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Back near the dawn on of time - I think it was 2002 - I declared QAN a SELL, just before an attempt to launch a competitor (on domestic routes) failed to secure funding. Short term, QAN's price spiked - that was always gonna happen if Ansett II failed to take off - and I got stirred about it for a couple of weeks. As I said atthe time, though: the 'ratio decidendi' for the SELL was not the emergence of a competitor: no... although oil was under $35 a barrel at the time, your Beloved GT indicated that QAN's big problem over the longer terms was going to be a massive increase in the price of jet fuel (I even put in a chart).
Anyway - that was an interesting time. How I wish that the InvestorWeb Archive was still available so that I could compile a massive set of excerpts of my pre-2004 wisdom. I could bore you to death with that, Dear Reader.
The attempt to revive Ansett was stymied by someone who happened to be on the board of a big bank (who the consortium hoped would be the financier) and who also happened to be on the board of QAN.
This is how finance works, dear Reader. There are a few (surprisingly few) people who become professional Board members, and they exploit stuff they discover on one Board, and use it to the benefit of whoever pays them the most.
I only point this out because my fair value for QAN was - and still is - under $2, but with the caveat that it can be bought for a trade if it's around the $2 level, so long as it is highly oversold and the rest of the market is technically 'primed'. It's just a 'beta due to insto popularity' play.
A couple of people have wondered aloud if there was going to be a QAN option play, given the bad news. A 60-odd percent fall in profits, even given QAN's - shall we say 'innovative'? - method of accounting for option premiums on their fuel hedging. So the actual damage must be pretty significant - let's see if they come back to the market yet again in search of capital.
Let's just say that I think that QAN's accounts can be relied on to exactly the same extent as US economic statistics.
Anyhow. NO. (to the QAN option play). The market is not in a technically constructive phase. It is having a bear bounce, which may appear impressive, but which could fall apart in the time it takes me to write three paragraphs.
I heard something about Babcock & Brown today - that receivers might be appointed. At this stage I have not even bothered to check, so it's a bit irresponsible to raise it. Still, it seems pretty clear that they will not be able to roll over debt at any sort of decent terms, and there is no way in creation they could get subscription to a capital raising... the end seems obvious, no?
Major Market Indices
The broad market - the All Ordinaries (XAO) - surged a whopping 186.6 points (5.51%), finishing at 3575.4 points. The index hit an intraday high of 3575.4 at 4:15 pm, while the low for the day was 3500.3 - set at 2:28 pm Sydney time.
I guess it has to happen once in a blue moon - the NuffNuff Orgasm (where the nuffies dive in 'at market' at the open) didn't result in the stench of burning nuffie-fur. That said, the closing high (generated solely by the closing match-out process, which is notoriously corrupt in Australia) was still only about 10 points above the 11 a.m. level. At about 2:30 p.m., the index had fallen back to touch 3500.3 (let's call that 3500), and from there it rallied about 40 real points and another 20-odd fake 'closing matchout' points.
Hope... you can smell it. There has not been the slightest whiff of genuine fear during this whole decline. Everybody has been looking for the turnaround catalyst, the magic trick that gets everyone out of the shit.
Sooner or later, folks will wake up and it will dawn on them that there is no magic trick.
Jeeez, who would have though? It turns out that if you borrow six or eight times your income and spend it on an asset that is trading at a massive overvaluation, it stings a bit when the market reverts towards fair value. (Note: property prices in Straya have not even started their correction yet - the balance sheet sickness currently afflicting domestic banks is largely externally sourced. There is the domestic stuff to come next).
Total volume traded on the ASX was 1.45bn units, 13.9% above its 10-day average of 1.27bn shares.
The ASX's daily listing of all stocks included 1117 different 3-letter FPO's which traded (i.e., had non-zero trade volume). Of these, 614 issues rose, with volume in rising issues totalling 1.08bn units; there were 277 declining stocks, which traded aggregate declining volume of 293.2m shares.
Of the 489 All Ordinaries components, 303 rose while 113 fell. Volume was tilted in favour of the gainers by a margin of 4.1:1, with 958.76m shares traded in gainers while 232.91m shares traded in the day's losers.
The Index that forms the cash basis for the SPI Futures - the S&P/ASX 200 (XJO) - hurtled skyward to the tune of 198.3 points (5.79%), closing out the session at 3623.4 points.
| Name | Close | +/-(%) |
|---|---|---|
| All Ordinaries | 3575.40 | 186.60 (5.5%) |
| ASX 20 | 2190.10 | 137.60 (6.7%) |
| ASX 50 | 3668.00 | 215.90 (6.3%) |
| ASX 100 | 2988.50 | 168.70 (6.0%) |
| ASX 200 | 3623.40 | 198.30 (5.8%) |
| ASX 300 | 3601.50 | 195.00 (5.7%) |
| ASX Mid-Cap 50 | 3261.90 | 121.30 (3.9%) |
| ASX Small Ordinaries | 1640.70 | 44.70 (2.8%) |
The "heavy hitters" of the Australian market - the ASX 20 Leaders (XTL) - had a bit of a moonshot, stacking on 137.6 points (6.70%), closing out the session at 2190.1 points.
Among the 20 big guns, 18 index components finished to the upside, and of the rest, 2 closed lower for the session. The 21 stocks which make up the index traded a total of 216.41m units; 18 index components rose, with rising volume amounting to 190.34m shares, while the 2 decliners had volume traded totalling 22.03m units. The major percentage gainers within the index were
- ANZ Banking Group (ANZ), +$1.65 (12.79%) to $14.55 on volume of 17.6 million shares;
- Commonwealth Bank Of Australia (CBA), +$3.78 (12.51%) to $34.00 on volume of 8.4 million shares;
- BHP Billiton (BHP), +$2.84 (12.15%) to $26.22 on volume of 29.9 million shares;
- Woodside Petroleum (WPL), +$3.43 (11.41%) to $33.50 on volume of 3.8 million shares; and
- Westfield Group (WDC), +$1.09 (8.35%) to $14.15 on volume of 6.5 million shares.
On the less salubrious side of the big-cap fence, the following stocks were the worst-performed within the index:
- Brambles (BXB), -$0.56 (7.77%) to $6.65 on volume of 12 million shares; and
- AMP (AMP), -$0.06 (1.13%) to $5.24 on volume of 10 million shares.
At the other end of the market-cap spectrum, the ASX Small Ordinaries (XSO) added 44.7 points (2.80%), closing out the session at 1640.7 points.
Among the stocks that make up the Small Caps index, 138 index components finished to the upside, and of the rest, 51 closed lower for the session.
The 209 stocks which make up the index traded a total of 308.33m units: volume in the 138 gainers totalling 217.46m shares, with trade totalling 81.22m units in the index's 51 declining components. The major percentage gainers within the index were- Aquarius Platinum (AQP), +$0.75 (29.64%) to $3.28 on volume of 1.7 million shares;
- Lynas Corporation (LYC), +$0.07 (28%) to $0.32 on volume of 4.5 million shares;
- Becton Property Group (BEC), +$0.02 (27.54%) to $0.09 on volume of 2.6 million shares;
- Independence Group NL (IGO), +$0.33 (26%) to $1.58 on volume of 1.2 million shares; and
- Coeur D'Alene Mines Corporation (CXC), +$0.17 (22.97%) to $0.91 on volume of 180.2 thousand shares.
In the red-zone of the little-stock index, the following list represents the biggest downers (in terms of percentage decline):
- Australian Pharmaceutical Industries (API), -$0.1 (21.35%) to $0.35 on volume of 947.2 thousand shares;
- Babcock & Brown Power (BBP), -$0.01 (17.14%) to $0.03 on volume of 7.4 million shares;
- Wattyl (WYL), -$0.08 (13.11%) to $0.53 on volume of 989.5 thousand shares;
- Mirvac Industrial Trust (MIX), -$0.02 (10%) to $0.14 on volume of 109.5 thousand shares; and
- Australian Agricultural Company. (AAC), -$0.15 (9.87%) to $1.37 on volume of 771.3 thousand shares.
Index Changes
| Code | Name | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| XAO | All Ordinaries | 3575.4 | 186.6 | 5.51 | 1221.5m |
| XFL | ASX 50 | 3668 | 215.9 | 6.25 | 557.7m |
| XJO | ASX 200 | 3623.4 | 198.3 | 5.79 | 1074.3m |
| XKO | ASX 300 | 3601.5 | 195 | 5.72 | 1172.5m |
| XMD | ASX Mid-Cap 50 | 3261.9 | 121.3 | 3.86 | 320.3m |
| XSO | ASX Small Ordinaries | 1640.7 | 44.7 | 2.8 | 294.5m |
| XTL | ASX 20 | 2190.1 | 137.6 | 6.7 | 209.9m |
| XTO | ASX 100 | 2988.5 | 168.7 | 5.98 | 878m |
Market Breadth
| ASX20 | XTO | XJO | XAO | XSO | Market | |
|---|---|---|---|---|---|---|
| Advances | 18 | 79 | 152 | 303 | 138 | 614 |
| Declines | 2 | 18 | 45 | 113 | 51 | 277 |
| Advancing Volume | 190.3m | 727.3m | 866.1m | 958.8m | 217.5m | 1.08bn |
| Declining Volume | 22m | 151.9m | 201.8m | 232.9m | 81.2m | 293.2m |
GICS Industry Indices
Among the 11 industry indices, things were relatively upbeat: every sector bar one managed to keep its head above water.
The best performing index was Materials (XMJ), which added 680.6 points (9.27%) to 8021.1 points. The 45 stocks which make up the index traded a total of 359.05m units; 39 index components rose, with rising volume amounting to 345.06m shares, while the 5 decliners had volume traded totalling 10.12m units. The major percentage gainers within the index were
- Aquarius Platinum (AQP), +$0.75 (29.64%) to $3.28 on volume of 1.7 million shares;
- Lynas Corporation (LYC), +$0.07 (28%) to $0.32 on volume of 4.5 million shares;
- Independence Group NL (IGO), +$0.33 (26%) to $1.58 on volume of 1.2 million shares;
- Coeur d'Alene Mines Corporation (CXC), +$0.17 (22.97%) to $0.91 on volume of 180.2 thousand shares; and
- OM Holdings (OMH), +$0.19 (22.62%) to $1.03 on volume of 4.6 million shares.
Second in the index leadership stakes was Property Trusts (XPJ), which gained 75.1 points (8.38%) to 970.9 points. The 21 stocks which make up the index traded a total of 155.12m units; 15 index components rose, with rising volume amounting to 125.22m shares, while the 5 decliners had volume traded totalling 22.67m units. The major percentage gainers within the index were
- Mirvac Group (MGR), +$0.19 (17.12%) to $1.30 on volume of 9.7 million shares;
- Commonwealth Property Office Fund (CPA), +$0.17 (15.04%) to $1.30 on volume of 4.8 million shares;
- ING Office Fund (IOF), +$0.13 (13.74%) to $1.04 on volume of 4.7 million shares;
- GPT Group (GPT), +$0.12 (13.22%) to $0.99 on volume of 31.2 million shares; and
- Apn/Uka European Retail Property Group (AEZ), +$0.01 (12.33%) to $0.08 on volume of 1.3 million shares.
The bronze medal for today goes to Financials ex Property Trusts (XXJ), which climbed 269.9 points (7.36%) to 3937.9 points. The 27 stocks which make up the index traded a total of 114.1m units; 17 index components rose, with rising volume amounting to 84.95m shares, while the 9 decliners had volume traded totalling 29.1m units. The major percentage gainers within the index were
- Perpetual (PPT), +$4.82 (19.37%) to $29.70 on volume of 114.8 thousand shares;
- ANZ Banking Group (ANZ), +$1.65 (12.79%) to $14.55 on volume of 17.6 million shares;
- Commonwealth Bank Of Australia (CBA), +$3.78 (12.51%) to $34.00 on volume of 8.4 million shares;
- AXA Asia Pacific Holdings (AXA), +$0.44 (10.97%) to $4.45 on volume of 9.7 million shares; and
- Westpac Banking Corporation (WBC), +$1.33 (8.06%) to $17.83 on volume of 16.6 million shares.
The only declining index for the session was Industrials (XNJ), which dipped 23.3 points (0.75%) to 3081.5 points. The 32 stocks which make up the index traded a total of 155.25m units; The 8 decliners had volume traded totalling 55.84m units, and 21 index components rose, with rising volume amounting to 98.95m shares, The major percentage decliners within the index were
- Brambles (BXB), -$0.56 (7.77%) to $6.65 on volume of 12 million shares;
- Asciano Group (AIO), -$0.07 (5.73%) to $1.07 on volume of 10.5 million shares;
- Virgin Blue Holdings (VBA), -$0.02 (5.56%) to $0.34 on volume of 11.3 million shares;
- Transpacific Industries (TPI), -$0.1 (3.33%) to $2.90 on volume of 790.7 thousand shares; and
- Qantas Airways (QAN), -$0.07 (3.03%) to $2.24 on volume of 10.4 million shares.
Sector Indices
| Code | GICS Sector | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| XMJ | Materials | 8021.1 | 680.6 | 9.27 | 359m |
| XPJ | Property Trusts | 970.9 | 75.1 | 8.38 | 155m |
| XXJ | Financials ex Property Trusts | 3937.9 | 269.9 | 7.36 | 114m |
| XEJ | Energy | 11898 | 765 | 6.87 | 76m |
| XHJ | Healthcare | 8255.5 | 270.1 | 3.38 | 14m |
| XDJ | Consumer Discretionary | 1099.6 | 30.8 | 2.88 | 44m |
| XTJ | Telecommunications | 1378.1 | 30.2 | 2.24 | 58m |
| XIJ | Information Technology | 383.6 | 7.3 | 1.94 | 3m |
| XSJ | Consumer Staples | 6146.7 | 67.7 | 1.11 | 35m |
| XUJ | Utilities | 4178.6 | 15.7 | 0.38 | 72m |
| XNJ | Industrials | 3081.5 | -23.3 | -0.75 | 155m |
All Ordinaries Major Movers
All Ords Volume Leaders
| Code | Name | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| OZL | OZ Minerals | 0.55 | 0.03 | 5.77 | 120.2m |
| BLY | Boart Longyear | 0.25 | 0.01 | 2.04 | 59.4m |
| TLS | Telstra Corporation. | 4.12 | 0.09 | 2.23 | 50.6m |
| BBI | Babcock & Brown Infrastructure Group | 0.03 | 0.00 | -11.76 | 42.3m |
| GPT | GPT Group | 0.99 | 0.12 | 13.22 | 31.2m |
All Ords Percentage Gainers
| Code | Name | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| PRU | Perseus Mining | 0.37 | 0.12 | 48 | 4.7m |
| APD | APN Property Group | 0.27 | 0.08 | 38.46 | 192k |
| TBG | Tutt Bryant Group | 0.80 | 0.22 | 36.75 | 15k |
| CXG | Coote Industrial Ltd | 0.38 | 0.10 | 35.71 | 465.1k |
| MPF | Multiplex Acumen Property Fund | 0.26 | 0.06 | 30 | 779.7k |
All Ords Percentage Losers
| Code | Name | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| MAFCA | Multiplex Prime Property Fund | 0.05 | -0.02 | -28.57 | 120k |
| API | Australian Pharmaceutical Industries | 0.35 | -0.10 | -21.35 | 947.2k |
| ARR | Arasor International | 0.02 | 0.00 | -19.05 | 431.6k |
| OIF | Orchard Industrial Property Fund | 0.13 | -0.03 | -18.75 | 3m |
| KMN | Kings Minerals NL | 0.07 | -0.02 | -17.44 | 333.1k |
