The market is down 110 – a fair bit worse than the 33 point fall predicted by the futures this morning. Resources down 2.2% despite BHP being up in the US. Financials flogged following the 5.2% fall in the US financials index overnight.
Dow down 139. Down all session – down 180 at worst. Resources up. Gold down heavily again. Financials worst performing sector by far – down 5.2% – Morgan Stanley buys back $4.5bn in auction-rate-securities, UBS posted 4th-straight Qrly loss, Wachovia reported bigger-than-expected 2Q loss, JP Morgan announced a loss of $1.5bn, and Goldmans earnings estimates were cut by Oppenheimer. The Trade deficit narrowed more-than-expected, the Budget deficit blew out to $102.8bn (triple last year’s number), retail sales growth slowed and consumer confidence remained at all-time lows. Sub-prime losses topped $500bn for the first time.
- Both BHP and RIO up in ADR form overnight, 0.69% and 0.92% respectively. BHP down 85c to 3636c. RIO down 347c to 11050c.
- Metals mostly down overnight – Zinc down 4.4%, Copper down 3.28% and Aluminium down 2.2%. Nickel up 0.75%. Oz Minerals down 7c to 166c.
- Oil price down $1.34 to $113.10 – hit a 14 month low down 23% from its record but still up 58% from last year. Woodside down 47c to 5147c.
- Gold down $13.50 to $810.80 – it was the eighth straight fall, the longest streak since 2001. Somehow Newcrest has managed to go up 61c to 2410c.
- US Bonds up with the 10 year yield down to 3.91% from 4%.
CBA RESULTS OK BUT NOT GREAT – down 1.8% – results described as “solid” and broadly in-line with no nasty surprises – posted full year net profit up 7% to $4.79bn. Cautious outlook for FY09. All-important cash profit up 5% to $4.733bn on strong business lending and robust fund management business – was slightly above the consensus of $4.729bn. Operating income up 10% with some impressive statistics around new deposits and gains in market share. Final dividend at $1.53 compared to the expected $1.55. Higher-than-expected loan impairment charges jumping to $930m from $434m last year – bit above broker’s forecasts, but are low compared to peers and doesn’t seemed to have upset anyone.
TESLTRA RESULTS A BIT FLAT – down 3.1% – net profit slightly below expectations posting $3.69bn compared to consensus of $3.78bn. EBIT up 7.7% against company guidance of 6-8%. Dividend remains 14c as expected. Guidance bit below expectations with FY09 revenue growth forecast at 3-4% and EBIT growth of 6-7% compared to analyst’s 8.5% forecast rise in EBIT.
IRON ORE SECTOR DOWN – FMG down 4.5%. Iron ore stocks being punished – PMM down 1.2%, MGX down 5.9% and MMX down 11.7%.
GOLDS SURPRISINGLY HIGHER – Major gold stocks up despite the gold price fall – NCM and LGL up 4.3% and 3.8%.
Australian consumer sentiment bounces in August up 9.1% from July – index at seasonally adjusted 86.2 from 79.0 – reflects lower fuel prices, talk of interest rate cuts and delivery of tax cuts. Good sign for consumer stocks.
RBA clashing with the view of Australia’s major bank CEOs about dropping interest rates despite rising funding costs – RBA says the banks have no case to delay cuts if rates fall – another sign for an imminent September cut. One broker predicting 5 cuts between now and the end of 2009.
Computershare (CPU) down 8.41% on results – Full year net profit was up 21% to $282m from $233.8m a year ago – below the $324.9m expected. Dividend 11c up from 9c a year ago. Earnigns guidance for 2009 was +10%, ahead of some expectations. CPU also to buy ABC Learning’s UK childcare voucher business for GBP90m.
Goodman Fielder (GFF) down 2% on a disappointing trading update including a write down of $170m on its dairy products division. EBIT declined from $70m in FY06 to $50.5m in FY07. Guidance on ‘normalised’ net profit for the year remains the same if you ignore the write-down. Dividend unchanged at 13.5c.
Equinox Minerals (EQN) down 3.62% on results (a loss) – the 1H loss was less than the circa $18.2m expected due to lower exploration and admin costs expensed. Has sufficient funds to complete the Lumwana project.
CSL Ltd (CSL) in a trading halt pending the release of an announcement about a $1.5bn institutional share placement to raise cash for a $3.5bn acquisition of Talecris Biotherapeutics. .
Hastings Diversified (HDF) down 2.64% as Epic Energy enters into a gas transportation agreement with Adelaide Brighton forecast to earn $42m in revenues over 10 years.
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