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11:59am: There has been little improvement in retail conditions so far in 2013, shopping centre owner Westfield Group says.
But company chairman Frank Lowy presented a more upbeat assessment of Westfield’s US operations.
‘‘Retail sales growth in Australia was subdued in 2012 and that trend is continuing in 2013 given the lower level of consumer confidence which has existed for some time,’’ Mr Lowy told Westfield’s annual general meeting in Sydney. ‘‘Despite this difficult environment, the business in Australia is performing well and productivity within the Australian portfolio remains high.
‘‘At the same time, operating performance in our international markets has been encouraging – with the US market now well into a recovery phase following the global financial crisis.’’
Mr Lowy confirmed Westfield’s financial forecasts for 2013, including a distributions of 51 cents per security, up 3 per cent from 2012. The guidance was unchanged from Westfield’s first quarter update issued on May 13.
Westfield Group securities are down 0.7 per cent at $11.835, while Westfield Retail Trust has lost 1.1 per cent to $3.135.
11:54am: The dollar has just dropped to a new 19-month low at 95.47 US cents, as selling of the currency continues.
It’s also under pressure against other major currencies, buying 97.5 yen and 74.35 US cents.
The dollar over the past 12 months.
11:41am: So much for the eraly gains – the ASX200 has slipped into the red, dragged down by losses in the banks, Wesfarmers and Telstra, which are offsetting gains in BHP and Rio.
11:35am: The amount of construction work done fell 2.0 per cent in the March quarter, disappointing expectations of 2 per cent growth.
Over the year to March, the volume of construction work done was up 0.2 per cent, the Australian Bureau of Statistics said.
Total building work done in the March quarter, including homes and non-residential buildings like offices and shops, fell 1.1 per cent from the December quarter.
Engineering work done, which includes mines, roads, bridges and the like, was down 2.5 per cent in the quarter.
11:33am: The Australian dollar is falling faster-than-expected on the back of better-than-expected US economic data, Westpac chief currency strategist Robert Rennie says:
- The currency is at risk of falling as low as 93 US cents in the short term, and its movements will be dependent on upcoming local economic data such as capex (tomorrow), the Reserve Bank’s board meeting next week and first-quarter gross domestic product figures.
- A spate of US economic data set to be released in the US next week – including the latest manufacturing and jobless figures – will also play a critical role.
- Those are all important factors, but I would certainly anticipate that as we start to move into the low 90s – 93 to 94 US cents – that we will start to see some more demand coming through for the Aussie. It means that we’ve had a material correction.
The dollar is currently buying 95.61 US cent, just above its earlier 19-month low of 95.56 US cents.
11:22am: Some more on Aristocrat: the pokies machine maker will pay an interim dividend of 7 cents a share on June 28, compared with 4 cents previously.
Investors are also liking plans to return more money to shareholders, as the company lifts its target payout ratio to 80 per cent of net profits from 60 per cent previously.
Shares in Aristocrat rose as much as 7 per cent in early trading, the most in six monmths, and are currently up 6 per cent at $4.29.
Chief executive Jamie Odell says the company’s ‘‘fundamentals are continuing to improve’’, pointing to the performance of its games and focus on costs.
‘‘We are fully focused on driving sustainable value and returns beyond our turnaround window,’’ he said.
Aristocrat expects net profits in the second-half to be similar to those in the first six months.
11:04am: Despite a decent slip in the price of iron ore overnight (down $US3.10), the big miners are stronger today:
- BHP: +0.71%
- Rio: +2.04%
- FMG: +1.47%
10:59am: Bell Potter senior adviser Stuart Smith said he expected resources companies to be well supported throughout today’s session, and banking stocks to soften.
‘‘Whilst some of the gurus are saying the resources stocks should be sold, I have got seven pages of backup here to say they should be bought,’’ Mr Smith said.
‘‘I think the banks index will soften – it is not going to fall out of bed – but it will soften and resources will go up to meet it.’’
10:55am:A really interesting story about a huge international money laundering scam.
US prosecutors have announced what they say is the biggest international money laundering prosecution in history – a $US6 billion ($A6.2 billion) trail that allegedly includes $US36.9 million ($A38.4 million) deposited in Westpac Bank accounts.
The trail was allegedly left by Costa Rica-based Liberty Reserve, a currency-transfer and payment-processing company that allowed customers to move money anonymously from one account to another via the internet with almost no questions asked, and has travelled through 17 countries, including the Westpac accounts in Australia.
10:51am: Talk about playing catch up … Tokyo stocks have opened 1.26 per cent higher as more signs of a US economic recovery boosted Wall Street to new highs and sent the yen lower against the dollar.
The benchmark Nikkei 225 index was up 180.57 points to 14,492.55 at today’s start.
10:51am:Australia’s rate of economic growth in the coming months is expected to stay above it’s long term average, a private survey shows.
A rally on the share market, modest improvement in productivity and a smaller drag on company profits all added to the improved outlook.
However, Westpac senior economist Matthew Hassan said he doesn’t expect the good conditions to be sustained over the rest of the year because of falling commodity prices and slowing mining investment.
‘‘The non-mining parts of the economy – housing and the consumer in particular – will provide some offsetting improvement,’’ he said.
‘‘Our fear though is that ongoing weakness in non-mining business investment and a poor global backdrop means the overall mix will not be enough to counter the drag from the mining sector.’’
10:41am:Some more on the plight of the Aussie dollar, which has fallen almost 6.8 per cent since May 6.
“It is a continuation of an ongoing story. Ten-year yields in the US, following on from the very good run of economic data, were reaching highs of 2.17,’’ Westpac chief currency strategist Robert Rennie said.
“That is the highest level that we’ve seen in US yields back to April of last year. That is a support for the US dollar. It’s very a strong US dollar story that is driving the weaker Aussie.”
Overnight, US house prices recorded their biggest gains since 2006, while US consumer confidenc rose in May for a second consecutive month to a five-year high.
The data gave investors more reason to believe the US Federal Reserve would taper off its $US85 billion a month bond buying program, designed to encourage banks to lend.
“It is a resurgent US dollar, and that is a story that is hurting all currencies, including the Australian dollar,” Mr Rennie said.
10:34am: Stephen Koukoulas on the dollar and rates, and how markets are pricing further cuts this year:
As AUD falls, market still pricing in about 20% chance of June rate cut: Full cut priced into Sept and risk of one more after that
— Stephen Koukoulas (@TheKouk) May 29, 2013
10:32am: Now for some of the major sliders on the ASX50:
- Newcrest: 1.77%
- Mirvac: -1.66%
- Wesfarmers: -1.24%
- CFS Retail: -1.2%
- Crown: -1%
- Lend Lease: -0.99%
10:25am:Qantas is leading the charge higher on the ASX50 with a gain of 3.29 per cent. Here are the other major gainers on that index:
- News Corp CDI-B: +3%
- QBE: +2.82%
- CSL: +2.41%
- FMG: +1.77%
- Iluka: +1.53%
- Rio: +1.3%
10:16am: The ASX has followed offshore markets higher.
The All Ords is 0.4 per cent higher, or 18.2 points, to 4968.8, while the ASX200 is 0.4 per cent higher to 4990.9.
10:08am:Shares in Aristocrat Leisure are 5.9 per cent higher after the gaming machine supplier increased its dividends to shareholders after its first half profit grew by 11 per cent.
Its shares rose 24 cents to $4.29 in early trade.
10:04am: And then there’s this from Stephen Koukoulas on the state of the Aussie dollar:
AUD dipping to 0.9565. Interesting thing is is that it is still 5 to 10% overvalued. Not even cheap yet
— Stephen Koukoulas (@TheKouk) May 28, 2013
10:02am: A thought on what the falling dollar will mean for motorists, and possibly, by extension, the election:
Won’t be long before people start screaming blue murder about petrol at $2 a litre…just in time for September vote? #AUD heads below US96c
— Jacob Greber (@jacobgreber) May 28, 2013
9:59am:Some thoughts from Evan Lucas at IG Markets on the local market today. He writes that ‘‘looking at the graph of the ASX 200 from the last two weeks, the term ‘don’t catch a falling knife’ certainly springs to mind’’:
The index has shed over 289 points from the high on May 20, which was a momentum shifting day in defensive stocks. All four banks reversed their gains on that day as AUD/USD continued to slide from big falls two days before. The lead from the currency saw financial index smashed, as ANZ, WBC and NAB were shed left right and centre by international investors.
Talk on the street is that investment fund BlackRock shed 2.15 million shares in ANZ and 440,000 shares in CBA over this time. BlackRock is the third largest shareholder in Australia. This news explains why foreign investors have been winning the battle versus yield hunters.
The glaring profits in ANZ and NAB are too good to ignore, and a falling AUD has seen the repatriation of profits overriding yield returns. This illustrates why the knife has fallen, as Australian financial stocks are very top-heavy and now make up 33% of the ASX.
However, the shedding in the defensives stocks will soon run out. The volumes through the market have been very strong, well above the normal averages. This means the market is approaching the end of the international repatriation stage, and could see the knife hitting the floor as yield-hunters jump back in.
9:55am:ANZ bank is to spend $425 million buying back some of its shares.
The bank said it was comfortable with its capital position and would therefore undertake a share buyback to offset the dilutive impact of its recent issue of new shares.
ANZ’s dividend reinvestment plan and bonus option plan offered at its half year results in April allowed shareholders to take up new shares rather than receive a cash dividend.ANZ’s buyback will begin no earlier than June 13.
9:54am:More on the dollar. Richard Yetsenga, ANZ’s head of global markets research, said 96 US cents had been a key support level for the Australian dollar.
“It just went through some stops and through 96,” Mr Yetsenga said.
“The underlying trend in the Australian dollar is down as capital reallocates away from Asia and the commodity currencies. I think this morning’s price action needs to be considered within that broader context.”
The dollar’s sudden dive this morning.
9:53am: In local mining news this morning, BHP Billiton has flagged ongoing rationalisation of its coal operations, which will include further divestments as it works to lift returns.
It has already idled production at high cost open cut mines such as Norwich Park and Gregory in Queensland, and it is seeking to sell its mine in New Mexico, USA, to the Navajo Nation. According to US reports, this could raise an estimated $US85 million.
BHP has put its coal operations in focus during an analyst visit.
With coking coal, BHP said China would remain a significant importer, although growth rates were likely to slow. A rising portion of its future steel would be produced by electric arc furnaces, which use scrap steel rather than steel produced from blast furnaces, which use coal and iron ore.
9:51am: Gaming machine supplier Aristocrat Leisure has increased its dividends to shareholders after its first half profit grew by 11 per cent.
Aristocrat made a net profit of $52.6 million in the six months to March 31, up from $47.3 million in the same period last year.
Its earnings in the six months to March were lower than in the previous corresponding period, but lower interest expenses due to smaller debt, plus cost cutting measures helped deliver profit growth.
Chief executive Jamie Odell said Aristocrat’s full year net profit is expected to be higher than the previous year’s $91.7 million.
Spec Wednesday,
BGS and DYE will both go gangbusters today, don’t take your eye off ESI, 2 weeks until ALDP resulta are known
9:45am:The Australian dollar plumbed its lowest in 19 months on Wednesday after key support around $0.9581 finally gave way.
The Aussie has skidded nearly 8 percent in May, the largest monthly drop since September 2011, mostly on speculation the US Federal Reserve may taper off its monetary stimulus soon amid signs of economic improvement.
The Aussie last fetched $0.9561, with traders citing bids around $0.9550 and with stops just below. It fell as deep as $0.9555, its weakest since October 2011.
More on this shortly.
9:41am: Hi everyone. Welcome to the Markets Live blog for Wednesday.
Contributors: Thomas Hunter, Jens Meyer
This blog is not intended as investment advice
BusinessDay with agencies
Source Article from http://www.smh.com.au/business/markets-live/markets-live-stocks-slip-into-red-20130529-2naea.html
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