Interdum stultus opportuna loquitur...

Friday, June 17, 2005

OzRant: Mindless Optimism Abounds...

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Are we having fun yet? Seems that the entire region has got itself a 1999/2000 mindset again. Nothing could possibly ever go wrong in global equities ever again. how nice it must be to have a mind like a Labrador puppy (or like the Mighty Buddy - the world's greatest Labrador-shepherd cross).

I do not like to make fun of the almost immutable enthusiasm of the Mighty BudBud. However, much as I love the big lug, I would not employ him as a portfolio manager. But to get an idea of the amount of deep thought that is being applied to investment today, take a look at a photo of Buddy-boy...

Big Boy Buddy

That's pretty much a look into the minds of global equity investors at the moment... and although it sounds strange coming from me, it now appears that the pain may come considerably later (and be correspondingly much deeper) than you might think.

In fact if my tea-leaf-reading is correct, we might even be headed for a new Dow record before the next (massive, gut-wrenching) downturn. There will be pullbacks in the interim,  and in fact one ought to start before the end of next week... but at present it would take a considerable technical change to alter that target. Know this, though: valuation is still historically high, and the globe's economic prospects are simply not very good. So this is a last swing for the fences by "da Boyz", luring the last of the little-guys' capital into the market before gutting them like fish.

Major Market Indices

The broad market - the ASX All Ordinaries - rose by a whopping 46.00 points (1.09%), finishing at 4267.30 points - a new closing record, and a new intraday record as well (the market closed at its session high). The low for the day was 4221.3  which was basically the opening print.

Total volume traded on the ASX was 970 million units, 6.4% above its 10-day average (which is now rising back to the 900-million level).

Of the 483 stocks in the index, 277 rose while 100 fell. Volume was tilted in favour of the gainers by a margin of 4.8:1, with 449.64 million shares traded in gainers compared to just 94.35million shares traded in the day's losers. look at that volume tilt again - almost 5:1. When markets get that lopsided, you're at the end of a move, not the beginning.

That said, I have sensibly-derived upside targets that centre on 1300 for the S&P500 before the end of the year. Given that we're not yet halfway through the year, there's a lot that has to happen for those to be hit, and I actually expect for technical conditions to 'refute' that target - but as always I'll publicise any call that I think will be worth watching (it will be revised later). Note that I still do not credit this as a 'bull' market - just a persistent bounce within a generational bear.

The Index that forms the cash basis for the SFE's Share Price Index Futures - the S&P/ASX 200 - rose by 49.40 points (1.16%), finishing at 4312.20 points - its first time ever above 4300. Everybody give a cheer.

The "heavy hitters" of the Australian market - the ASX 20 Leaders - rose by 26.20 points (1.14%), finishing at 2318.00 points (also a record, and only the second-ever close above 2300). Within the index members, there were 18 that rose, and 2 losers. Total volume in rising issues within the ASX20 amounted to 115.49 while volume in the losers totalled 27.31m units.

The major winners in the "big guns" were -

  • BHP Billiton (BHP), +$0.54 (3.05%) to $18.25 on volume of 20.09m shares;
  • Alumina (AWC), +$0.15 (2.64%) to $5.83 on volume of 5.05m shares; and
  • Woodside Petroleum (WPL), +$0.72 (2.62%) to $28.25 on volume of 2.17m shares; and
  • AMP Limited (AMP), +$0.16 (2.42%) to $6.78 on volume of 15.19m shares; and
  • Rio Tinto (RIO), +$1.02 (2.3%) to $45.45 on volume of 3.67m shares.

The only losers in the big-guns were as follows:

  • News Corporation (NWSLV), -$0.19 (0.87%) to $21.60 on volume of 19.16m shares; and
  • Foster's Group (FGL), -$0.04 (0.74%) to $5.34 on volume of 8.15m shares.

At the smaller end of the market's capitalisation scale, the ASX Small Ordinaries Index rose by 24.70 points (1.04%), finishing at 2392.30 points - still almost 50 points from its recent record (3440.50). The major winners in the "pop-guns" were -

  • Capral Aluminium (CAA), +$0.25 (14.58%) to $1.93 on volume of 408,000 shares;
  • Coffey International (COF), +$0.27 (11.25%) to $2.67 on volume of 128,000 shares; and
  • Croesus Mining (CRS), +$0.03 (9.52%) to $0.35 on volume of 11.56m shares; and
  • Equigold (EQI), +$0.09 (8.42%) to $1.10 on volume of 1m shares; and
  • AAV (AVV), +$0.09 (7.36%) to $1.24 on volume of 748,000 shares.

The losingest-little-guys for the session were (in order of decline):

  • Schaffer Corporation (SFC), -$0.42 (6.59%) to $5.95 on volume of 32,000 shares;
  • Multiemedia (MUL), -$0.00 (6.25%) to $0.02 on volume of 1.97m shares; and
  • Miller's Retail (MRL), -$0.04 (4.43%) to $0.76 on volume of 1.42m shares; and
  • Novogen (NRT), -$0.17 (3.17%) to $5.20 on volume of 313,000 shares; and
  • Citect Corporation (CTL), -$0.03 (2.91%) to $0.84 on volume of 164,000 shares.
Index Changes
XAOAll Ordinaries4267.3461.09%662.8m
XTLS&P/ASX 20231826.21.14%142.8m
XFLS&P/ASX 504256.449.51.18%289.96m
XTOS&P/ASX 1003504.840.81.18%443.26m
XJOS&P/ASX 2004312.249.41.16%534.22m
XKOS&P/ASX 3004304.549.51.16%0
XMDS&P/ASX Mid-Cap 504162.748.31.17%0
XSOS&P/ASX Small Ordinaries2392.324.71.04%186.99m

All Ordinaries Market Internals

Market Breadth

Advancing Volume115.49m325.77m396.31m449.64107.43627.2
Declining Volume27.31m70.15m70.36m94.3542.54227.23

S&P/ASX200 GICS Sector Indices

The top sector for the day was Materials which gained 2.39% to 7363.90 points. The sector was helped by

  • Capral Aluminium (CAA), +$0.25 (14.58%) to $1.93 on volume of 408,000 shares;
  • Croesus Mining (CRS), +$0.03 (9.52%) to $0.35 on volume of 11.56m shares; and
  • Onesteel (OST), +$0.15 (5.77%) to $2.75 on volume of 5.83m shares; and
  • Kingsgate Consolidated (KCN), +$0.15 (5.56%) to $2.85 on volume of 282,000 shares; and
  • Timbercorp (TIM), +$0.11 (5.31%) to $2.18 on volume of 773,000 shares.

Second in the sector leadership stakes was Energy which gained 2.16% to 9270.70 points. The sector leaders were -

  • Hardman Resources (HDR), +$0.07 (3.38%) to $2.14 on volume of 4.68m shares;
  • Santos (STO), +$0.35 (3.33%) to $10.86 on volume of 1.6m shares; and
  • Woodside Petroleum (WPL), +$0.72 (2.62%) to $28.25 on volume of 2.17m shares; and
  • Arc Energy (ARQ), +$0.04 (1.82%) to $1.96 on volume of 314,000 shares; and
  • Origin Energy (ORG), +$0.08 (1.05%) to $7.70 on volume of 5.87m shares.

The bronze today went to Information Technology which gained 1.86% to 404.50 points. The sector was led by

  • Computershare (CPU), +$0.19 (3.09%) to $6.33 on volume of 3.16m shares;
  • MYOB (MYO), +$0.02 (1.82%) to $1.12 on volume of 470,000 shares; and
  • Infomedia Ltd (IFM), +$0.01 (0.93%) to $0.54 on volume of 417,000 shares; and
  • Vision Systems (VSL), +$0.01 (0.85%) to $1.19 on volume of 374,000 shares; and
  • ERG (ERG), -$0.00 (0%) to $0.27 on volume of 1.54m shares.

There were no losing sectors today - like the American state school system, nobody failed; everybody's gifted.

Sector Indices
CodeGICS SectorClose+/-%Volume
XIJInformation Technology404.57.41.86%6.96m
XXJASX200 Financials ex Property Trusts5223.648.50.94%72.13m
XDJConsumer Discretionary2289.419.10.84%60.55m
XPJProperty Trusts1832.214.50.8%125.96m
XSJConsumer Staples56279.70.17%37.42m

All Ordinaries Major Movers

All Ords Volume Leaders
BHPBHP Billiton18.250.543.05%20.09m
MXGMultiplex Group2.83-0.01-0.35%18.32m
NWSNews Corporation23.270.421.84%18.19m
TLSTelstra Corporation5.140.010.19%18.06m
CUECue Energy Resources0.320.038.47%16.26m
WMRWMC Resources7.8500%16.24m

All Ords Percentage Gainers
CAACapral Aluminium1.930.2514.58%408452
SRISipa Resources0.0740.00812.12%5.48m
CRSCroesus Mining0.350.039.52%11.56m

All Ords Percentage Decliners
SFCSchaffer Corporation5.95-0.42-6.59%32340
UNIUnilife Medical Solutions0.62-0.04-6.06%448912
MRLMiller's Retail0.76-0.04-4.43%1.42m
MSTMetal Storm0.13-0.01-3.7%564593

Elsewhere in the Region...


Japan's Nikkei 225rose 97.65 points (0.86%) to close at 11514.03 points - also its high for the day. The index opened with a gap up to the high 11460's, and traded sideways from there until the last half-hour, when a burst took it above 11500.

The Kiwi Market advanced 17.77 points (0.56%) to close at 3181 and change, in another coast-to-coast job (although it was really undertaken in two steps - a big rush early in the session, and the closing pump that characterised the entire region today). The index hit a high of 3185.318 in the last 15 minutes of the session, and its low of 3163.246 points was set at the open.

A total of 31 stocks within the NZSE50 rose, with volume in advancers totalling 15.5 million units. Decliners numbered 10, and total volume traded in losers was just 3 million shares. Individual stocks outperformed included...

  • AMP Limited (AMP), +NZ$0.20 (2.82%) to NZ$7.30 on volume of 11,000 shares;
  • Skellmax Industries (SKX), +NZ$0.03 (2.46%) to NZ$1.25 on volume of 39,000 shares;
  • Fletcher Building (FBU), +NZ$0.14 (2.11%) to NZ$6.78 on volume of 1.51m shares;
  • Sanford Limited  (SAN), +NZ$0.08 (1.87%) to NZ$4.35 on volume of 15,000 shares;
  • Tower Limited Ord (TWR), +NZ$0.04 (1.87%) to NZ$2.18 on volume of 2.03m shares; and
  • Auckland International Airport (AIA), +NZ$0.04 (1.81%) to NZ$2.25 on volume of 1.02m shares.

Hong Kong's Hang Seng index opened with a little dip (down to 13847.50), then rocketed up to 13926.59 in less than 20 minutes. Having set its day's trading range in the first half hour, it then proceeded to settle at lunchtime in the mid-range. At lunch it is sitting on a gain of 58.53 points (0.42%) at 13892.06 - the exact mid-point of the trading range is 13886.5 points.

Within the Hang Seng, 25 index components rose, while 3 stocks fell. Volume in the gainers in Hong Kong's big-cap index totalled 69.9million units, and total volume traded in losers was 114.4million shares. Individual stocks that contributed to the advance included...

  • Esprit Holdings (0330), +HK$1.00 (1.95%) to HK$52.25 on volume of 2.92m shares;
  • Henderson Land (0012), +HK$0.60 (1.72%) to HK$35.50 on volume of 1.04m shares;
  • Li & Fung (0494), +HK$0.25 (1.72%) to HK$14.80 on volume of 4.46m shares;
  • China Unicom (0762), +HK$0.10 (1.61%) to HK$6.30 on volume of 2.82m shares;
  • CKI Holdings (1038), +HK$0.35 (1.5%) to HK$23.65 on volume of 373,000 shares; and
  • China Resources (0291), +HK$0.15 (1.34%) to HK$11.35 on volume of 1.52m shares.
Regional Indices
New ZealandNZSE503181.01117.770.56%23.61m
JapanNikkei 22511514.0397.650.86%0
SingaporeStraits Times2210.948.20.37%0
Hong KongHang Seng13892.0658.530.42%204.24m
MalaysiaKLSE Comp896.26-1.78-0.2%0