31 May 2013
• The Australian share market trended sideways for most of the week before some further losses on Thursday, the result of further poor economic data as well as a drop in commodity prices.
• Higher yielding stocks continued to be hit whilst companies with a large US dollar exposure continued to rise benefiting from the falling Aussie dollar.
• The market ended the month down.….some would say it was the correction we had to have given that the market seemed to get a little ahead of itself.
• James Packer’s Crown sold its 10% stake in rival Echo (think Star City) just days after winning approval to increase the holding to 20%, somewhat surprising the market.
• Speculation is now rife that he has either already won the licence for his proposed 6 star complex at Barangaroo (hence no need to own his rival) or he’s looking to re-build the stake in Echo to 20% at a much cheaper share price…time will tell.
• News Corp (aka Rupert Murdoch’s company) has announced the separation of the company into two companies, 21st Century Fox and the new News Corporation (which will house the newspaper assets and Foxtel).
• Suncorp Group provided a positive update to the market with strong expectations for top line growth over the next 2-3 years.
• The iron ore price has been falling quite sharply more recently breaching its lowest levels in more than 8 months.
• The Aussie dollar has settled around the 96c mark this week.
• The British economy grew in the 1st quarter of 2013, returning to growth and avoiding its 3rd recession since the global financial crisis.
• The economic data from Europe continues to look soft but at least is not deteriorating.
• Retail sales in Australia continue to deteriorate as consumers shift more of their buying habits online.
• US home prices continued their up with a key home price index showing a rise of more than 10% on this time last year….first time growth has been in double digits since 2006.
• In addition, consumer confidence in the US hit a five year high after stronger than expected figures for May.
• Locally, home sales rose for the second straight month in April continuing the housing sector’s slow recovery….the number of homes sold is also increasing.
• The OECD has for the first time cast serious doubt about Australia’s future after the resources boom.
• Liberal strategist Christophe Pyne this week posted letters to independent MPs Tony Windsor, Rob Oakeshott, Bob Katter, Andrew Wilkie and Peter Slipper, seeking their support for a motion of no confidence in the government, which he said could trigger an election on August 3. This looks a long shot with September 14 remaining the election date.
• The world’s biggest energy companies have warned Australia has less than two years to fix the high cost of building big projects or risk being frozen out of a new $150 billion wave of global investment in liquefied natural gas supply.
• Senior executives said Australia needed to reduce the world’s most expensive labour costs, cut regulation and deliver a stable tax and political environment.
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