The Australian
sharemarket rose for the third consecutive session today, with the All Ordinaries
Index (XAO) gaining 0.8 pct or 35.4 pts to 4368.2. This has been the best start
to a new week since early January 2012. All sectors recorded healthy gains by
market close with energy, mining and industrial stocks the standouts.
The gains are partly thanks to the Europeans finally deciding to give Greece its much
anticipated €130 billion bailout package today. Greece must now attempt to trim its
debt to no more than 120 pct of its GDP by 2020. The bailout funds were
essential because Greece
owes lenders (bond holders) €14.5 billion by March 20 this year.
A number of big names issued their profit results today, with Australia's
largest travel agent, Flight Centre (FLT) one of the largest. FLT recorded an
$81.6 million net profit for the six months to December 2011, which was largely
in-line with market consensus. A strong Australian Dollar helped entice
consumers to head overseas on holidays and take advantage of the favourable
currency conversions. FLT shares rose 3.71 pct or 77 cents to $21.50.
OneSteel (OST) recorded a 41.4% drop in net profit to $78 million in 1H12 (July
to December 2011). OST is a miner, manufacturer, distributor and recycler of
metals and steel related products. A one-off $130 million write-down on one of
its business segments, in addition to restructuring costs impacted the
company´s bottom line. The result was towards the upper end of the company´s
profit guidance; however it appears set to cut another 430 jobs before the end
of this financial year in order to cut costs. OST did not give guidance on
potential future earnings partly due to the volatility of the Australian dollar and steel prices. A 3
cent per share interim dividend is scheduled to be paid to eligible
shareholders on March 5. OST shares have underperformed the broader market
slightly this calendar year, however are still up by 4.2% (not including
today´s move). OST shares rose by 12.33 pct or 9 cents to 82 cents today.
Diversified property company, Mirvac Group (MGR) delivered a 1H12 Jul to Dec
2011) profit of $176.6 million. This was slightly higher than most market
expectations. MGR has two main divisions within its business: One is dedicated
to investments and the other on developments. The group´s development division
is focused on both residential and commercial construction across Australia and
recorded a lacklustre profit result. MGR has said that the outlook for the
retail sector is subdued. Vacancy rates are expected to remain stable however
rental growth is likely to be weak.
Its investment division posted a $242 million profit (before tax) over the
period. MGR paid a $0.02 a share dividend to shareholders on January 27, taking
the payout for the half to $0.04. MGR tends to pay dividends on a quarterly basis rather than semi-annually. MGR´s share price has remained
largely unchanged this calendar year and has underperformed the broader market.
MGR shares ended flat today.
Commodity prices have firmed and our largest miners headed higher this
afternoon. BHP Billiton (BHP) rose 1.17 pct or 42 cents to $36.44 while Rio
Tinto (RIO) gained by 1.65 pct or $1.12 to $69.16.
The big four banks all improved, with National Australia Bank (NAB) the best,
up 0.95 pct or 22 cents to $23.40. Commonwealth Bank of Australia (CBA) rose
0.75 pct or 37 cents to $49.47, ANZ Banking Group (ANZ) gained 0.23 pct or 5
cents to $22.00 and Westpac (WBC) ended largely flat.
On the economic front, the latest Reserve Bank (RBA) board minutes from its
latest meeting has shown that the central bank is no rush to cut interest
rates. Commsec's Chief Economist, Craig James said that "The modest improvement
in global economic conditions gave the Reserve Bank reason to pause in its
current rate cutting cycle: Minutes of the last Reserve Bank Board meeting
confirm that policymakers were aware that "activity in the United States had
been strengthening over recent months" and "while the financial situation in
Europe remained fragile, the likelihood of an extremely bad outcome seemed to
have diminished somewhat"."
Mr James went on to say that "Overall, the Reserve Bank Board minutes describe
a more upbeat central bank compared with a couple of months ago. However the
risks are clearly weighted to the downside and while CommSec does not
anticipate interest rates to move until May at the earliest. If investment was
to weaken or the sovereign debt crisis was to escalate the risks are the
Reserve Bank would cut interest rates sooner rather than later - particularly
given that inflation looks set to remain comfortably in the mid-range of its target band."
No major economic data was released in the region today.
In Europe tonight, the latest consumer
sentiment reading for January will be released. The market is expected
Europeans to remain quite pessimistic, with the consensus pointing to a reading
of -20. Any number below 0 indicates consumer pessimism.
The U.S markets were closed last night due to the President's Day public
holiday.
Tonight, Barnes & Noble, Home Depot and Wal-Mart are all scheduled to
deliver their latest quarterly profit results.
Tomorrow in Australia,
the latest Wage Price Index will be released. This will show us to what extent
wages have increased between October and December last year.
The volume of shares traded came in at 2.04 billion today, worth $4.7 billion.
577 shares were up, 444 finished weaker and 391 ended unchanged.
At 4.30pm AEDT on the Sydney Futures Exchange, the ASX24 futures contract is up
0.09 pct or 4 pts to 4277.
Due to daylight savings, most major European markets are now trading between
7pm (AEDT) and 3.30am (AEDT). Futures in Europe
are pointing to a stronger start to trade tonight.
Dow Futures are currently higher; indicating that U.S stocks could open in the
black tonight. American markets open at 1.30am (AEDT). Due to the Americans
going back an hour on November 5 last year, U.S markets will be trading between
1.30am (AEDT) and 8am (AEDT).
Turning to currencies, the Australian dollar (AUD) buys US107.4 cents and rose
initially following the Greek bailout announcement. The AUD is currently
trading at £67.7 pence and €80.8 cents.
Have a great evening.
Juliette Saly, CommSec Market Analyst
Source: www.thebull.com.au
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20th-February-2012 | 
