text:
What a week! Time for some R and R.
Thanks for being with us this week, we hope to see you again bright and early on Monday.
Here's what you need2know this Friday evening:
- ASX added 0.2%
- AUD rose to $US1.0427
- Nikkei down 1.7%, Hang Seng down 0.9%, Kospi up 0.1%
- Gold slips to $US1614.10, WTI oil falls to $US92.59
- Wall Street futures are flat, FTSE100 futures are down 0.2%
The tributes are expected to flow in for Martin Ferguson this afternoon, following his resignation from the position of Resources Minister.
Ferguson was very popular across the resources industry, and Rio Tinto's top man in Australia, David Peever, was first off the mark with this tribute;
''Rio Tinto notes with regret the resignation of Martin Ferguson as Federal Minister for Resources, Energy and Tourism.
It is appropriate to acknowledge the outstanding contribution Martin Ferguson had made during his time as Minister.
Martin has held the resources portfolio through a sustained period of global economic uncertainty, which has also been very challenging for the Australian resources industry. That the sector has continued to underpin Australia's economic growth and export performance in the face of such headwinds is in no small part due to the Minister's efforts during his stewardship of such a vital area of the economy.
I would like to thank him for his contribution and to wish him well for the future.''
And here are the best and worst performers from the ASX200 this week:
Here's how the blue chips finished:
- Rio: -0.7%
- CBA: flat
- Westpac: +1.4%
- Fortescue: -2.6%
- Woolworths: +0.9%
- Wesfarmers: +0.8%
- Telstra: -0.2%
Among the sectors, financials jumped 0.5 per cent, consumer staples gained 0.7 per cent and gold miners added 10.8 per cent.
Consumer discretionary lost 0.7 per cent and materials slipped 0.1 per cent.
The market has finished marginally higher, the benchmark S&P/ASX200 rose 7.9 points, or 0.2 per cent, to 4967.3, while the broader All Ords added 4 points, or 0.1 per cent, to 4980.8.
Spot iron ore prices steadied after falling last week to three-month lows, amid signals that buyers from top importer China are keen on rebuilding stockpiles.
A modest bounce in Chinese steel prices this week helped iron ore regain some footing, and traders say prices of the raw material could stretch gains in the days ahead.
"Iron ore looks to have stabilised. We believe mills are looking to replenish their iron ore inventory as the price looks healthy for them," said an iron ore trader in Hong Kong.
"We are getting enquiries for cargo, and they are willing to pay the market price."
Benchmark 62-per cent grade iron ore rose 10 cents to $US134.20 a tonne, according to data provider Steel Index.
Fund managers are facing a push by European Parliament to limit their bonuses, hours after Britain failed to water down planned EU banker-pay rules that are set to take effect from 2015.
The assembly's economic and monetary affairs committee voted in favor of a ban on managers of EU-regulated mutual funds, known as UCITS, from receiving bonuses larger than their fixed pay.
The move comes as European Parliament lawmakers and Ireland, which holds the rotating presidency of the EU, confirmed a compromise deal overhauling bank capital and liquidity rules for the 27-nation EU. That law will ban banker bonuses that are more than twice fixed pay, with scope for as much as a quarter of the bonus to be valued at a discount if payment is deferred for at least five years.
Here's the story of the week for the ASX200 - no words necessary really.
Inside the final hour of trade, here's how the blue chips are looking:
- Rio: +0.8%
- Westpac: +1.6%
- Fortescue: -2.3%
- Woolworths: +0.4%
- Wesfarmers: +1%
- Telstra: -0.2%
Some day in the next few weeks, the one-millionth home in Australia will have solar panels installed on their roof.
The renewable energy industry got a fillip on Thursday from the federal government's decision to leave its main 2020 target settings unchanged.
The annual Earth Hour, to be marked at 8.30 pm (in each city) may also give modest moment to the clean energy industry. This year it's not just a matter of turning off the lights for 60 minutes.
A remote mine in northern Brazil is set to produce gold so cheaply that its Australian owner Beadell Resources (BDR) could prove irresistible to a buyer.
Three months after pouring its first gold bar at the Tucano mine in Amapa, Beadell predicts the mine this year will become Brazil's third-largest producer of the metal. With the benefits of low taxes and labor expenses, the Perth-based company plans to churn out bullion for 32 per cent less than the average cost among peers worldwide, according to data compiled by Bloomberg.
The low costs are so appealing that Beadell could fetch 20 per cent more than its $623 million market value in a sale, said Hartleys. The mine, expected to yield about 200,000 ounces of gold in 2013, may attract bids for Beadell from AngloGold Ashanti (ANG) and Kinross Gold (K), which both have operations in Brazil, according to Ord Minnett.
China has agreed to allow Australian canola to be imported under specific conditions, an Australian industry group said on Friday, overturning a three-year ban.
Insurers may be watching their weather radars closely this afternoon as thunderstorms approach Sydney.
In normalised terms, the Sydney hailstorm on 14 April 1999 remains the industry's biggest single loss event. That storm cost almost $4.3 billion in 2011 dollars, edging out tropical cyclone Tracy's $4.1 billion hit on Darwin over Christmas in 1974.
A legal battle between health insurance giant Bupa Australia and health insurance comparison site iSelect has ended with iSelect agreeing to temper its advertising claims and make a donation to Bupa's medical research fund, writes BusinessDay's Madeleine Heffernan.
Both companies say they are pleased with the agreement, which comes before an expected sharemarket listing by iSelect this year.
The case was ignited by a letter from iSelect to Bupa's customers at the end of 2011. Bupa then sought a Federal Court order stopping iSelect making certain claims about a no-waiting period for people who switched their health insurance.
Bupa raised concerns about iSelect's claims that on average consumers could save about $600 a year by switching their policy and sought compensation for commercial damage.
Macquarie has bolstered its presence in China by appointing former Australian ambassador Dr Geoff Raby as vice-Chairman at Macquarie Group China.
Dr Raby already serves on the boards of Fortescue Metals Group, Yancoal Australia and OceanaGold. He is also chairman and chief executive of his own Beijing-based advisory firm, Geoff Raby & Associates.
"As a former Australian Ambassador to China, Dr Raby has strong relationships with senior leaders of major corporations and government-linked companies in China and Australia," said Alex Harvey, chief executive at Macquarie Group in Asia.
US officials rebuked Boeing for comments its executives made at a media briefing on plans to get the grounded 787 Dreamliner flying again.
The National Transportation Safety Board said Boeing didn't inform investigators about what it planned to say in the March 15 briefing in Tokyo, which is "inconsistent with our expectations" from a company involved in an accident probe, agency General Counsel David Tochen wrote in a letter yesterday.
The letter signals tension in an investigation with high stakes for Boeing, which is trying to limit damage to the image of its high-efficiency plane once it's cleared to fly.
"The NTSB's primary concern is that during their March 15 briefing in Tokyo on the modifications to the 787 battery system, Boeing representatives provided their own analysis and conclusions regarding an ongoing NTSB investigation," Kelly Nantel, an safety board spokeswoman, said in a statement.
Economic rationalists would argue privatising the electricity industry is a slam dunk
Just look at Victoria, which hasn't gold plated its electricity networks, unlike other states like NSW where the government is spending more than the NBN roll-out to upgrade the polls and wires. So this should mean power prices are cheaper in Victoria, right
Well, the latest data from the Australian Energy Markets Commission tells a slightly different story
In 2011-12, NSW households paid less for the power than Victoria's at 25.4 cents a kilowatt hour compared with 28.8 cents, even though Victoria privatised its power industry years ago, supposedly leading to greater efficiencies.
Yet, despite the big spend underway in NSW, by 2014-15, the AEMC reckons prices in Victoria will be significantly higher than in NSW - 35.2 cents a kilowatt hour compared with 31 cents.
Here's how the rest of the region is doing:
- Nikkei(Japan): -1.5%
- Shanghai: -0.1%
- Taiwan: flat
- South Korea: -0.1%
- Singapore: -0.3%
- New Zealand: +0.1%
The Australian dollar is higher after the release of good Chinese economic data, but has traded in a tight range in the morning session.
The local unit was trading at US$1.0430, up from $US1.0373 yesterday.
Early this morning, the currency peaked at $US1.0459, its highest level since February 5.
The ASX200 is now slipping of its intraday high. The benchmark index touched a gain of 0.48 per cent but has slipped back to 0.28 per cent higher. It fell as much 0.64 per cent in opening trade.
IG markets analyst Evan Lucas said factors involving the big banks were driving the local bourse slightly higher.
''If your big four banks are up by one per cent, it's going to drive us higher,'' Mr Lucas said. He said the banks were looking relatively cheap to buy at the moment, and over the next six weeks Westpac, ANZ and National Australia Bank would go ex-dividend.
Mr Lucas said there were rumours that Westpac may be sitting on about $1 billion of franking credits, which may come out in a special dividend.
Also, ANZ probably had the biggest scope to move in regard to dividend growth given the amount of cash on its balance sheet.
''That's probably why you're starting to see the banks hold up even in the face of the fact that Cyprus is looking quite concerning,'' Mr Lucas said.
It seems that the non-mining sector is slower strengthening ahead of an expected peak in mining investment this year, according to a CommSec analysis of new detailed labour force data released yesterday.
CommSec economists Diana Mousina and Gareth Aird have delved into the numbers for the past 12 months and they make for some interesting reading.
- The wholesale trade sector accounted for more than ⅓ of the total increase in employment in the past year. Why? Perhaps it's due to the the demand for motor vehicles, where sales are at record highs.
- Employment in accommodation (staffed by overseas arrivals) and food services lifted by 58,700
- About 58,000 jobs were added in the education sector, possibly due to the 2009 baby boom
- The health sector has been beefed up with 46,100 new jobs
- Around 226,200 people gained employment in the non-tradable industries such as wholesale, accommodation, cafes and restaurants
- Employment in cyclical sectors, which depend on the ebbs and flows of an economy, has risen by 2.8 per cent
- Jobs growth was greatest in the non-mining states of NSW and Victoria, and made up 70 per cent of the growth in the past 12 months to February
- The manufacturing sector shedded 28,900 jobs
- The tradables sector (agriculture, mining and manufacturing) lost 29,300 positions
- A slowdown in new jobs added to non-cyclical sectors (such as healthcare and manufacturing), with growth of only 1.4 per cent
The Australian government has sold $600 million of July 21 2017 Treasury bonds.
The Australian Office of Financial Management (AOFM), which conducts bond auctions on the behalf of the government, said the bonds were sold for a weighted average yield of 3.0888 per cent.
The sale attracted bids totalling $1.965 billion, giving a coverage ratio of 3.28.
It's not just the Labor Party capable of strange days indeed, writes BusinessDay's Michael Pascoe.
US department store Neiman Marcus has been done over by the Federal Trade Commission for selling real fur as faux.
There might be something profound about the way the world has turned when a top flight retailer is passing off the real thing as fake. Next authorities will raid Hong Kong's Ladies' Market to drag away a stall holder guilty of stocking genuine Louis Vuitton handbags.
And it's not just Neiman Marcus being a little strange. The Herald Tribune reported two other retailers were selling genuine fakes, so to speak. Perhaps the most pleasing sentence in the story is: "The FTC also charged that The Neiman Marcus Group Inc. claimed that a rabbit fur product had mink fur, and failed to disclose where the fur came from for three fur products."
I'm no furrier, but I'd guess the fur came from rabbits.
However, the world turning upside down is not confined to rabbits dressed as mink and non-faux faux fur. Earlier this month, The Sydney Morning Herald reported university deans more or less claiming they don't run dud faculties with low standards. As Mandy Rice Davies might suggest, they would say that, wouldn't they?
A 24-hour shutdown of Loy Yang B power station has been averted after the union and the station's owners resolved a pay dispute just hours before the shutdown was due to start, writes BusinessDay's Lucy Battersby.
The resolution ends months of industrial action at two Victorian power stations.
The Construction, Forestry, Mining and Energy Union had planned to shutdown Loy Yang B from midnight on Thursday until midnight Friday to put pressure on the station's owners, GDF Suez. The union has been negotiating a new pay deal.
Leighton Holdings shares are down 7% to $20.195 after Chairman Stephen Johns and two other directors resigned #ausbiz #markets ^JS — CommSec (@CommSec) March 22, 2013
Quick health check on Billabong shares. Now trading at 75.5 cents, still short of Wednesday's 81c close before the big slump yesterday.
Niall King from CMC Markets says with RBA Governor Stevens not due to speak until next week, ''the next major economic announcement likely to give direction to the markets will again come from overseas in the form of the German Ifo Business Climate data later this evening".
''A strong read, above the forecast 107.8 level, may be enough to temper nerves over the Eurozone going into the weekend as the market awaits a resolution to Cyprus.''
The big miners are down, but have moderated early losses with the market, while the banks are forging ahead:
- CBA is 0.16% higher to $68.79
- ANZ is 0.85% higher to $28.38
- NAB is 1.09% higher to $30.68
- Westpac is 1.15% higher to $30.42
Whitehaven Coal is laying off 40 workers as it cuts costs to deal with lower coal prices and the high Australian dollar.
Whitehaven said 30 permanent mine and maintenance staff and 10 contractors who work at its Rocglen and Tarrawonga mines in north-west NSW will be made redundant.
Managing director Tony Haggarty said cutting staff was a difficult decision to make.
''However as part of the review process it became clear that decisive action needed to be taken in order to ensure our open cut business remained viable in the current low coal price environment,'' he said in a statement.
CMC Markets strategist Ric Spooner said the local market had opened in negative territory after the ECB warned Cyprus that it has until Monday to agree to its conditions for a bailout.
''The market's been driven by the situation in Cyprus today and the announcement by the ECB that it may withdraw stimulus to Cyprus banks by Monday,'' he said.
Mr Spooner said locally the market also reassessed the outlook for interest rates last week after economic data showed the economy was growing.
Interesting debate going on in the comments section. 'Hid it all under the bed' asked:
- What are your basketcase companies, not the 20 cent companies that dissapear in a brief flurry of over-exhuberance followed by a period wallowing about at 2 or 3 cents ... I will get the ball rolling with Billabong and Bluescope Steel. I would also add Timbercorp but they are sadly (?) no longer with us.
'Long & Strong' replied:
- Qantas. Just survives as a business. May not ever fold, but won't really offer great growth either. Return on shareholders equity hasn't been above 4.5% in the last 4 years. Not a good investment choice.
And 'kingly, BrisVegas' added to the list:
- You can add Iluka, Boral, Paladin, Transfield Services, Toll Holdings, the perpetual over-promising and under-delivering Newcrest, Fortescue, TransPacific, Arrium (ex-OneSteel) to name but a few.
Australian market on track for its first week of 5 losses since November 2011. Currently down 26 points. #ausbiz — James Rosenberg (@bjorosenberg) March 21, 2013
Shares in Billabong have rebounded strongly after losing almost 15 per cent before being put into a trading halt ysterday.
The company's stocks have added 9 per cent in opening trade after it confirmed that two private equity bidders had not withdrawn from the sale process.
Its shares have added 6.25 cents to 75.75 cents after coming out of the trading halt this morning.
It should also be noted that the shares hit an all-time low yesterday of 63 cents.
And here are the worst performing. No surprises Leighton is on top of the ladder here:
- Leighton Holdings -6.18%
- Cabcharge -4.84%
- Mount Gibson -4.55%
- Arrium -3.83
- Western Areas -3.77%
Here are the best performers on the ASX 200 this morning:
- Oceanagold 6.75%
- Billabong 5.04%
- Resolute Mining 3.38%
- Beadell Resources 3.21%
- Regis Resources 2.55%
Resources are having a bad start to the day:
- Rio -1.46%
- Fortescue -2.05%
It appears Aussie supermodel Miranda Kerr is just too expensive for the department store David Jones. After five years as the David Jones ambassador, Kerr will step down, according to reports.
Negotiations between the girl from Gunnedah and the retailer had been underway this week regarding Kerr's $1 million-a-year contract, which expires in 2014.
''We have loved being on this journey with Miranda and feel privileged to not only have been a part of it but to watch Miranda's remarkable success and growth,'' David Jones CEO Paul Zahra told News Limited.
It is reported that Jessica Gomes will fill her shoes.
Aussie cover girl Jessica Gomes will headline the celebrity race at this year's Australian Grand Prix in Melbourne, but big names are thin on the ground.
Here's a look at how each sector has started the morning:
- Consumer discretionary -1.22%
- Healthcare -0.98%
- Energy -0.75%
- Industrials -0.61%
Three Leighton directors including chairman Stephen Jones have resigned from the board of Australia's largest construction group because of what they believe to be a ''breakdown in relations'' with the company's major shareholder Hochtief.
Their shock resignations this morning also came after the three board members including former Reserve Bank chairman Ian Macfarlane and Wayne Osborn took the view that the German shareholder ''no longer supports an independent board at Leighton''.
In a statement to the ASX, Leighton said the board would convene at the earliest possible time to elect a new chairman, and the company would make a ''fuller statement in due course''.
Hochtief has a stake of almost 49 per cent in Leighton.
In early trade, the All Ordinaries index is 23.4 points lower, or 0.5 per cent, to 4953.4, while the benchmark S&P/ASX200 is 22.4 points lower, or 0.5 per cent, to 4937.4.
Early take: shares have opened lower, down about 0.1 per cent.
Evan Lucas at IG Markets casts his eye over the market open and says we're looking a decent slide at the start. In a note this morning he says:
We are calling the ASX 200 down 36 points to 4923 (-0.73%), and this will mean the pull-back will now be 237 points from the intraday high - that's a 4.6% pull-back.
As I stated earlier in the week, with no major news to see the market leg higher in the short term, we would expect this sideways movement to continue, if not to pull-back further. With today being Friday and with so much uncertainty in the northern hemisphere, the sell-off today may be stronger than called, as investors close out to avoid being burnt over the weekend.
Some analyst rating changes from late yesterday:
- Sirius Resources raised to buy at Hartleys
- David Jones upgraded to to overweight at Morgan Stanley
- Arrium cut to neutral from buy at Goldman Sachs
- Sydney Airport raised to outperform at Macquarie
- David Jones cut to underperform at Macquarie
- David Jones cut to sell from neutral at Citigroup
One of the interesting stories to keep an eye on today - although it won't have any impact on shares - is the appearance at a hearing in Canberra of Apple, Adobe and Microsoft to explain why local consumers pay so much more than their American counterparts for certain products.
Bloomberg reports that software and hardware products in Australia sell for a median 50 per cent more than their US equivalents, according to a 2012 survey of 186 songs, games, programs and computers by Choice, a not-for-profit consumer advocacy group.
Companies could face restrictions on their ability to set prices in Australia under measures being considered by lawmakers.
''There's been price discrimination against Australian consumers,'' said Matthew Rimmer, a professor at Australian National University in Canberra who specializes in copyright law. ''If the distribution is digital, why are the prices so much higher?''
Meanwhile, our tech team reports Apple has blamed the studios for the high prices. Read more here.
Investor will be watching Billabong closely today when it comes out of a trading halt.
Billabong was forced into a trading halt on Thursday while it confirmed that its two suitors were still interested, after its shares crashed to a record low, raising fears both parties had walked away from the embattled group.
The Aussie dollar, on the other hand, is marginally ahead of where it was at the end of last week. It's currently buying $US1.0437, down from an overnight high of $US1.0459 but a long way above yesterday's close of $US1.038. For the week the local unit is about 0.4 per cent higher.
It was also buying 99.21 yen, 80.94 euro cents and 68.8 British pence.
Turning to local matters and if shares are going to end the week higher they need to post a gain today of 3.17 per cent or more - that's how far the ASX200 is below last Friday's close after four straight days of losses. fait to say, slim to no chance of that happening, especially with weak leads pointing a weak opening and potentially a fifth day of losses on the trot.
Taking a look offshore first up, global markets were down after data showed an unexpected contraction in German manufacturing and Cyprus's president worked on a new plan to obtain a European bailout.
An index of German manufacturing unexpectedly slid to 48.9 this month and services fell to 51.6, while a composite gauge of both industries in the euro area contracted more than forecast. Fewer Americans than forecast filed jobless claims last week. Other reports showed sales of previously owned US homes rose to the highest level in more than three years and a gauge of leading economic indicators topped estimates.
The market ''is quite entitled to a breather and I think it may be taking a breather right now,'' said David Kelly, the New York- based chief global strategist at JPMorgan Funds.
''The U.S. economic story continues to improve,'' he said. ''We still have some European concerns because the Europeans have to figure out a solution for Cyprus.''
For a comprehensive look at this morning's business news, check today's need2know. Here are this morning's key markets numbers:
- SPI futures are 34 points lower at 4936
- The $A is higher at $US1.0442
- In recent trade in New York, the S&P500 was 0.58% lower at 1549.64
- In Europe, the FTSE100 lost 0.69% to 6388.55
- China iron ore added 10 US cents to $US134.20 a metric tonne
- Gold added 0.4% to $1,613.80 an ounce
- WTI crude oil lost $1.05 to $92.45 a barrel
- Reuters/Jefferies CRB index lost 0.3% at 294.05
Hi folks. Welcome to the Markets Live blog for Friday.
Contributors: Thomas Hunter, Jens Meyer, Max Mason
This blog is not intended as investment advice
BusinessDay with agencies