Market Wrap: Aus shares close higher on banks and miners

Market Reports

The Australian share market climbed steadily throughout the day closing up 0.83 of a per cent on its highs. All the big four banks put in a strong performance as did the miners. 
 
Weekly Summary
 
Today, the S&P/ASX 200 index closed 44 points up to finish at 5,338. 
Over the week the index rose 8.7 points. 
 
The value of trades was $5.36 billion on volume of 1.13 billion shares at the close of trade. The top three stocks by value were Commonwealth Bank of Australia (ASX:CBA), BHP Billiton Limited (ASX:BHP) and Newcrest Mining Limited (ASX:NCM).
 
On the futures market the SPI is 32 points up.
 
Wall Street

US stocks have risen over the four trading days this week: The Dow Jones Industrial Average added 113 points. The S&P 500 Index added 14 points. The NASDAQ added 47 points. The 100 Index added 31 points. 
 
Company news 
 
Shares in Metcash Limited (ASX:MTS) fell nearly ten per cent today after the company downgraded their profit outlook after market close of trade yesterday. The company faces increased competition from Coles and Woolworths.
 
In response, the retail, wholesale distribution and marketing company has announced it will invest nearly $700 million over the next five years in a transformation plan. 
 
Chief executive Ian Morrice said the strategy is designed to facilitate long-term sustainable growth for Metcash and its customers by growing sales and improving efficiency. Elements of the strategy such as discounting are already in place.
 
Central to the plan is a proposed transformation of the Food and Grocery division with the company allocating $100 - $125 million to fund store refurbishments, new stores and store buybacks, as well as $160 – 180 million for supply chain transformation.
 
The plan will largely be funded by a reduction in dividends. Earnings per share in the year ending April were expected to fall 13 per cent to 15 per cent. Earlier guidance had predicted “high-single digit” decline in underlying earnings per share. Shares in Metcash are trading down 9.52 per cent at $2.85. 
 
Australia’s Big Four Banks are key players in a global list of institutions that have helped Gina Rinehart secure funding for her Roy Hill iron ore mine in West Australia’s Pilbara region. 
 
The $US7.2 billion long term finance deal comprises of loans and guarantees from five export credit agencies and a consortium of 19 commercial banks from Australia, Japan, Europe, China, Korea and Singapore.
 
The Australian banks include Commonwealth Bank of Australia (ASX:CBA), ANZ Banking Group (ASX:ANZ), National Australia Bank Limited (ASX:NAB) and Westpac Banking Corporation (ASX:WBC)
 
Roy Hill CEO Barry Fitzgerald says the package is the largest ever project financing for the development of a land-based project world-wide.  
 
The Roy Hill project is 70 per cent controlled by Gina Rinehart's company, Hancock Prospecting with the remaining interest owned by South Korean steel giant Posco, Japanese steelmaker Marubeni and Taiwan’s China Steel Corporation. . 
 
Shares in all of the big for were up today with shares in Commonwealth bank trading up 0.92 per cent at $75.66. 
 
iiNet Limited (ASX:IIN) has started its search for a new chief after its CEO, board director and founder Michael Malone resigned from his role today after 20 years in the organisation. 
 
The internet service provider says Mr Malone has been on a sabbatical since November last year and made the decision to depart while on extended leave. 
 
While he was away David Buckingham was acting as the company’s CEO and will continue in the position as the board conducts an international search for a replacement, hoped to be concluded by the end of the current financial year. 
 
Mr Malone says he is leaving the company in the best financial shape it has ever been in with a strong growth plan for future success. Shares in iiNet closed 0.92 per cent up.
 
Shares in Cochlear Limited (ASX:COH) rose by over 3 per cent today after the company announced the US Food and Drug Administration has unanimously approved the Nucleus Hybrid L24 Cochlear Implant system. The company says the new device combines the features of previous separate devices and improves the user’s ability to recognise speech. 
 
Cochlear said in their first half results announcement that outstanding regulatory approvals on new products had slowed releases while also depressing sales of existing products. Shares in Cochlear closed 4.21 per cent up. 
 
The best and worst performers

The best performing sector was Energy adding 202 points to close at 13,594. The worst performing sector was Consumer Discretionary, losing 1.5 points to close at 1,833 points.
 
The best performing stock in the S&P/ASX 200 was Energy World Corporation (ASX:EWC), rising 8.77 per cent to close at $0.31. Shares in Silver Lake Resources Limited (ASX:SLR) and Independence Group (ASX:IGO) also closed higher.
 
The worst performing stock was Metcash Limited (ASX:MTS), dropping 9.52 per cent to close at $2.85. Shares in Alacer Gold Corp (ASX:AQG) and REA Group Limited (ASX:REA) also closed lower. 
 
Commodities

The price of gold is buying $US1,332.70 an ounce, and is down $50.50 over the week. Light crude is $0.94 lower at $US99.43 a barrel. The Australian dollar is buying $0.9064 and is flat for the week.