Month: September 2015
Some local gold stocks are glistening as the precious metal dulls?Good morningOverviewWell, the market action in Australia yesterday was suggesting a significant fall in the US markets overnight. But, again, it didn’t happen with quite the opposite taking place. Our market will open up around 1% today. Patience and continuing to watch the messages the markets are telling us are key. As we say in Chart 6, some further sideways action followed by a sharp spike down would not surprise but we would see this as an excellent buying opportunity.Turning to the MarketsAt Market Matters we have been looking for a strong counter trend rally in gold for weeks but the looming interest rate rise in the US is, understandably, putting pressure on the precious metal and we have been getting frustrated. However, some things are catching our eye that we cannot fully explain!!Over the last four weeks Northern Star Resources (NST) has rallied 20.5% but during the same period gold has fallen over $US70/oz (5.5%). Similarly, over the last four weeks Regis Resources (RRL) has rallied 16% but Australia’s largest gold producer Newcrest Mining (NCM) is basically unchanged.So, let’s let look individually at these three local gold stocks:
- For a change, the ASX 200 went up from the opening and after a brief lapse of sideways movement, continued steadily up from there. The index finished up 80 points (+1.6%) to 5,099.
- The energy sector was the strongest today with Woodside Petroleum (WPL) up 3.0% to $29.10. Santos (STO) enjoyed a 5.4% move higher to close at $4.90 whilst Caltex (CTX) was up 3.3% to $31.42.
- The banks were well sought after as well, Australia New Zealand Bank (ANZ) closed up 74c (+2.7%) to $27.88. Commonwealth Bank (CBA) rose $2.63 (+2.6%) to $75.35, National Australia Bank (NAB) closed up 68c (+2.3%) to $30.51 and lastly Westpac (WBC) up 87c (+2.9%) to $31.07.
- All eyes will be on the 2-day US FOMC meeting, where there is currently only a 32% consensus of a rate hike in the US this month.
Best Sector – Energy
Australians are waking up to Malcom Turnbull as their 5th prime minister in just over 5 years! Frankly a ridiculous situation and certainly not a stable nor professional picture for overseas investors.
- The ASX 200 opened near its highs, only to fade and close off its lows, down 78 points (-1.5%) to 5,018.
- The bank sector led the weakness today, with Westpac (WBC) being the weakest link, ending 2.6% lower at $30.20.
- The broader commodities sector also experienced the sea of red as South32 (S32) dropped 7.5% lower to $1.545.
- The diamond in the rough today was Seven West Media (SWM) up 6.5% to $0.74 after announcing a $75m buyback to its investors.
- There were other hidden gems today – Regis Resources (RRL) rallied 3.6% higher to $1.59 and telco, Vocus Communications (VOC) up 1% at $6.21.
Best Sector – Consumer Staples
Interest Rates & China are in the news but NZ is interesting!
- The ASX 200 was again very volatile today after a strong start. The market finished up 25 points (+0.5%) to 5,096.
- The banks were generally strong with the exception of Commonwealth Bank (CBA) which closed down 58c (-0.8%) to $74.55 after it reported that its capital raising was completed, raising $5.1b. Westpac Bank (WBC) was the strongest today, up 1.6% to $30.99 whilst National Australia Bank (NAB) closed up 1.2% to $30.54.
- Macquarie Bank (MQG) climbed $1.77 (+2.3%) to $77.57 on news that it expects a 40% profit in the first half ending September.
- Cardno (CDD) rallied 15% higher after one of its substantial shareholder; Crescent Capital Investments Pty Ltd announced its intention to make a proportional off-market offer to acquire 1 of every 2 shares held by CDD (other than itself) for a consideration of $3.50/share.
Best Sector – Utilities
Yesterday’s price action in our markets suggested the US markets would be down significantly overnight. Instead the DJI was up 76 pts and S&P500 up 10 pts! More evidence that investors need to stand back from these markets and pick the right opportunities.
- The ASX 200 played its usual game of weakening early in the session, to then trade in positive territory by lunch. From there it drifted and closed points or 0.5% higher at 5,071.
- The banking sector was quiet after earlier weakness when Commonwealth Bank (CBA) requested a trading halt to its shares prior to the market opened. It was reported that they have brought forward the retail book build by one day. It’s understood that 50% of shareholders didn’t take up their entitlement.
- National Australia Bank (NAB) managed to scrape into the black, up 1c to $30.34, while the remaining of the big four were slightly down. Australia New Zealand Bank (ANZ) down 13c to $27.52 and Westpac Bank (WBC) down 26c to 26.5c$26.5
- The miners were mixed with RIO Tinto (RIO) out shining the pack, up $0.73 (+1.4%) to $52.00. BHP Billiton (BHP) conversely was very quiet, drifting from positive to negative, then remaining negative later in the day, closing down 13c to $23.79.
- The oil stocks were sold down even though there was a pickup in the oil price over night. Woodside Petroleum (WPL) and Oil Search (OSH) were both down. WPL closed at $28.60 down 1.9% and OSH was down 1.6% $7.45.
Best Sector – IT
Well, another wild night on the US markets after impressive upwards moves in stock prices across the Asia Pacific yesterday and then into Europe and early US. Last night the Dow fell 239 points after being up 172 points early in the day and up an impressive 390 points the previous day! Readers will note that while we have been positive our markets we have also been calling for a reasonable degree of choppiness / volatility as the markets attempt to absorb the conflicting world news stories.
- Just when investors felt that the recent selling was over, the fear factor rolled back into play. The ASX 200 shed 2.4% to 5,095.
- All Major sectors contributed to the red sea, with the Energy sector being the weakest link as expected. Woodside Petroleum (WPL) lost 2.6% at 29.13, while Santos (STO) was down 5.1% at $4.43
- In the Banking sector, National Australia Bank (NAB) disappointed the most, down 3.5% to $30.18.
- As expected, Woolworths (WOW) and its joint venture partner in Master’s injected more provided further capital ($90m)… will this be the turning point? WOW closed -2.2% at $24.76.
Really bullish, there's more to go in the reflation rally
Please enter your login details
Forgot password? Request a One Time Password or reset your password
One Time Password
Check your email for an email from [email protected]
Subject: Your OTP for Account Access
This email will have a code you can use as your One Time Password for instant access
To reset your password, enter your email address
A link to create a new password will be sent to the email address you have registered to your account.
Enter and confirm your new password
Congratulations your password has been reset
Sorry, but your key is expired.
Sorry, but your key is invalid.
Something go wrong.
Only available to Market Matters members
Hi, this is only available to members. Join today and access the latest views on the latest developments from a professional money manager.
Smart Phone App
Our Smart Phone App will give you access to much of our content and notifications. Download for free today.
