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Another day, another indication that there is still too much Hope - today it took the form of a 200-point bounce in the last 3 hours (and 220 from intraday low to intraday high) in the SPI, which translated to a 180-odd point buyers panic in the All Ords (but only in the Big Caps... this was tape painting for the index). No way am I removing hedges from portfolios while da Boyz are getting so desperate that they will paint the tape so brazenly.
No news, no catalyst... except if you count the ridiculous story that a Chinese 'Sovereign Wealth Fund' is prepared to waste vast amounts buying a stake in one of AIG's units based in Japan. 'Sovereign Wealth Funds' have been absolutely hosed in the last year - they have been taking stakes in every losing prospect on the face of the planet. So there's a fund of this type that is prepared to try and overpay for an AIG subsidiary ... so what?
Bloomberg and Reuters were left to pull out that most hackneyed of phrases: "On Bargain Hunting", as in "Markets Rebound On Bargain Hunting". If you ever read anything written by a 'finance correspondent' and they use that term, make a note of their name, and never again read anything written by them. I don't care if they are new to the game - it's no excuse.
A meltup like this afternoon - on a Friday, when trade is super-thin and half the financial market activity is being done by half-pissed 22-year olds - is not an indication that stocks have found a bottom. They are not an indication of 'bargain hunting'. People don't 'bargain hunt' by throwing themselves at sellers; it's like referring to the waves of Orcs in the battle of Osgiliath as 'stealth troops'. (I just thought I would chuck in something for Tolkien geeks)
"Bargain hunters" wait for prices to come to them - they don't behave like a bunch of teenage females lining up to buy Kylie Minogue underwear. By the time the dust has settled, and the Dow is in the mid-to-low 6000s, those who bought today will have the same buyer's remorse as people who paid $100 for a pair of knickers that are uncomfortable to wear and didn't stop their arse from looking like giant ball of half-risen bread dough.
Yes, that's right, dearest Reader; enough technical damage has been done to give impetus to a Dow decline to the low 6000s. Citigroup is - in all likelihood - headed for the Corporate Morgue, and Ford, GM and Chrysler will probably all wind up kaput with or without another huge slab of taxpayer's money. The folks at Dow Jones might pull one of their usual swifties and change the index, but it won't do any good.
So do not fret about having missed the (or a) boat. Let the chuckleheads who think they can fool most of the investing public most of the time, play their silly games while the market is thin... it gives them the sense of being latter-day Gordon Geckos.
Sure, the market was already oversold, but the market has not given us a CCI divergence on any timeframe from daily right down to 5 minute... we are headed lower. Maybe some index shorts were spooked about holding over the weekend, and got worried that the Yanks will do everything possible to jawbone the market up - including weekend surprise announcements about how politicians once again have a Plan To Save Us All. Don't buy it.
Speaking of people who invest without much of a clue... have you ever bought something without reading what's on the tin, and then later discovered you really shouldn't have?
You've got to read the label. Otherwise anything can go wrong: you know how it goes... you're three sheets to the wind, it's 3 a.m. and you want a sandwich. You grab some tinned mackerel, some lettuce, onion, tomato and maybe a bit of mayo. You cuss because there's no white bread... you'll have to put up with that Soy & Linseed crap that The Lovely buys. But after some bachelor-wizardry, you got yerself a sandwich, buddy. Well done!
Three bites in, you notice there's a picture of a cat on the label of the tin.
I'm thinking here of the folks who bought tens of millions of 'shares' in Brisconnect. I have put 'shares' in quotes because an Instalment Trust Units is not a share - it is like an Instalment Receipt (think Telstra1), where ownership confers an obligation to pony up another wodge of cash in the future (or sell the stock).
It should have been obvious from the stock code - BCSCA. The fact that it's not a 3-letter code means it's a hybrid security of some sort... the 'CA' terminal pair is reminiscent of TLSCA (Telstra 1's stock code back in the dim pages of history). That - at the very least - should have been a hint that it would pay to bone up. to do a bit of due diligence. Or just look on the ASX site. Ask someone (preferably someone who is not an anonymous 'username' on an internet forum).
From what I can garner, the buyers were chasing yield - a promised 5.95c distribution that was later decided against (let's not say 'reneged', because the management only indicated that they 'had an intention' to make a distribution... are you getting the picture?). Yield-chasing is a sensible thing to do, frankly - but you ought to be suspicious of any firm that has management that makes announcements using language usually associated with politicians.
Major Market Indices
The broad market - the All Ordinaries (XAO) - rose strongly, registering a gain of 54.3 points (1.63%), finishing at 3386.9 points. The index hit an intraday high of 3386.9 right at the close, while the low for the day was 3201.5 - let's say "3200" - set at 12:40 pm Sydney time.
Total volume traded on the ASX was 1.62bn units, 37.6% above its 10-day average of 1.18bn shares.The ASX's daily listing of all stocks included 1211 different 3-letter FPO's which traded (i.e., had non-zero trade volume). Of these, 310 issues rose, with volume in rising issues totalling 672.3m units; there were 630 declining stocks, which traded aggregate declining volume of 719.4m shares.
Of the 489 All Ordinaries components, 155 rose while 257 fell. Volume was tilted in favour of the gainers by a margin of 1.1:1, with 610.73m shares traded in gainers while 550.99m 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) - managed a solid gain, adding 63.6 points (1.90%), closing out the session at 3416.5 points.
| Name | Close | +/-(%) |
|---|---|---|
| All Ordinaries | 3386.90 | 54.30 (1.6%) |
| ASX 20 | 2038.00 | 48.30 (2.4%) |
| ASX 50 | 3437.30 | 81.00 (2.4%) |
| ASX 100 | 2811.50 | 57.30 (2.1%) |
| ASX 200 | 3416.50 | 63.60 (1.9%) |
| ASX 300 | 3397.30 | 61.40 (1.8%) |
| ASX Mid-Cap 50 | 3163.60 | -12.30 (0.4%) |
| ASX Small Ordinaries | 1596.30 | -13.40 (0.8%) |
The "heavy hitters" of the Australian market - the ASX 20 Leaders (XTL) - had a bit of a moonshot, stacking on 48.3 points (2.43%), closing out the session at 2038 points.
The 21 stocks which make up the index traded a total of 210.52m units; 15 index components rose, with rising volume amounting to 176.05m shares, while the 6 decliners had volume traded totalling 34.47m units. The major percentage gainers within the index were
- Newcrest Mining (NCM), +$2.51 (13.25%) to $21.46 on volume of 3 million shares;
- Wesfarmers (WES), +$2.01 (11.82%) to $19.01 on volume of 4.1 million shares;
- Commonwealth Bank Of Australia (CBA), +$1.64 (5.6%) to $30.95 on volume of 7.7 million shares;
- QBE Insurance Group (QBE), +$1.11 (4.87%) to $23.91 on volume of 4 million shares; and
- Rio Tinto (RIO), +$2.76 (4.82%) to $60.01 on volume of 3.9 million shares.
On the less salubrious side of the big-cap fence, the following stocks were the worst-performed within the index:
- CSL (CSL), -$2.03 (6.17%) to $30.85 on volume of 4.2 million shares;
- Woodside Petroleum (WPL), -$1.65 (5.38%) to $29.00 on volume of 5 million shares;
- Stockland (SGP), -$0.13 (3.7%) to $3.38 on volume of 6.6 million shares;
- Suncorp-Metway. (SUN), -$0.24 (3.36%) to $6.91 on volume of 7 million shares; and
- Westfield Group (WDC), -$0.43 (3.15%) to $13.24 on volume of 7.6 million shares.
Among the stocks that make up the Small Caps index, 68 index components finished to the upside, and of the rest, 113 closed lower for the session.
The 209 stocks which make up the index traded a total of 384.86m units: volume in the 68 gainers totalling 91.26m shares, with trade totalling 256.77m units in the index's 113 declining components. The major percentage gainers within the index were- Compass Resources (CMR), +$0.07 (30.23%) to $0.28 on volume of 363.5 thousand shares;
- Marion Energy (MAE), +$0.03 (23.08%) to $0.16 on volume of 4.6 million shares;
- Becton Property Group (BEC), +$0.01 (22.41%) to $0.07 on volume of 3.5 million shares;
- Platinum Australia (PLA), +$0.09 (20.24%) to $0.51 on volume of 757.5 thousand shares; and
- ING Real Estate Community Living Group (ILF), +$0.01 (18.84%) to $0.08 on volume of 15 million shares.
In the red-zone of the little-stock index, the following list represents the biggest downers (in terms of percentage decline):
- City Pacific Limited (CIY), -$0.02 (22.22%) to $0.07 on volume of 115.2 thousand shares;
- Jabiru Metals (JML), -$0.03 (19.23%) to $0.11 on volume of 4.9 million shares;
- APN European Retail Property Group (AEZ), -$0.01 (13.58%) to $0.07 on volume of 642.3 thousand shares;
- OceanaGold Corporation (OGC), -$0.04 (13.46%) to $0.23 on volume of 42.1 thousand shares; and
- Energy World Corporation Ltd (EWC), -$0.05 (13.43%) to $0.29 on volume of 6.6 million shares.
Index Changes
| Code | Name | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| XAO | All Ordinaries | 3386.9 | 54.3 | 1.63 | 1274.1m |
| XFL | ASX 50 | 3437.3 | 81 | 2.41 | 521.1m |
| XJO | ASX 200 | 3416.5 | 63.6 | 1.9 | 1090.9m |
| XKO | ASX 300 | 3397.3 | 61.4 | 1.84 | 1201m |
| XMD | ASX Mid-Cap 50 | 3163.6 | -12.3 | -0.39 | 308.7m |
| XSO | ASX Small Ordinaries | 1596.3 | -13.4 | -0.83 | 371.2m |
| XTL | ASX 20 | 2038 | 48.3 | 2.43 | 204m |
| XTO | ASX 100 | 2811.5 | 57.3 | 2.08 | 829.8m |
Market Breadth
| ASX20 | XTO | XJO | XAO | XSO | Market | |
|---|---|---|---|---|---|---|
| Advances | 15 | 53 | 93 | 155 | 68 | 310 |
| Declines | 6 | 42 | 99 | 257 | 113 | 630 |
| Advancing Volume | 176.1m | 483.9m | 541.3m | 610.7m | 91.3m | 672.3m |
| Declining Volume | 34.5m | 291.2m | 475.3m | 551m | 256.8m | 719.4m |
GICS Industry Indices
Among the 11 industry indices, 7 registered an advance for the session, the remaining 4 lost ground.
The best performing index was Materials (XMJ), which added 307.9 points (4.59%) to 7009.8 points. The 45 stocks which make up the index traded a total of 300.16m units; 24 index components rose, with rising volume amounting to 198.95m shares, while the 18 decliners had volume traded totalling 88.87m units. The major percentage gainers within the index were
- Fortescue Metals Group Ltd (FMG), +$0.51 (39.53%) to $1.80 on volume of 20.4 million shares;
- Platinum Australia (PLA), +$0.09 (20.24%) to $0.51 on volume of 757.5 thousand shares;
- OZ Minerals (OZL), +$0.07 (13.33%) to $0.60 on volume of 78.5 million shares;
- Newcrest Mining (NCM), +$2.51 (13.25%) to $21.46 on volume of 3 million shares; and
- Avoca Resources (AVO), +$0.13 (11.02%) to $1.31 on volume of 997.8 thousand shares.
Second in the index leadership stakes was Consumer Staples (XSJ), which gained 256.7 points (4.35%) to 6152.5 points. The 13 stocks which make up the index traded a total of 46.52m units; 9 index components rose, with rising volume amounting to 30.14m shares, while the 4 decliners had volume traded totalling 16.39m units. The major percentage gainers within the index were
- Wesfarmers (WES), +$2.01 (11.82%) to $19.01 on volume of 4.1 million shares;
- Australian Agricultural Company. (AAC), +$0.12 (8.19%) to $1.52 on volume of 467.4 thousand shares;
- Lion Nathan (LNN), +$0.65 (7.83%) to $8.95 on volume of 1.7 million shares;
- Timbercorp (TIM), +$0.02 (6.52%) to $0.25 on volume of 1.2 million shares; and
- AWB (AWB), +$0.14 (5.13%) to $2.87 on volume of 1.1 million shares.
The bronze medal for today goes to Financials ex Property Trusts (XXJ), which climbed 128.5 points (3.56%) to 3736.3 points. The 27 stocks which make up the index traded a total of 107.41m units; 16 index components rose, with rising volume amounting to 82.83m shares, while the 8 decliners had volume traded totalling 13.72m units. The major percentage gainers within the index were
- AXA Asia Pacific Holdings (AXA), +$1.46 (40%) to $5.11 on volume of 7.7 million shares;
- Platinum Asset Management (PTM), +$0.28 (9.3%) to $3.29 on volume of 491.6 thousand shares;
- Australian Wealth Mgt (AUW), +$0.05 (7.04%) to $0.76 on volume of 2.2 million shares;
- IOOF Holdings (IFL), +$0.22 (6.94%) to $3.39 on volume of 106 thousand shares; and
- Commonwealth Bank Of Australia (CBA), +$1.64 (5.6%) to $30.95 on volume of 7.7 million shares.
The worst-performed index for the session was Property Trusts (XPJ), which dipped 49.9 points (5.22%) to 906.2 points. The 21 stocks which make up the index traded a total of 179.74m units; The 16 decliners had volume traded totalling 131.54m units, and 3 index components rose, with rising volume amounting to 6.18m shares, The major percentage decliners within the index were
- GPT Group (GPT), -$0.15 (14.42%) to $0.89 on volume of 22 million shares;
- Dexus Property Group (DXS), -$0.13 (14.37%) to $0.75 on volume of 11.9 million shares;
- Apn/Uka European Retail Property Group (AEZ), -$0.01 (13.58%) to $0.07 on volume of 642.3 thousand shares;
- Mirvac Group (MGR), -$0.17 (12.14%) to $1.23 on volume of 9.5 million shares; and
- Babcock&Brown Japan Property Trust (BJT), -$0.04 (9.52%) to $0.38 on volume of 7.2 million shares.
Just missing out on the wooden spoon was Healthcare (XHJ), which slid 266.1 points (3.25%) to 7916.3 points. The 9 stocks which make up the index traded a total of 17.04m units; The 6 decliners had volume traded totalling 12.62m units, and 3 index components rose, with rising volume amounting to 4.42m shares, The major percentage decliners within the index were
- CSL (CSL), -$2.03 (6.17%) to $30.85 on volume of 4.2 million shares;
- Ramsay Health Care (RHC), -$0.51 (5.07%) to $9.55 on volume of 897.6 thousand shares;
- Healthscope (HSP), -$0.2 (4.44%) to $4.30 on volume of 1.1 million shares;
- ResMed Inc. (RMD), -$0.21 (3.99%) to $5.05 on volume of 2 million shares; and
- Sigma Pharmaceuticals Ltd (SIP), -$0.03 (2.05%) to $1.20 on volume of 3.7 million shares.
Third-to-last amongst the sector indices was Energy (XEJ), which slid 317 points (2.84%) to 10863.2 points. The 19 stocks which make up the index traded a total of 64.53m units; The 15 decliners had volume traded totalling 48.37m units, and 4 index components rose, with rising volume amounting to 16.15m shares, The major percentage decliners within the index were
- Felix Resources (FLX), -$0.99 (13.22%) to $6.50 on volume of 905.6 thousand shares;
- Nexus Energy (NXS), -$0.04 (9.88%) to $0.37 on volume of 11.3 million shares;
- Linc Energy Ltd (LNC), -$0.17 (7.08%) to $2.23 on volume of 1.2 million shares;
- Australian Worldwide Exploration (AWE), -$0.15 (6.94%) to $2.01 on volume of 3 million shares; and
- OIL Search (OSH), -$0.32 (6.88%) to $4.33 on volume of 5 million shares.
Sector Indices
| Code | GICS Sector | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| XMJ | Materials | 7009.8 | 307.9 | 4.59 | 300m |
| XSJ | Consumer Staples | 6152.5 | 256.7 | 4.35 | 47m |
| XXJ | Financials ex Property Trusts | 3736.3 | 128.5 | 3.56 | 107m |
| XDJ | Consumer Discretionary | 1077.3 | 16.3 | 1.54 | 57m |
| XNJ | Industrials | 3157.6 | 44.7 | 1.44 | 162m |
| XIJ | Information Technology | 378.5 | 4.5 | 1.2 | 4m |
| XTJ | Telecommunications | 1341.4 | 8.7 | 0.65 | 57m |
| XUJ | Utilities | 4278.2 | -6.1 | -0.14 | 106m |
| XEJ | Energy | 10863.2 | -317 | -2.84 | 65m |
| XHJ | Healthcare | 7916.3 | -266.1 | -3.25 | 17m |
| XPJ | Property Trusts | 906.2 | -49.9 | -5.22 | 180m |
All Ordinaries Major Movers
All Ords Volume Leaders
| Code | Name | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| OZL | OZ Minerals | 0.60 | 0.07 | 13.33 | 78.5m |
| BBI | Babcock & Brown Infrastructure Group | 0.03 | -0.01 | -17.65 | 54.8m |
| BLY | Boart Longyear | 0.24 | 0.05 | 23.68 | 50.2m |
| TLS | Telstra Corporation. | 3.98 | 0.01 | 0.25 | 49.4m |
| GMG | Goodman Group | 0.94 | 0.00 | 0 | 39.3m |
All Ords Percentage Gainers
| Code | Name | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| AIO | Asciano Group | 1.34 | 0.41 | 44.09 | 9.4m |
| AXA | AXA Asia Pacific Holdings | 5.11 | 1.46 | 40 | 7.7m |
| FMG | Fortescue Metals Group Ltd | 1.80 | 0.51 | 39.53 | 20.4m |
| CMR | Compass Resources | 0.28 | 0.07 | 30.23 | 363.5k |
| KMN | Kings Minerals NL | 0.07 | 0.02 | 28.85 | 90.4k |
All Ords Percentage Losers
| Code | Name | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| SPH | Sphere Investments | 0.20 | -0.14 | -41.18 | 2.3m |
| CIY | City Pacific | 0.07 | -0.02 | -22.22 | 115.2k |
| TTY | Territory Resources | 0.08 | -0.02 | -20 | 2.2m |
| MAFCA | Multiplex Prime Property Fund | 0.08 | -0.02 | -20 | 60.8k |
| JML | Jabiru Metals | 0.11 | -0.03 | -19.23 | 4.9m |
