacco products recording the strongest reading. The petroleum, coal, chemical and rubber subsector expanded, while printing and recorded materials also had a gain and Metal products remained the weakest sector. Australian Industry Group chief executive Innes Willox said, "The fall in the value of the Australian dollar is beginning to be felt, with some businesses reporting improved competitiveness against imports. However, exports continue to struggle, while the lower dollar is also pushing up average costs for non-labour inputs, many of which are imported."

The TD Securities/Melbourne Institute Inflation Gauge for August rose 0.1%, less than the 0.5% rise in July. The annual rate to August was 2.1%, down from 2.7% in July. This result signals a higher possibility for another RBA rate cut.

The Australian Bureau of Statistics (ABS) says building approvals increased 10.8% to 14,304 in July, exceeding the expectations of analysts. The result is up from 12,778 approvals in June, and well ahead of Bloomberg economist estimates of a 4% rise. Over the year to July, building approvals are up 28.3%.

And the ABS business indicators for the June quarter showed a 0.8% fall in company gross operating profits. A Reuters poll forecasted a 0.7% rise. Estimated business inventories meanwhile rose 0.2% in the quarter, slightly ahead of expectations.

The RP Data-Rismark Home Value Index shows that Australian capital city home prices have risen over 5% in the past year. Home prices across the eight state and territory capitals rose 5.3% in the 12 months to August, with Perth experiencing the biggest increase during the year, with home prices up more than 9%, while Sydney's were up 7%. Hobart came out the worst, with prices down 1.1% for the year.

In China on Sunday the China Federation of Logistics and Purchasing (CFLP)´s purchasing managers index rose from 50.3 to 51.0 in August, its highest level in 16 months and beating forecasts for a result near 50.6. While the final HSBC/Markit PMI climbed to 50.1 in August, up sharply from July's 47.7 and in line with last week's flash reading. The official PMI is more weighted towards bigger and state-owned firms, which have easier access to credit and the scale to cope better with downturns. A reading above 50 indicates growth.

Rio Tinto Limited (RIO) has loaded the first shipment of iron ore from its 290Mt/a expansion program of port, rail and mine operations in Western Australia. The shipment is the commencement of commissioning of the expansion program, which will see overall capacity for Rio's WA operations increase to 290 million tonnes annually. RIO chief executive Andrew Harding said, "The 290 project is the largest integrated mining project in Australia".

Transfield Services Limited (TSE) outgoing chairman of the board Tony Shepherd will be replaced by an independent non-executive Director Diane Smith Gander. Smith Gander also holds non-executive directorships on the boards of WES and CBH Group, as well as being a Commissioner of Tourism Western Australia. Mr Shepherd says the appointment is ideal and Smith Gander will aptly continue to oversee the board's turnaround of Transfield. Smith Gander has been a non-executive director at TSE since 2010 and will quit her role as deputy chairman of NBN Co as a result, to avoid any conflict of interest because of TSE's role as a lead contractor on the national broadband network project.

Billabong International Limited (BBG) has received a notice that the New York based Coastal Capital Investments is requesting a general meeting of shareholders to potentially block a recapitalisation of the group and dump its board of directors. One of the motions is expected to be an amendment to Billabong's constitution over the approval of future debt or equity financing arrangements. Coastal Capital is said to own a 5% stake in BBG.

 AUD is currently trading at $0.8971 up $0.0075 against the USD.

Top Performers

Billabong International Limited ((BBG)) up $0.06 or 14.12% to $0.485

Transfield Services Limited ((TSE)) up $0.11 or 9.61% to $1.255

NRW Holdings Limited ((NWH)) up $0.11 or 8.03% to $1.48

Ausdrill Limited ((ASL)) up $0.10 or 6.80% to $1.57

Sirius Resources Limited ((SIR)) up $0.18 or 6.50% to $2.95

Bottom Performers

Discovery Metals Limited ((DML)) down -$0.015 or -9.68% to $0.14

Oceanagold Corporation ((OGC)) down -$1.98 or -0.11% to $5.26

Resolute Mining Limited ((RSG)) down -$0.04 or -4.19% to $0.915

Silver Lake Resources Limited ((SLR)) down -$0.04 or -4.08% to $0.94

St Barbara Limited ((SBM)) down -$0.025 or -3.11% to $0.78

Our Comments

We have seen the bulk of companies report now for this particular season. Fewer companies are reporting profits than the previous corresponding period. However the ones that are reporting profits, are increasing them year on year. Overall for fiscal 2013 profits dropped by around 0.5% which was thanks largely to the mining sector and mining services…no surprises there. Overall I would say it has been better than expected as expectations were very low and that has been reflected in the market holding up well here above 5000. 

We need to be very diligent in how we select companies to invest in as the market is selling off weaker companies quicker than before. Any signs of profit downgrades and a 10% drop has been on the light side. 

The U.S. markets are closed tonight the labor day holiday.

(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.

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