Interdum stultus opportuna loquitur...

Monday, November 29, 2004

Another Record... Thundering Hooves...

Note - from June 24th 2009, this blog has migrated from Blogger to a self-hosted version. Click here to go straight there.

Late, late late... spent the day looking at some footage which, if it ever saw a courtroom, would be make for the most explosive session in the history of Australian jurisprudence. I said at the time, no retard can shoot that good.

It was a "green number" day for much of the resources sector - particularly Energy-related stocks, which was among the hottest market sectors, gaining 1.04% for the day.

WMC Resources (WMR) continues to benefit from the board's refusal to accept the XStrata bid (which values the company at $7.4 billion, or $6.35 a share); the shares finished unchanged at $7.26, having been as high as $7.32 (a gain of 0.8%). People are still punting on the arrival of some other White Knight, or an improved offer from XStrata... XStrata should ust tell the WMR board to get stuffed, and see how their stock options go... but since senior executives around the globe are as thick as theives, it's unlikely.

Rio Tinto (RIO) rose 0.56% to $9.16 after being down earlier in the session, while BHP Billiton (BHP) fell 0.77% to $15.28, after rising a lazy 8% last week after its buyback was announced.

Why a buyback? Why not a special dividend? Answer: executive options.

If you give shareholders cash in the form of dividends, nothing much happens to the stock price as a result, and the bucketloads of options in the executive compensation system simply stagnate. These options, it must be remembered, represent a hugely leveraged, one-sided bet on the stock price, which encourages risky behaviour and short-term, stock-price focussed planning.

A buyback, on the other hand, gives investors a sense that there is a "Management Put" - similar to the "Greenspan Put" from when folks believed in central-wanker omniscience - whereby downside risk to the stock price is mitigated by the fact that there is an unnaturally large bid for the stock as a result of the buyback.

Also on the buyback rumour mill, talk that Fosters Group (FGL) would rather waste company cash on buying back almost 10% of its issued stock - $1 billion worth - in preference to giving people tax-effective distributions in the form of dividends (there's that executive options package thing again) gave FGL legs to the tune of 2.8% with the stock rising to $5.50 - a new 52 week high (in fact, the highest level in three years).

Retailers like Woolworths (WOW +1.8% to $15.09) and Coles-Myer (CML, +1.4% to $10.03) helped the Consumer Staples sector to shine.

Consumer Staples... God stab my vitals. Wasn't it better before they introduced these wanker sector labels? What was wrong with Coles being a retail stock? Does Myer or Grace Brothers sell "staples"? The marketing-degree-holding dickhead who introduced GICS to the ASX should be hung by his feet in the town square, a la Mussolini.

Major Market Indices

XAOAll Ordinaries3938.115.20.39%473.67m
XTLS&P/ASX 202094.9100.48%92.6m
XFLS&P/ASX 503856.8160.42%155.9m
XTOS&P/ASX 1003186.312.30.39%255.09m
XJOS&P/ASX 2003926.814.70.38%354.97m
XKOS&P/ASX 3003935.814.30.36%419.27m
XMDS&P/ASX Mid-Cap 503859.57.10.18%99.19m
XSOS&P/ASX Small Ordinaries2314.43.90.17%164.18m

Market Internals

Although the All Ords rose an apparently-solid 0.38% to a new high, the market breadth contracted slightly, with advancers and decliners in equal numbers within the index.

Volume was concentrated in the advancers by about 5:3 (252m to 153m), with a solid 23million shares volume in Telstra - about 10% of advancing volume in one stock.

Advancing Volume (m)251.68
Declining Volume (m)153.22

S&P/ASX200 GICS Sector Indices

CodeGICS SectorClose+/-%Volume
XDJConsumer Discretionary2327.920.60.89%30.26m
XSJConsumer Staples5438.276.61.43%28.21m
XIJInformation Technology370.44.11.12%4.51m
XPJProperty Trusts1763.210.06%46.04m
XXJASX200 ex Property Trusts4643.311.80.25%52.88m

All Ordinaries Volume Leaders

NLXNylex Ltd0.40.012.6%16.53m
MULMultiemedia Com0.03200%15.03m
HHGHHG Plc1.170.010.86%14.53m
HDRHardman Rsc1.85-0.12-6.09%14.16m

All Ordinaries Top 5 % Gainers

BBBB Digital0.450.0511.11%524762
HWEHenry Walker Elt0.520.0510.64%9.48m
SSTSteamships Tradg3.20.310.34%2300
PMEPro Medicus1.210.1110%210600
ARQArc Energy1.380.096.98%1.31m

All Ordinaries Top 5 % Losers

PEPRPeplin Rights0.011-0.01-45%1.68m
SSSSam's Seafood1.2-0.2-14.29%110075
IHGIntellect Hldgs0.040-6.98%3.37m
TIRTitan Rsc0.21-0.02-6.67%640500

Elsewhere in the Region...

It was Monday... we are all Americans now...

New ZealandNZSE502988.30419.810.67%15.42m
JapanNikkei 22510977.89144.141.33%73906
SingaporeStraits Times2037.939.50.47%70.32m
Hong KongHang Seng14092.86197.831.42%182.05m
MalaysiaKLSE Comp913.474.690.52%75.44m

Main SFE Futures Contracts

SPI04ZSPI200 Index SFE3939130.33%9093
IR04Z90-day Bank Bills SFE94.680.050.05%60633
YT04Z3-yr Bond SFE94.980.040.04%73633
XT04Z10-yr Bond SFE94.770.030.03%18895