The Australian share market closed flat after trading in positive territory for much of the morning. Reports of a tightening of credit in the Chinese housing market sent the bourse lower in afternoon trade before a late rally. The S&P/ASX 200 index closed 1.5 points up to finish at 5,440.
The value of trades was $5.1 billion on volume of 834 million shares at the close of trade. The top three stocks by value were Telstra Corporation Limited
(ASX:TLS), BHP Billiton Limited
(ASX:BHP) and Wesfarmers Limited
(ASX:WES).
On the futures market the SPI is 9 points up.
Economic news
Reports out of China this afternoon indicate the Industrial Bank has suspended mezzanine financing and supply-chain financing in the real estate sector until the end of March according to The Shanghai Securities News.
It appears data from National Bureau of Statistics showing slowing of new-home price growth in China’s first-tier cities in January was the catalyst for the decision. Developers in a few large cities have started to cut prices as supply outstrips demand, with fears that some Chinese builders may default on their debt this year. The news sent Shanghai as much as 2.5 per cent lower in afternoon trade.
Company news
NIB Holdings Limited
(ASX:NHF) has said a 20 per cent increase in premium revenue and a 9.3 per cent increase in underwriting were the major factors behind a rise in net profit for the first half of Fiscal 2014. NIB reported an interim net profit of $39.7 million, up 9 per cent on the previous corresponding period, beating analyst predictions of $37.6 million. NIB’s net margin, an important metric for insurers, was 5.2 per cent for H1, down from 5.7 per cent for the previous corresponding half. However NIB says it is on track to achieve full year profit guidance. The company declared an interim dividend of 5.25 cents fully franked, up 0.25 cents from a year ago. Shares in NIB Holdings closed 0.78 per cent down at $2.56.
Patties Foods Limited
(ASX:PFL) has blamed the loss of a major frozen fruit contract and discounting of its frozen pies for a dip in its net profit for the first half of 2014. The maker of such iconic brands as Herbert Adams and Nanna’s reported a net profit of $8.8 million for the half, down 3.3 per cent on the previous corresponding period. The company says its balance sheet remains strong and it is looking to at least match last fiscal year’s underlying net profit. Shares in Patties Foods closed 7.26 per cent up at $1.33.
Shares in Transfield Services Limited
(ASX:TSE) spiked in morning trade after securing a $1.22 billion government contract to work on offshore processing centres on Nauru and Manus Island after receiving a letter of intent from the Department of Immigration and Border Protection. Transfield Services has already begun the mobilisation and transition process. A formal handover is expected to start at the beginning of next month and continue for a 20 month period. Shares in Transfield Services are up 24.5 per cent.
Caltex Australia Limited
(ASX:CTX) has reported a full-year profit of $332 million, down 27.5 per cent from $458 million in 2012, in line with previous guidance. The company reported growth in the sales of premium fuels and an increase in the efficiency of its refining operations, although revenue for the refining business was negatively affected by higher oil prices. Caltex will pay a 17 cent fully franked final dividend. Shares in Caltex Australia are trading up 2.2 per cent.
BlueScope Steel Limited
(ASX:BSL) has rebounded to a first half profit and affirmed its confidence in achieving future earnings growth. The steelmaker’s reported a net profit of $3.7 million in the last six months of 2013 from a loss of $23.8 million the year before. Managing Director Paul O’Malley says the business has stabilised and measured investments have been made, while maintaining a conservative balance sheet. Despite the return to profit, BlueScope has declined to pay an interim dividend. Shares in BlueScope Steel are trading up 7.33 per cent.
The best and worst performers of the day
The best performing sector was Consumer Discretionary adding 14 points to close at 1,848. The worst performing sector was Telcos, losing 42 points to close at 1,788 points.
The best performing stock in the S&P/ASX 200 was Transfield Services Limited
(ASX:TSE), rising 24.53 per cent to close at $0.99. Shares in Beach Energy Limited
(ASX:BPT) and BlueScope Steel Limited
(ASX:BSL) also closed higher.
The worst performing stock was Pacific Brands Limited
(ASX:PBG), dropping 4.00 per cent to close at $0.60. Shares in Independence Group
(ASX:IGO) and Mount Gibson Iron Limited
(ASX:MGX) also closed lower.
Commodities
Gold is buying $US1,322 an ounce. Light crude is $0.55 down at $US102.20 a barrel. The Australian dollar is buying $US0.8972.
