Local sharemarket boasts strong earnings despite BHP's five month low
By the end of the day, the ASX 200 (XJO) both finished 0.19% up 10.8 points at 5637.6. US consumer prices rose only 0.1% in July, just below expectations. Housing starts up by 15.7% at 1.093 Million annual rate for July, well above the forecasted 969,000. US shares finished with solid gains, the Dow and S&P 500 up 0.5% and the Nasdaq up 0.4%. Iron ore and steel prices continue to fall in China, with traders unimpressed by the Chinese government's efforts to boost construction demands.
The materials sector is the biggest drag to the market today, down 2%. Big news of the day is BHP with shares falling 3.9% after news of an upcoming demerger of its smaller mining assets. The new entity will be listed on the ASX by mid-2015. BHP had reported a 23% growth in FY14 profit to US$13.8 Billion (AU$14.93 Billion), well in line with market expectations.
Also in the red were Rio Tinto (RIO), down 0.6% and Fortescue (FMG), down 1.3% despite reporting an increase of 56% in FY14 profits to US$2.7 Billion. Result was slightly below the $2.782 Billion expectation. Offsetting the losses are Amcor (AMC) up 4.3%, Adelaide Brighton (ABC) up 2.5% and Sandfire Resources (SFR) up 2.3%.
The industrials finished 0.62% lower. Global online employment classifieds platform Seek (SEK) reported a slump of 35% in net profit this morning. Profits fell to $195.6 Million in the year to June, from $300.1 Million the previous year. SEK shares are down 1.5%.
Brambles (BXB) shares fell 1.3% despite reporting a 5% increase in profit for FY14. 2014 was a big year for the company, transforming itself from being an industrial conglomerate to becoming a logistics services company. BXB is now focused on becoming a global pallets and containers and transport solution provider after the demerger of the Recall information management business in December 2013.
The top three biggest gainers today are consumer staples up 1.4%, healthcare up 0.79% and the energy sector up 0.55%. Wesfarmers (WES) profit grows to $2.69 Billion, up 19% from $2.26 Billion in the previous year. WES has also announced generous payouts including a Capital Return of $1 per share due to pay early December 2014. This is in addition to fully franked Final and Special Dividends of $1.05 and $0.10 per share respectively. WES shares are up 3.8%.
Woodside Petroleum (WPL) reported solid 1H14 earnings today with net profit after tax (NPAT) up by 33%, aided by record first half production and productivity improvements. An Interim dividend of US$1.11 was in line with the company's stated 80% payout ratio and will be paid out on 29 August 2014. Shares are up 0.77%.
Towards the end of the day, the financial sector gained 0.5%, with wins for the big four banks. ANZ is up 1.3%, NAB 0.9%, CBA 0.4% and WBC 0.4%. Today's top gainer, QBE Insurance (QBE) soared 6.44% after coming out of a trading halt earlier today, after announcing a Share Purchase Plan. Suncorp (SUN) is down 4.78%, trading ex-dividend ($0.40 final and $0.30 special dividends) today. Payment will be made to shareholders on the 1st of October. This is the third year in a row SUN is distributing both final and specialdividends to its shareholders. Other stocks trading ex-dividend today are entertainment product discount retailer JB Hi-Fi (JBH) and specialist fund managers Magellan Flagship Fund (MFG) with dividends of 29 cents and 21.8 cents per share respectively.
2.35billion shares were traded today, worth $5.946billion. The Australian dollar buys US$92.94 cents.
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