The Australian sharemarket is improving modestly for the fourth time this week. Conflict in Syria is still a problem for markets; however the chance of an imminent US led military intervention seems to have diminished for the time being. Overnight, the British parliament voted against using force in Syria.
Australian consumer confidence surges in February
Syria is a small player on the oil production front, only accounting for around 3 per cent of global production. However Iran, Iraq and Saudi Arabia (neighbours) account for around 20 per cent of global exports. The market has been worried of the situation in Syria spreading to the region.
Almost all sectors are higher, with the property trusts a touch lower. Australia's biggest telco and sixth biggest company, Telstra (TLS) is up 0.8 per cent. Strength from the major banks is helping lift the broader sharemarket higher.
The profit reporting season unofficially comes to an end today. Australia´s second biggest airline, Virgin Australia (VAH) posted a $98.1m loss for FY13 (July12-June13). The result was held back by approximately $100m in restructuring costs - linked to the acquisition & integration of both Skywest & Tiger, together with the move to its Sabre booking system. The carbon tax has cost VAH $47.9m over the year; a cost it was unable to recoup in revenue. No dividend was announced; however there hasn´t been a distribution since early 2008. Looking ahead, the weaker Australian dollar, higher oil prices & soft demand is likely to provide headwinds for the discount carrier. VAH shares fell following the result, taking the losses to around 5% since January. No profit guidance was provided; however VAH improved by 47% in 2012.
Specialty retailer, Harvey Norman (HVN) announced an 18% slide in FY13 profit. Margins were squeezed by aggressive discounting.
Private sector credit rose by 0.4 per cent in July as expected.
At midday, 913.7m shares have changed hands, worth $3.4 billion. 492 stocks are higher, 321 are weaker and 266 are unchanged.
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