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What is it about Mondays? It's as if the minds of 'investors' are re-formatted each weekend, and all the to-ing and fro-ing, the geopolitical risks, the slow decline of western democracies into Police States, are wiped as if from a palimpsest, with only faint traces remaining.
Obviously some of the weekly amnesia is the result of larger proportions of the 'investment' community being educated in post-1970s government schools, which declined dramatically when American sociological and educational nostrums gripped the feeble minds of education bureaucrats.
I also surmise that the 'investment' community quite likes the idea of the populace being trod under the jackboot of a militarised State; after all, it ensures a steady stream of taxpayer dollars being diverted to political favourites (although with John Anderson gone, QANTAS is less prone to getting out-and-out nepotistic political advantage).
The history of the relationship of financial intermediaries with absolute tyrants is a long one which makes interesting reading; the corporatocracy lined up squarely behind Mussolini and Hitler... and not just indigenous Italian or German plutocrats, either. Everyone now knows that Bush's grand-pappy (Prescott) did loads of dealing with the Nazi regime - even after the US and Germany were at war: eventually his assets were frozen in 1942 under the Trading With The Enemy Act. And of course major oil companies have a long history of lying down with tyrants in the Middle East (and they're not averse to funding the odd massacre, either - e.g., Shell in Nigeria).
Even so, markets have an easily-observed tendency to revert to 'sensible' measures of valuation - and economies have a tendency to revert to 'sensible' rates of component growth. No component can grow faster than GDP for long enough to justify an investment methodology (for example, one that relies on profits growing faster than GDP for ten years or more).
Once you realise this - that if any large company's profits grows by substantially more than GDP for more than 20 years, it will wind up being the whole economy - you realise that a multiple of 20x earnings for the ASX20 is simply ludicrous since it relies on growth of substantially more than GDP growth. Add to that the fact that at present we have a situation where the GoS share of GDP by factor payments is close to a record (and is therefore likely to fall), which means that profits growth over the next decade is likely to be slower than GDP.
The 'investment community' is taking a very pointed bet, and it's a long shot. It's betting that above-normal profits growth will 'bail out' investment in an overvalued market, at a time when profits growth has almost certainly peaked. For most money mismanagers, that doesn't really matter since their retirement doesn't depend on investment returns - it depends on their ability to 'clip the tickets' of their customers. Financial planners, stockbrokers, fund managers and the host of parasites that swarm on Everyman's super contributions - none of them ever eat their own cooking; they rely on pocketing their fee.
And at the moment they're making hay - and making sure that their client's aren't told about the cracks in the foundations.
Major Market Indices
The broad market - the ASX All Ordinaries (XAO) - rose by 31.00 points (0.69%), finishing at 4547.80 points. The index opened at its low (4516.8), and over the next 3½ hours floated gently to its intraday high of 4553.60 (4550-ish).
Total volume traded on the ASX was 980 million units, 2.0% below its 10-day average. Of the 486 stocks in the index, 178 rose while 105 fell. Volume was tilted in favour of the gainers by a margin of 2.1:1, with 365.89million shares traded in gainers while 176.34million shares traded in the day's losers.
The Index that forms the cash basis for the SFE's Share Price Index Futures - the S&P/ASX 200 (XJO) - rose by 34.10 points (0.75%), finishing at 4608.40 points.
The "heavy hitters" of the Australian market - the ASX 20 Leaders (XTL) - rose by 19.40 points (0.79%), finishing at 2488.30 points. Within the index members, there were 16 that rose, and 4 losers. Total volume in rising issues within the ASX20 amounted to 104.27 while volume in the losers totalled 11.1m units.
The major winners in the "big guns" were -
- Rio Tinto (RIO), +$1.530 (2.56%) to $61.240 on volume of 2.39m shares;
- Alumina (AWC), +$0.150 (2.4%) to $6.400 on volume of 4.7m shares;
- BHP Billiton (BHP), +$0.480 (2.27%) to $21.600 on volume of 17.32m shares;
- Rinker Group (RIN), +$0.290 (1.89%) to $15.600 on volume of 4.03m shares; and
- AMP Limited (AMP), +$0.120 (1.65%) to $7.400 on volume of 5.95m shares.
The following stocks made up the biggest percentage losers in the big-guns:
- Woodside Petroleum (WPL), -$0.200 (0.63%) to $31.600 on volume of 1.86m shares;
- Westpac Banking Corporation (WBC), -$0.13 (0.58%) to $22.32 on volume of 5.58m shares;
- Foster's Group (FGL), -$0.01 (0.17%) to $5.75 on volume of 2.58m shares; and
- Macquarie Bank (MBL), -$0.10 (0.14%) to $69.90 on volume of 1.08m shares.
At the smaller end of the market's capitalisation scale, the ASX Small Ordinaries Index (XSO) - the only place where underexploited value exists with any regularity - rose by 14.50 points (0.57%), finishing at 2549.70 points. The major winners in the "pop-guns" were -
- SDI (SDI), +$0.090 (11.25%) to $0.890 on volume of 99,000 shares;
- Macmahon Holdings (MAH), +$0.035 (6.42%) to $0.580 on volume of 1.77m shares; and
- Redflex Holdings (RDF), +$0.180 (5.08%) to $3.720 on volume of 614,000 shares; and
- Petsec Energy (PSA), +$0.070 (4.76%) to $1.540 on volume of 154,000 shares; and
- Ramsay Health Care (RHC), +$0.410 (4.41%) to $9.710 on volume of 336,000 shares.
The losingest-little-guys for the session were (in order of decline):
- Austral Coal (AUO), -$0.330 (22%) to $1.170 on volume of 1,000 shares;
- Lynas Corporation (LYC), -$0.010 (7.69%) to $0.120 on volume of 291,000 shares; and
- Multiemedia (MUL), -$0.001 (7.14%) to $0.013 on volume of 54.25m shares; and
- Kresta Holdings (KRS), -$0.010 (4.35%) to $0.220 on volume of 12,000 shares; and
- AV Jennings Homes (AVJ), -$0.055 (4.28%) to $1.230 on volume of 594,000 shares.
Index Changes
| Code | Name | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| XAO | All Ordinaries | 4547.8 | 31 | 0.69% | 607.5m |
| XTL | S&P/ASX 20 | 2488.3 | 19.4 | 0.79% | 0 |
| XFL | S&P/ASX 50 | 4526.9 | 36.7 | 0.82% | 222.11m |
| XTO | S&P/ASX 100 | 3745.8 | 28.1 | 0.76% | 368.65m |
| XJO | S&P/ASX 200 | 4608.4 | 34.1 | 0.75% | 428.53m |
| XKO | S&P/ASX 300 | 4599.3 | 33.8 | 0.74% | 0 |
| XMD | S&P/ASX Mid-Cap 50 | 4572.9 | 17.9 | 0.39% | 0 |
| XSO | S&P/ASX Small Ordinaries | 2549.7 | 14.5 | 0.57% | 187.82m |
All Ordinaries Market Internals
Market Breadth
| ASX20 | XTO | XJO | XAO | XSO | Market | |
|---|---|---|---|---|---|---|
| Advances | 16 | 72 | 120 | 178 | 85 | 487 |
| Declines | 4 | 17 | 52 | 105 | 70 | 441 |
| Advancing Volume | 104.27m | 291.5m | 340.79m | 365.89 | 75.81 | 550.68 |
| Declining Volume | 11.1m | 51.01m | 75.56m | 176.34 | 95.12 | 326.5 |
S&P/ASX200 GICS Sector Indices
The top sector for the day was XMJ Materials which gained 2.03% to 8600.80 points. The sector was helped by
- Oxiana (OXR), +$0.050 (3.79%) to $1.370 on volume of 8.51m shares;
- Paperlinx (PPX), +$0.110 (3.34%) to $3.400 on volume of 1.53m shares;
- Aquarius Platinum (AQP), +$0.350 (3.3%) to $10.950 on volume of 50,000 shares;
- James Hardie Industries N.V. (JHX), +$0.250 (3.02%) to $8.540 on volume of 1.32m shares; and
- Onesteel (OST), +$0.100 (2.86%) to $3.600 on volume of 3.54m shares.
Second in the sector leadership stakes was XIJ Information Technology which gained 0.86% to 447.50 points. The sector leaders were -
- ERG (ERG), +$0.005 (4%) to $0.130 on volume of 3.68m shares;
- Vision Systems (VSL), +$0.060 (3.64%) to $1.710 on volume of 515,000 shares;
- Infomedia Ltd (IFM), +$0.015 (2.83%) to $0.545 on volume of 173,000 shares;
- MYOB (MYO), +$0.025 (2.24%) to $1.140 on volume of 2.91m shares; and
- IRESS Market Technology (IRE), +$0.070 (1.62%) to $4.400 on volume of 356,000 shares.
The bronze today went to XNJ Industrials which gained 0.80% to 5261.00 points. The sector was led by
- Leighton Holdings (LEI), +$0.550 (3.56%) to $16.000 on volume of 1.01m shares;
- Toll Holdings (TOL), +$0.390 (2.98%) to $13.480 on volume of 1.15m shares;
- Corporate Express Australia (CXP), +$0.130 (2.2%) to $6.030 on volume of 47,000 shares;
- Transfield Services (TSE), +$0.140 (1.88%) to $7.590 on volume of 984,000 shares; and
- Coates Hire (COA), +$0.080 (1.7%) to $4.780 on volume of 530,000 shares.
The worst-performed sector today - the only sector that registered a loss for the session - was XEJ Energy which lost 0.42% to 9794.20 points. The sector was dragged lower by
- Australian Worldwide Exploration (AWE), -$0.040 (2.01%) to $1.950 on volume of 2.21m shares;
- Caltex Australia (CTX), -$0.370 (1.79%) to $20.330 on volume of 747,000 shares;
- Oil Search (OSH), -$0.040 (1.25%) to $3.170 on volume of 9.48m shares;
- Hardman Resources (HDR), -$0.020 (1.06%) to $1.860 on volume of 5.33m shares; and
- Woodside Petroleum (WPL), -$0.200 (0.63%) to $31.600 on volume of 1.86m shares.
Sector Indices
| Code | GICS Sector | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| XMJ | Materials | 8600.8 | 171.1 | 2.03% | 116.75m |
| XIJ | Information Technology | 447.5 | 3.8 | 0.86% | 8.97m |
| XNJ | Industrials | 5261 | 41.9 | 0.8% | 57.43m |
| XHJ | Healthcare | 6142.9 | 42.9 | 0.7% | 7.14m |
| XPJ | Property Trusts | 1854.5 | 9.2 | 0.5% | 102m |
| XDJ | Consumer Discretionary | 2228.1 | 10.6 | 0.48% | 29.17m |
| XTJ | Telecommunications | 1569 | 6.9 | 0.44% | 50.17m |
| XFJ | Financials | 5479.8 | 23.2 | 0.43% | 144.43m |
| XXJ | ASX200 Financials ex Property Trusts | 5665.5 | 22.9 | 0.41% | 45.16m |
| XSJ | Consumer Staples | 5960.7 | 20.1 | 0.34% | 21.93m |
| XUJ | Utilities | 5262.2 | 0.1 | 0% | 3.08m |
| XEJ | Energy | 9794.2 | -41.7 | -0.42% | 26.5m |
All Ordinaries Major Movers
All Ords Volume Leaders
| Code | Name | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| TLS | Telstra Corporation | 4.32 | 0.01 | 0.23% | 47.54m |
| BTA | Biota Holdings | 1.82 | -0.13 | -6.43% | 26.89m |
| BHP | BHP Billiton | 21.6 | 0.48 | 2.27% | 17.32m |
| CPA | Commonwealth Property Office Fund | 1.21 | 0.01 | 0.42% | 14.41m |
| QAN | Qantas Airways | 3.72 | 0.06 | 1.64% | 13.6m |
| LHG | Lihir Gold | 2.05 | 0.05 | 2.5% | 13.01m |
All Ords Percentage Gainers
| Code | Name | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| SDI | SDI | 0.89 | 0.09 | 11.25% | 99249 |
| MAH | Macmahon Holdings | 0.58 | 0.04 | 6.42% | 1.77m |
| RDF | Redflex Holdings | 3.72 | 0.18 | 5.08% | 614196 |
| PSA | Petsec Energy | 1.54 | 0.07 | 4.76% | 153545 |
| RHC | Ramsay Health Care | 9.71 | 0.41 | 4.41% | 336012 |
All Ords Percentage Decliners
| Code | Name | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| IAS | International All Sports | 0.36 | -0.03 | -7.69% | 294200 |
| MUL | Multiemedia | 0.013 | -0.001 | -7.14% | 54.25m |
| PBT | Prana Biotechnology | 0.27 | -0.02 | -7.02% | 256480 |
| BCL | Betcorp | 0.34 | -0.03 | -6.85% | 567767 |
| BTA | Biota Holdings | 1.82 | -0.13 | -6.43% | 26.89m |
Elsewhere in the Region...
Regional Indices
| Country | Name | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| New Zealand | NZSE50 | 3284.443 | 15 | 0.46% | 16.67m |
| Japan | Nikkei 225 | 14144.12 | -10.94 | -0.08% | 0 |
| Korea | KOSPI | 1255.51 | -0.61 | -0.05% | 416810 |
| Singapore | Straits Times | 2258.92 | -7.11 | -0.31% | 0 |
| Hong Kong | Hang Seng | 14717.27 | -23.33 | -0.16% | 103.2m |
| Malaysia | KLSE Comp | 895.36 | -2.99 | -0.33% | 0 |
