15 May 2015
- The Australian share market pushed higher this week buoyed by the relatively benign federal budget and positive trend from overseas markets.
- The US market pushed higher supported by some big M&A deals and a rally in tech shares. Asian and European markets were mixed.
- In local stock news, BHP approved the in-specie distribution of South32 shares to shareholders. Eligible shareholders will each receive one South32 share for each BHP share.
- Incitec Pivot posted a strong lift in first half profit after cost cutting measures and a weakening Australian dollar boosted earnings at its fertiliser and explosives businesses. Net profit was up 27% whilst revenue was up 6%.
- National Australia Bank came out of its trading halt with the share price barely falling following the announcement of the equity raising, which the market took positively.
- Qantas has seen its fuel bill drop by over $500m as the airline’s fuel hedging arrangements buoy the group’s bottom line. At the current oil price, the airline’s forecast annual fuel cost is $3.9bn, versus the $4.5bn they paid last year.
- Orica has reported a 3% drop in net profit for the first half amid the downturn in the mining sector. The company’s operations are more linked to production volumes which have remained steady. The company continues to take action to mitigate the impact of market headwinds.
- Toll Holdings’ shareholders have approved Japan Post’s $6.5bn takeover. Final court approval has been sought with shareholders to receive $9.04 per share.
- The Australian dollar rose to an uncomfortable 81c against the US dollar before settling back down at 80c – a function of the US dollar falling on the back of weaker economic data (employment and retail sales).
- Home loan approvals rose by 1.6% in March, beating expectations. The value of total housing finance rose by 3.5% in the month to $31.6bn.
- Wages in Australia have increased at their slowest annual rate since the data series begun nearly 20 years ago. Figures show wages rose by 0.5% in the March quarter, lower than expected, whilst the annual pace of growth slowed to a new low of 2.3%.
- The US economy added 223,000 jobs last month, but March’s job gain was revised down to 85,000 from an originally reported 126,000. The unemployment rate dropped to 5.4% while hourly wages edged up slightly.
- China cut interest rates for the third time in six months in a move aimed at stabilising growth in the world’s second biggest economy. The benchmark interest rate was cut 0.25% to 5.1%. The one year deposit rate was reduced to 2.25%.
- Treasurer Joe Hockey released his second budget, which was better received than last year's budget. The Government spent what they could without making the budget position any worse, whilst possibly giving the PM a chance at an early election call. Small business was the big winner. For more details on the budget, click here.
- Greece made a 700m euro debt payment, though they did so using an emergency IMF fund to pay money back to the IMF… Not sure whether the money actually ever left the IMF. Debt talks have showed little sign of producing a breakthrough with an agreement needed to get another bailout in order to meet upcoming debt obligations.
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