(FRIDAY 26TH AUGUST- 08.29 - JAMES GERRISH)...It was a choppy night overseas with all markets finishing in the red. Firstly, European markets were optimistic until we got rumors that Germany may lose its AAA credit rating + the ban on short selling in France, Italy, Spain and Belgium was going to be extended until late Sep/Oct - this squashed the early optimism and most markets finished down more than 1.5%.
Some green early in the US but that too was short lived with all sectors finishing lower led by Energy & Industrials. The DOW JONES finished off -170pts while the S&P 500 lost -1.56%. Locally, the SPI FUTURES are pricing a drop of -49pts when we open here this morning. (ASX 200 closed up +45 yesterday)
It was interesting to note that we discussed Bank of America earlier in the week. Without knowing a lot about the company or its financial well being, we thought it looked pretty sick on the chart. Well Warren Buffet disagrees and he's just bought $5 billion worth of stock but even that failed to ignite its share price. Buffet is certainly backing his view that the US will not re-enter a recession and the recent weakness is a time to be a buyer.
Weekly Chart
MAIN COMPANIES REPORTING TODAY
A quieter day on the reporting front...
FXJ- Expected profit of $246.7m and DPS of 0.5cps
LLC - Expected profit of $407m and DPS of 30cps
SGM - Expected profit of $157.4m and DPS of 26cps
TAP - Expected profit of $2.6m (no divi)
On the economic front we get RBA Govenor Glenn Stevens give his semi-annual parliamentary testimony while in the US we see the Q2 prelim GDP number with the market expecting growth of 1.2%.
AROUND THE GROUNDS
Gold was down 3% early but there was obvious buying into the weakness. Settled marginally higher on the session.
MODEL PORTFOLIO STOCKS
(taken from Morningstar)
We don't own the below stocks in the portfolios however we own the hybrid securities in the Pension Performers Portfolio.
Seven Group Holdings Limited (SVW)
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Seven Group Holdings Reports NPAT Down 90.19% to $70.41m for the Year to 30 June 2011 25-Aug-11 09:52
Seven Group Holdings reported NPAT down 90.19% to $70.41m for the year ended 30 June 2011. Revenues from ordinary activities were $3.16bn, being 31% higher than the pro forma 2010 result. The result was driven by the Group's strongly performing core businesses: WesTrac and National Hire. Diluted EPS was $0.12 compared to $5.87 last year. The net operating cash outflow was $28.87m compared to an outflow of $42.16m in the pcp. The final dividend declared was 18 cents, taking the full year dividend to 36 cents compared with 18 cents last year.
Ramsay Health (RHC)
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Ramsay Health Care Reports NPAT Up 33.8% to $198.38m for the Year to 30 June 2011 25-Aug-11 09:11
Ramsay Health Care reported NPAT up 33.8% to $198.38m for the year ended 30 June 2011. This result was driven mainly by a strong performance across the company's Australian hospitals and an increased contribution from completed brownfield developments. Revenues from ordinary activities were $3.72bn, up 9.4% from last year. Diluted EPS was 90.2 cents compared to 69.2 cents last year. Net operating cash flow was $430.59m compared to $337.31m last year. The final dividend declared was 29.5 cents, taking the full year dividend to 52.0 cents compared with 43.5 cents last year. Barring unforeseen circumstances the company is targeting core NPAT and core EPS growth for the group of 10-12% for FY12.
AUSTRALIAN DUAL LISTED STOCKS
In New York, News Corp fell by US$0.30 to US$16.71, equivalent to A$16.02, A$0.22 below its last close on the ASX.
ResMed fell by US$0.70 to US$29.00, equivalent to A$2.78, A$0.02 below its last close on the ASX.
In London, Rio Tinto fell 5.5 pence to £35.00, A$0.09 lower in Australian currency terms.
BHP-Billiton rose 11.5 pence to £19.44, A$0.18 higher in Australian currency terms.
Henderson Group Plc rose 1.9 pence to £1.27, A$0.03 higher in Australian currency terms.
