singapore hotel: Markets Live: Banks, retail head down

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March 28, 2013

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The Australian sharemarket fell to end the week, hit by growing concerns about the larger impact of Cyprus’s 10 billion euro bailout and losses on Wall Street.

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5:01pm: That’s all from us, folks. Thanks for your company today and through the week. We hope everyone has a happy, safe and chocolate-filled Easter. We’ll be back on Wednesday, but tune in to BusinessDay on Tuesday for the April rates decision.

In the meantime, here’s the wrap of today’s session.

4:53pm: China shares are headed for their worst loss in nearly a month, hurting Hong Kong markets, with banks taking a hit after they were ordered to tighten control over wealth management products (WMP) and improve transparency.

At midday, the CSI300 of the leading Shanghai and Shenzhen A-share listings was down 3.1 per cent at 2,504.3, with chart resistance next seen at the March 19 low at around 2,492. The Shanghai Composite Index shed 2.6 per cent.

4:47pm: A quick look at where the dollar is at the end of the week. It was recently buying $US1.0427, 98.17 yen, 81.53 euro cents and 68.88 pence.

4:21pm: The Australian share market has closed lower on profit-taking, ahead of the four-day Easter break.

At the close on Thursday, the benchmark SP/ASX200 index was 28.5 points, or 0.57 per cent, lower at 4,966.5 while the broader All Ordinaries index was 27.1 points, or 0.54 per cent, down at 4,979.9.

On the ASX 24, the June share price index futures contract was 30 points weaker at 4,974, with 24,560 contracts traded.

4:06pm: To another of the stocks which has had a black day. Nufarm shares are down to the lowest level since September 2011 after giving up 16 per cent today.

It continues a big fall for the agricultural products supplier. In mid 2008, its shares were changing hands at $17.32, but it touched a low of $3.25 in July 2010. Its most recent high was $6.41 just 8 weeks ago.

3:59pm: And now for the day’s major sliders:

Nufarm: -16.14%

Troy Resources: -12.05%

Aurora Oil Gas: -11.23%

Newcrest: -7.77%

Seven West Media: -4.91%

3:58pm: A quick look at the winners and losers on the ASX200 as markets get ready to pull the door closed ahead of the long weekend. To the gainers first:

Sirtex: +7.05%

Boart Longyear: +4.05%

PanAust: +3.99%

Cardno: +3.94%

OZ Minerals: +3.6%

3:47pm: Chris Weston at IG Markets has begun drawing the curtain on the first quarter of the year on the ASX. In a note just released, he writes:

The ASX 200 looks to close out the quarter on a negative tone, with the index falling 0.3%. The quarter has been very strong indeed, although the same can’t be said for March, with the index falling 2%.

Liquidity has been pretty scarce today given many traders have taken an extended break, however there just seems to be a feeling that the market wants to roll over, we just need the technicals to provide the green light.

As things stand we are staying relatively neutral on the market, with some bullish factors still likely to play out in US which could support the Aussie market. It has to be said though, with the moves in Asia and some of the other European concerns, a 0.3% fall is quite positive.

3:43pm: Another note on the Newcrest share price – it has slumped today to its lowest level since November 2008.

3:31pm: Ben Taylor at CMC Markets has offered some early thoughts on the day’s trade.

Our market has moved lower in a quiet day of trading before the Easter long weekend break. The impact of the Cyprus bailout details, US market falls and Italian election concerns have put a dampener on the last trading day in March.

Traders are watching with anticipation for the reaction from Cyprus citizens as their banks open again following the announced bailout, which levied accounts holding more than 100,000 Euros.

We are also looking to see the consequence of money transfer controls and credit card transaction caps. It will be interesting to see if Italians and Spanish residents show any signs of nervous contagion with their funds in a pre-emptive response to the Cypriot restrictive measures.

3:14pm:More on Newcrest. Annual copper production guidance remains unchanged at 75,000 to 85,000 tonnes, while full year site cost guidance and full year capital guidance were unchanged.

In Papua New Guinea, production at Lihir is in the range of 620,000 to 680,000 ounces, while Gosowong production is in the range of 300,000 to 325,000 ounces for the 2013 financial year.

Newcrest has decided to undertake a complete repair of its autoclave at Lihir to ensure a long-term, reliable and safe performance.

Newcrest also announced the appointment of Geoff Day as executive general manager (EGM) of sustainability and external affairs to succeed Stephen Creese who is retiring from his current role as EGM of corporate affairs on July 1.

Chief operating officer Greg Jackson will now focus on special projects, while Lihir EGM Brett Fletcherand EGM Australia and Indonesian Operations Peter Smith will report directly to the chief executive Greg Robinson.

3:11pm:Gold miner Newcrest has cut its production targets by about 10 per cent due to ongoing challenges at its Lihir operations.

Newcrest, which also announced a series of executive changes, reduced its gold production guidance to 2.00 to 2.15 million ounces for the 2013 financial year, which is about 10 per cent below its original forecast.

Shares in Newcrest were down by $1.13, or 5.17 per cent at $20.74 a short time ago.

More in a moment.

3:08pm: Asian stocks are down, with Chinese banks falling on concern new rules governing wealth-management products will hurt earnings.

The MSCI Asia Pacific Index dropped 0.8 per cent to 134.99. About three stocks fell for each that gained on the measure, which has risen 0.5 per cent this week and 4.4 per cent this quarter. The gauge closed at 135.06 on Feb. 28.

The Shanghai composite is down 2.64 per cent, pretty close to the day’s lows.

While we’re thinking about China, the nation’s industrial profits grew 17.2 per cent in the first two months of this year from a year ago, official data showed today, adding to signs that a burgeoning macro economic recovery is being felt across the corporate sector.

“The industrial profit figure in the first two months extended the recovery trend starting from the fourth quarter of last year,” said He Ping, an official at the National Bureau of Statistics (NBS) in a statement alongside the data on Thursday.

2:47pm: The nation’s largest industry super fund AustralianSuper has appointed Reserve Bank of Australia board member Heather Ridout as its new chairwoman.

Ms Ridout will take over as chairwoman of AustralianSuper in early April, following the resignation of Elana Rubin.Ms Rubin finishes in the role next Friday.

An AustralianSuper spokeswoman said Ms Ridout has been a director with the fund since 2007 and was previously chief executive of Ai Group, which established the fund with the ACTU.

‘‘She knows the fund extraordinarily well,’’ she said. ‘‘We’re expecting a very smooth transition.’’

2:42pm: Shadow treasurer Joe Hockey says the federal opposition will keep the increase in the compulsory superannuation guarantee in place should it win government in September.

Funding to pay for tax concessions to allow the increase from nine to 12 per cent are supposed to come from the minerals resource rent tax (MRRT) – an impost the coalition would scrap in government.

‘‘We are going to continue with that program to increase it to 12 per cent. It’s the only initiative out of the mining tax that we have committed to,’’ Mr Hockey told reporters in Brisbane today.

2:42pm: And here’s another view on rates. HSBC Australia chief economist Paul Bloxham said the RBA was finished with its cash rate cuts and he expected an interest rate hike in the last three months of 2013.

He said the 1.75 percentage points of interest rate reductions from November 2011 to December 2012 would still be working its way through the economy and that Chinese economic growth would surge back to 8.6 per cent later this year.

‘‘This month brought further evidence that low interest rates are gaining traction, with the clearest signs in the consumer sentiment numbers and the housing market indicators,’’ Mr Bloxham said.

‘‘There were further signs that households perceive current and future economic conditions as having improved, consistent with the rising equity market in recent months.’’

Mr Bloxham said the RBA’s next rate move was likely to be up because the cash rate was at a record low.He said a possible catalyst for a rate hike would be over-inflation in the housing market.

‘‘Rising housing prices are needed to kick-start a rise in housing construction, which is a necessary part of the rebalancing of growth that Australia needs, after mining investment peaks later this year,’’ Mr Bloxham said.

2:27pm: Looking forward to next week, the main game on the economics front is Tuesday’s rates decision by the RBA.

Which way will they go? No change, say economics surveyed by Bloomberg. In fact, 28 out of 28 say the official cash rate will stay on hold at 3 per cent.

Credit Suisse data more or less supports the view, with the market giving a downwards move of 25 basis points on an 8 per cent chance.

JP Morgan Australia chief economist Stephen Walters says he has changed his forecast for the next rate cut to November, from May. He said the firmer economic data would give the RBA some comfort about the outlook.

‘‘As RBA governor Glenn Stevens indicated late last year, the swollen pipeline of work still to be done means investment in mining will keep rising as a share of gross domestic product for a few quarters yet,’’ Mr Walters said.

‘‘The RBA’s earlier rate cuts, starting in late 2011, finally are getting traction.‘‘The economy, therefore, needs no further policy support, at least not yet.’’

1:30pm:Shares in Linc Energy fell more than 12 per cent after the company announced it has raised $200 million through a convertible bond issue. Linc plans to use the proceeds to pay down existing debt and to strengthen its balance sheet.

‘‘The bonds will support and de-risk the commercialisation of the company’s key assets and provide working capital for at least the next three years,’’ Linc said in a statement.

The Bonds convert at $3.40 per share, representing a premium of 27.5 per cent to the closing share price on Tuesday.

The company’s shares fell 12 per cent to $2.30 on Thursday morning after coming out of a trading halt.

Chief executive Peter Bond said the additional funding gave the company the flexibility to accelerate the development of its energy portfolio.

1:25pm: Here’s a snap shot of how the region is performing:

Nikkei(Japan): -1.1%

Shanghai: -2.3%

Taiwan: -0.4%

Kospi: -0.2%

SIngapore: -0.1%

New Zealand: flat

1:25pm: CMC Markets chief strategist Ric Spooner said the financial sector and Woolworths were dragging the market down as investors took the opportunity to take profits.

‘‘The biggest weakness is the financial sector, particularly the major banks,’’ he said.

‘‘What we’re seeing is people taking profits in these areas and other high yield places.’’

Trading volumes were also low as Australians prepared for the Easter long weekend.Mr Spooner said investors were also concerned about the European risk after an increase in Italian and Spanish bond yields overnight.

1:04pm: Australia’s next Treasurer – according to the polls – is extremely concerned about the global economic outlook, saying Australia needs to get its house in order to prepare for any flow-on volatility.

‘‘I’m very bearish on Europe, and I’m long-term bearish on the United States,’’ Mr Hockey told ABC radio in Brisbane.

‘‘I think we are in a period of great volatility, therefore let’s prepare now for those dark days ahead.’’

Mr Hockey said there was a need for a stable and predictable government, tax, and regulation.

‘‘The more volatile the world is, the less volatile your government has to be,’’ he said.

Who’s hot and who’s not … the best and worst so far today.

12:40pm:Melbourne home owners are being forced cut the asking prices of their properties at a steeper rate than even during the global financial crisis, highlighting the continued softness of the city’s housing market.

The new research comes as the Reserve Bank of Australia yesterday issued an unusually frank assessment of Melbourne’s housing sector, forecasting that further price falls are ahead due to an oversupply in the new home and apartment markets.

Analysts RP Data report that vendors are now selling their homes for 7.5 per cent less than they originally asked for when they listed their property for sale.

The degree of ‘‘discounting’’ has risen from 5 per cent since the slump started in 2010 and surpassed the 6.9 per cent recorded in the wake of the GFC for the last two years.

‘‘It’s reflective of the fact that vendors haven’t yet adjusted to the changed conditions in the Melbourne market,’’ said Cameron Cusher.

‘‘People probably still have that expectation that they can get a higher price than a what their neighbour sold for six months ago. But the reality is that has simply not been the case.’’

Melbourne posted one of the steepest discounting rates among the eight capital cities in January, topped only by Brisbane (-8.3 per cent) and Hobart (-9.4 per cent).

Sydney, Brisbane, Adelaide, Perth and Darwin saw discounting decline this year. In Sydney, the level of discounting fell from more than 6 per cent to 5.4 per cent.

12:26pm: Here’s an interesting first person piece from The Daily Beast on US college graduates:

“Too many college kids are living in Mom’s basement, or working at Starbucks. Like most personal finance columnists, I get the letters from them: what do I do? How do I fix this? For many, the answer is grad school. But I get the letters from grad students too. A while back, I found myself talking to a professor whose school has a number of impressive-sounding graduate programs that were originally conceived as add-ons for a professional degree in law or medicine or business. They are now attracting a number of students who just go for the standalone degree. He didn’t understand what the career path was for these kids, and he wasn’t sure that they did either. “

Click here for the full story.

12:14pm: South Korea’s Kia Motors is worried about the sharp decline in the value of the yen, which is aiding Japanese rivals, an executive at the affiliate of Hyundai Motor said.

The South Korean won has risen 4 per cent versus the yen this year after a 23 per cent jump last year, further reducing the currency advantage that benefited South Korean automakers since the global financial crisis.

“The yen is the biggest threat to us, so we are closely monitoring the yen’s moves,” Lee Soon-nam, Kia’s overseas marketing head, told reporters on the sidelines of Seoul Motor Show that kicks off on Thursday.

He said Japanese automakers have been giving far more incentives than Kia in the key U.S. market since late last year.

11:58am:Job vacancies in Australia fell sharply in the three months to February as positions in the private sector fell to the lowest in over three years, government data showed on Thursday.

The Australian Bureau of Statistics reported total job vacancies fell 10.3 per cent to 149,800 in seasonally adjusted terms in the three months to end February. That left vacancies down 18 per cent on the same period of 2011.

The government’s labour data show employment rose by 83,600 over the three months to February.

Vacancies in the private sector slid 10.2 per cent in the quarter to 138,700, the lowest reading since late 2009. That left them down 16 per cent on the year.

Job vacancies in the public sector extended their long decline with a drop of 8.3 percent to 11,100, the lowest since 1998. Vacancies were down almost 34 percent on a year earlier as Federal and state governments pushed through spending cuts as part of tough fiscal plans.

11:56am: Apologies for the oversight earlier: Iron ore rose slightly overnight to $US137.40.

11:37am: Victorian pride has been salvaged. Latest brewing industry figures show that VB has regained its crown as Australia’s biggest selling beer, knocking off Queensland interloper XXXX Gold which took the No.1 position in May last year after decades of dominance by VB.

Latest Nielsen figures show that VB has a 12.2 per cent market share of the off-premise beer market against 11.9 per cent for XXXX Gold.

VB overtook XXXX Gold some time between December and February as the nation’s most popular beer and follows from the beer’s relaunch late last year under new owner SABMiller which saw VB’s alcohol content put back to 4.9 per cent from 4.6 per cent and a new advertising campaign.

11:22am:The $1.5 trillion superannuation industry has questioned Treasury’s estimates that super concessions cost the budget $32 billion in revenue foregone a year, writes BusinessDay‘s Madeleine Heffernan.

The comments come amid speculation the federal government will increase taxes on the super of high-income earners at the May budget, although industry sources say doing so could be an administrative nightmare.

The government has been considering boosting the tax on the super fund earnings of high earners from 15 per cent to 30 per cent. The change would net between $500 million and $1 billion a year.

An alternative proposal – boosting the earnings tax on all super accounts from 15 per cent to 20 per cent – may raise $4 billion a year, and much more over time as fund balances climb.

Treasury calculations suggest that unchecked, the total cost of the super concessions is set to explode from $32 billion per year in 2012-13 to $45 billion by 2015-16, the end of the next parliamentary term. By then it would exceed the projected cost of providing the aged pension.

But Pauline Vamos, chief executive officer of the Association of Superannuation Funds of Australia, has disputed Treasury’s estimates on the effect of tax concessions.

‘‘When you look at the cost saving on the age pension, at the moment it’s $7 billion dollars. In the future, by 2037, it’s going to be $55 billion,’’ Ms Vamos said.

11:10am: The hotel industry is hopeful an increase in occupancy rates in 2012 is a sign consumer confidence is lifting, writes BusinessDay’s Georgia Wilkins.

Australian Bureau of Statistics data out yesterday showed occupancy rates had lifted to 65.8 per cent on average for the year, up slightly from 65.3 in 2011.

Lobby group the Accommodation Association of Australia said it was an indication things were slowly improving for the industry year on year.

“It’s a positive outcome for the industry and one which has the potential to increase investment confidence levels,’’ chief executive Richard Munro said.

“[It’s] is another small step for the accommodation industry on the road to recovery from the global financial crisis.’’

The data looks at the fullness of hotels, motels and serviced apartments with 15 rooms or more.

On a quarterly basis, the rates fell slightly – from 65.7 per cent in September to 65.5 per cent in December.

“The ABS statistics also reflect a slight lift in the level of consumer confidence, which has been lagging in recent years,’’ Mr Munro said.

10:57am:Deutsche Bank AG has lost a bid to end a shareholder lawsuit accusing it of misrepresenting the risk of packaging home loans into complex financial products.

US District Judge Katherine Forrest in Manhattan denied a motion by the German bank to dismiss the lawsuit, which seeks class action status on behalf of investors accusing Deutsche Bank of scheming to maximize profits at their expense.

“Plaintiffs have certainly set forth sufficient plausible allegations to support a claim for a fraudulent scheme against Deutsche Bank,” Forrest wrote.

Duncan King, a Deutsche Bank spokesman, said the bank will continue to defend vigorously against the lawsuit.

The 2011 lawsuit accused Deutsche Bank of issuing false and misleading statements about its health preceding and during the global financial crisis.

10:47am:Fruit and vegie prices fell in March, but the savings were eaten up by increases in the cost of fuel, alcohol and tobacco.

The TD Securities Melbourne Institute Monthly Inflation Gauge increased by 0.2 per cent in March for a 2.1 per cent annual pace, which followed a flat monthly result in February.

It was the lowest annual inflation outcome for eight months, renewing expectations of another official interest rate cut by June.

Consumer prices rose slightly in the month as increases in the cost of alcohol, tobacco, clothing and footwear were offset by falls in fruit and vegetables, household appliances and audio, visual and computing equipment.

Fruit and vegetable prices fell by 1.4 per cent in March while the price of automotive fuel rose by 0.5 per cent.

TD Securities Head of Asia-Pacific Research Annette Beacher expects forecasts for the March quarter consumer price index to increase by 0.5 per cent in the quarter to be 2.6 per cent higher than a year ago.

10:37am: Among big retailers:

Woolworths: -1.2%

Wesfarmers: -0.4%

Harvey Norman: -1.1%

David Jones: flat

Westfield: -0.8%

10:35am: Among miners:

BHP: +0.3%

Rio: +0.9%

Fortescue: +1.5%

10:33am: Among the big banks:

ANZ: -0.7%

CBA: -0.8%

NAB: -1.1%

Westpac: -0.8%

10:26am: For those of you wondering why Nufarm has plunged, yesterday, after the share market closed, Nufarm released its financial results for the first six months of its fiscal year.

Nufarm’s net profit for the six months to January 31 fell 53.5 per cent to $8.4 million, and the company slashed its outlook.

Hot, dry conditions in Australia had reduced demand for crop protection products, and Nufarm was also hurt by foreign exchange losses.

Nufarm managing director Doug Rathbone said that agricultural companies were always exposed to the weather, but seasonal conditions in Australia were exceptionally bad.

10:20am: And the worst performers:

Nufarm: -13.6%

Aurora Oil and Gas: -6.2%

Pacific Brands: -3.9%

Whitehaven Coal: -2.6%

Paladin Energy: -2.5%

10:19am: In the early going, here are the best performers:

Sirtex Medical: +3.9%

PanAust: +2.9%

Alacer Gold: +2.6

James Hardie: +2.1%

APA Group: +2.1%

10:15am:Australia is scrapping the panel that sets interbank lending rates after the proposal of new international guidelines and an exodus of the banks that set the rate in the wake of the Libor rate-rigging scandal.

The Australian Financial Markets Association (AFMA), which administers Australia’s bank bill swap (BBSW) reference rate, said it would bypass the panel and derive the rates directly from brokers and electronic markets.

“An advantage of this enhancement is that it will remove the need for a BBSW Panel, which will eliminate the associated compliance and ancillary costs which otherwise exist for panellist banks,” the AFMA said in a statement issued late on Wednesday.

“This change is subject to technical requirements being satisfied, but it is hoped that this solution will be achievable within a period of months.”

Banks around the world are reviewing their involvement in interest-rate setting panels after regulators dished out billions of dollars in fines to banks, including Barclays , UBS and Royal Bank of Scotland, for manipulating the London Interbank Offered Rate, known as Libor.

10:11am: It looks as though stocks are following Wall Street’s lead. The benchmark SP/ASX200 is down 16.7 points, or 0.3 per cent, to 4978.3, while the broader All Ords has fallen 16 points, or 0.3 per cent to 4991.

10:08am:Lehman Brothers Holdings said overnight it plans to distribute about $US14.2 billion ($13.61 billion) to creditors early next month, as the company winds down following its emergence from bankruptcy protection last year.

The distribution, to be made April 4, will be Lehman’s third since it emerged from Chapter 11 protection on March 6, 2012.

Lehman said the payout will increase total distributions to about $US47.2 billion, with two-thirds going to third parties.

The company has said it hopes to distribute more than $US65 billion, on average about 21 cents on the dollar for allowed claims.

April’s payout will include $US9.4 billion to third-party creditors and affiliates, $US4.4 billion to other Lehman debtors and affiliates, and $US370 million for claims deemed valid since the second distribution on Oct. 1.

Click here for the full story.

9:58am: Construction giant Leighton will offload 70 per cent its phone and internet assets to a Canadian pension fund.

The deal between Leighton and the Ontario Teachers’ Pension Plan covers the Nextgen Networks, Metronode and Infoplex businesses, which Leighton valued at $885 million.

The two parties would place the assets in a joint-venture.

9:50am:Cyprus reopens its banks on Thursday while limiting withdrawals, banning cheques and curbing the use of Cypriot credit cards abroad, among measures imposed to avert a bank run after it agreed a tough rescue deal with international lenders.

The Central Bank said banks would open their doors at midday (1000 GMT) on Thursday after nearly two weeks when Cypriots could only get cash through limited ATM withdrawals.

A central bank official said Cypriots would be allowed to withdraw no more than 300 euros ($367) a day.

Yiangos Demetriou, head of internal audit at the Central Bank, said on state television that the controls would allow unlimited use of credit cards within Cyprus, but set a limit of 5,000 euros per month abroad. He said the measures would last four days but could be reviewed.

Click here for the full story.

9:44am: Looking overseas, US stocks rebounded from early declines to close little changed, but investors were still worried about the chance of a run on Cypriot banks and its possible implications for other euro-zone lenders.

The SP 500 fell 0.8 per cent in morning trading, but in line with recent market behavior, investors took the drop as a buying opportunity. By the close, late buying had helped the SP 500 cut most of the session’s losses to end down less than a point.

The benchmark SP 500 has traded within 10 points of its record closing high for 13 consecutive days, without once moving above the 1,565.15 level set October 9, 2007. It is on track to post its fifth consecutive month of gains.

“Any time you have a run like we’ve had, market participants will look for a reason to take profits,” said Bruce Zaro, chief technical strategist at Delta Global Asset Management in Boston.

“But pauses in this uptrend have been short and shallow. Everybody seems to want to buy in the slightest pullback.”

ASIC Disbeliever, what do you mean 1 in 10unit sales? Thanks.

Commenter
ML123

Location

Date and time

March 28, 2013, 3:29PM
- 1 to 10, ie very low numbers
  
  Commenter
  ASIC disbeleiver
  
  Location
  
  Melb
  
  Date and time
  
  March 28, 2013, 4:00PM

‘Rising housing prices are needed to kick-start a rise in housing construction, which is a necessary part of the rebalancing of growth that Australia needs, after mining investment peaks later this year,’’ Mr Bloxham said.

Let’s see now, Ohhhh yes, that is right. We need higher house prices as a basis for growth creation, now when the mining boom is coming to an end. Hello where are all smart people? The house of cards is now ready to collapse, and we need a growth industry to take over, for example manufacturing, services, high tech etc. not an inflated ponzi scheme.

Commenter
Viking

Location

Sydney

Date and time

March 28, 2013, 2:50PM
- I’d prefer export led recovery to housing led recovery.
  
  Commenter
  Opinion Only
  
  Location
  
  Melbourne
  
  Date and time
  
  March 28, 2013, 3:14PM
- The Krugman solution, re-inflate the bubble that burst to fix the problem….
  
  Commenter
  Bye Bye Fiat Money
  
  Location
  
  Date and time
  
  March 28, 2013, 3:20PM

I don’t get it? Cyprus has a population of 1.3 million (about 4 times the size of Geelong). 30% of its banks funds come from wealthy overseas investors yet this happy little tax haven can spook the world.

Commenter
Big Al

Location

Monty

Date and time

March 28, 2013, 2:36PM

NCM, what happened?? NCM is down more than 5 %.

Commenter
wil

Location

Melb

Date and time

March 28, 2013, 2:29PM
- Report out 2.30pm – Lihir mine production down
  
  Commenter
  ML123
  
  Location
  
  Date and time
  
  March 28, 2013, 3:25PM
- May be oversell????
  
  Commenter
  ML123
  
  Location
  
  Date and time
  
  March 28, 2013, 3:26PM

Shares in Linc Energy fell more than 12 per cent after the company announced it has raised $200 million through a convertible bond issue.

Borrowing money to pay debt – common practice but risky if the music stops and your the one left without the chair. Good cash flow or expectation of good cash flow required – niether of which LNC has.

Commenter
Jiggery Pokery

Location

Melb

Date and time

March 28, 2013, 1:38PM
- They seem to be on a good thing in coober pedy though..yes?
  
  Commenter
  alfa75
  
  Location
  
  Date and time
  
  March 28, 2013, 2:40PM

“Melbourne home owners are being forced cut the asking prices of their properties at a steeper rate than even during the global financial crisis, highlighting the continued softness of the city’s housing market.”

So it appears that Steve Keen might be right after all! Did not Mr Koukolous state just yesterday that his prediction for residential property was a rise of at least 10% this year?

Commenter
Viking

Location

Sydney

Date and time

March 28, 2013, 1:19PM

Total job vacancies down 10.3%. Hello RBA.

Commenter
Staz

Location

Date and time

March 28, 2013, 12:45PM
- Hello labor lovers! when the next and hopefully real unemployent figures come out (after 71,000 new jobs turned out to be very false) that is the final nail in your coffin.
  
  Commenter
  Genghis
  
  Location
  
  Lounge
  
  Date and time
  
  March 28, 2013, 1:48PM

wow, red across the board. Mum and dad investors didn’t even get a chance to put money on the board as they normally do yet the bubble is already popping! The ASX is a joke

Commenter
panda

Location

perth

Date and time

March 28, 2013, 12:43PM

Why is Westfarmers off 59 and Woolworths 48 unrelated to anything to do with CYPRUS and the Euro. Both strong monopoly traders and we all have to eat seems they are cheap right now.

Commenter
Missing

Location

Syd

Date and time

March 28, 2013, 12:16PM
- Its not hard, the big money players force the price down using rapid 1 to 10 unit sales (have a look at the course of sales) then they buy back in when their preferred low price is reached. Makes it hard for the small trader but reading the ploy means that one can piggy back on it and make money, providing your not caught holding when the big boys start driving it down.
  
  Commenter
  ASIC disbeleiver
  
  Location
  
  Melb
  
  Date and time
  
  March 28, 2013, 1:36PM
- p.s The big boys also have the advantage of having pet brokers who can trade off market and catch the market cold, it is one of the reasons why a stock will suddenly open 1% higher the next day with no chance of any normal hour trader catching it. you have to take your chances and buy at 3:58 pm the night before.
  
  Commenter
  ASIC disbeleiver
  
  Location
  
  Melb
  
  Date and time
  
  March 28, 2013, 1:42PM

@Life Is Good – CBA reached $70.95 intraday on 12 March.

Commenter
El Toro

Location

Barcelona

Date and time

March 28, 2013, 12:13PM
- thanks, someone has a very short memory. only happened two weeks ago.
  
  Commenter
  wil
  
  Location
  
  melb
  
  Date and time
  
  March 28, 2013, 12:32PM
- Last time I checked, 70.95 71 and the VWOP for the day was much lower. Good get if you sold at the very top of the market on a volatile day.
  
  But then all the shorters on this forum seem to be able to do that
  
  Commenter
  Life Is Good
  
  Location
  
  The Real World
  
  Date and time
  
  March 28, 2013, 12:35PM
- Well, if you looked CBA chart, you would know it run from 64 then broken 68, then you know the target could be 72. It did not reach 72, but 70.95, then you buy June put, the risk is it might go to 72, but the probability to go down to 68 initially is lot higher. So u buy put with a stop loss.
  Many people do this, not complex at all.
  
  Commenter
  wil
  
  Location
  
  melb
  
  Date and time
  
  March 28, 2013, 1:13PM

11:10 am occupancy rates

The occupancy rates look good but there is that short stay catching on in all those oversupplied apartments which might hurt them a bit going forward.

Commenter
Opinion Only

Location

Melbourne

Date and time

March 28, 2013, 11:52AM

$1.5 trillion superannuation industry

Gillard has reduced the tax free super threshold down to $25000, which is nothing after deducting compulsory super. And now they want to target anyone with more than $500,000, which is also nothing when looking at 25 years of retirement coupled with inflation whittling it down over time.

The threshold should be increased to $50,000 for anyone with less than $750,000 super and scaled down to $25000 at $1 million and zero at $1,250,000.

Commenter
RM Northern Beaches

Location

Date and time

March 28, 2013, 11:51AM
- A simpler solution would be to simply restrict everyone to a single lifetime amount to be put into Super, say $1m each. You can put it in at age 18 or age 65 but no more. Any amounts above that should be taxed returned to the investor and taxed accordingly.
  
  Commenter
  Life Is Good
  
  Location
  
  The Real World
  
  Date and time
  
  March 28, 2013, 12:23PM
- I hope the Govt gives a firm commitment on what they intend to do about tax on Super. After contributing for over 40 years and now retired, we want to know what will be the threshold for increased tax so that I can restructure our Super.
  After all the time and energy we have spent getting our Super to the point where we can have a comfortable retirement without Govt assistance, we do not want to find we are again penalised for being frugal/careful all our lives.
  
  No matter who is in power, they will try to gouge whatever they can. Do they realise that by changing the rules every six months they undermine the confidence of many ordinary people?
  
  Unfortunately I am not smart enough to figure out the future costs of the pension for the baby boomers from now to when they begin to die off (in large numbers) over the next 30 years vs the cost of taking a larger tax slice from Super.
  
  Commenter
  Retd1
  
  Location
  
  Date and time
  
  March 28, 2013, 12:23PM
- Good sensible idea. It really makes it hard for women who have been out of the workforce raising kids. I have little super and have no hope now of building it up. Thanks Julia.
  
  Commenter
  jb
  
  Location
  
  melb
  
  Date and time
  
  March 28, 2013, 12:53PM
- Life is Good – cannot understandf the logic of limit of $1m per person. If you put in $1m at 18, an avg return of 6% would give you over $11m (with tax of 15% each year).
  
  If you put in $1m at 65 you would have $1.06m, and in 50 years $1m would be worth in today’s dollars?
  
  Commenter
  Retd1
  
  Location
  
  Date and time
  
  March 28, 2013, 1:25PM
- This is only the beginning of this government getting their hands on everyones super, they may start with the wealthy first, and this may help us pay off up to 45 billion from our soon to be 300 billion debt, then what ?? this government wants to hit the soon to be retired to keep happy the younger voters. Only thing is, and hopefully i am speaking for many, one way to lose voters is to upset their voters parents.
  
  Commenter
  Genghis
  
  Location
  
  Lounge
  
  Date and time
  
  March 28, 2013, 1:59PM
- @ jb Locationmelb
  Yeah well said jb that’s right, women like you recently back from raising children along with mortgage re-payers usually just finish with those commitments in their fifties, find this unfair.
  Then they find they have minimal super saved up but can no longer catch up with the Gillard $25000 super tax limit restriction.
  The government benefits by having more retirees self-funded and off the pension, so surely at least those over 50 with less than $750,000 super should be allowed a meaningful $50,000 super tax free threshold, so they can catch up.
  To offset this somewhat, gradually scale the benefit down to zero between $750,000 and $1,250,000 already in super ($1000 less tax free threshold for every $10,000 over $750,000. (Examples:$50,000 for below $750,000, $40,000 at $850000, $30,000 at $950,000, $20,000 at $1,050,000, $10,000 at $1,150,000 down to zero at $1,250,000).
  Those with many millions (like to pollies) or multi-millions in super don’t need further help.
  
  Commenter
  RM Northern Beaches
  
  Location
  
  Date and time
  
  March 28, 2013, 2:04PM

- If you are on the northern beaches it would be better if you devoted your time to educating the many business owners around you that rort director fees and don’t know the difference between tax minimisation and tax evasion.
  
  Commenter
  Opinion Only
  
  Location
  
  Melbourne
  
  Date and time
  
  March 28, 2013, 2:58PM
- Dunno about super, but for most sub baby boomers, super is the least of our worries. The 3 or so generations following mainly have to worry about paying off the debt bubble in the residential realestate market those boomers have built up. About 1 trillion or so.
  
  Commenter
  J.
  
  Location
  
  Syd.
  
  Date and time
  
  March 28, 2013, 3:49PM

Who the heck is drinking VB (or XXXX for that matter), and more importantly, why ? Bah traders are infiltrating every commodity available. Maybe there is a good market for this “beer” in the UK atm

Commenter
The Not-So-Magic Roundabout

Location

Date and time

March 28, 2013, 11:50AM

11:37 am VB or go for variety?

George Thorogood – ‘One bourbon, one scotch, one beer’

Commenter
Opinion Only

Location

Melbourne

Date and time

March 28, 2013, 11:50AM

no iron ore price on the ‘need to know’ or ‘markets live’ blog today?

do we just assume no movement?

EDS: Sorry, human error. We have posted the price to the blog now.

Commenter
A Bodhi Nuisance

Location

Date and time

March 28, 2013, 11:48AM
- thanks, much appreciated
  
  Commenter
  A Bodhi Nuisance
  
  Location
  
  Date and time
  
  March 28, 2013, 12:53PM

Looks like a great time to buy the Banks. Three of the four are reporting next month so you will be able to get three dividends in 13 months which represents 8.5% + Franking credits giving a return of over 10% over 13 months. Term Deposit falls due on Tuesday.

Commenter
Banks

Location

Sydney

Date and time

March 28, 2013, 11:43AM
- yep banks and tls look good.
  
  Commenter
  alfa75
  
  Location
  
  Date and time
  
  March 28, 2013, 12:22PM
- I cannot get excited about banks, with long weekend and issues in Europe. From chart point of view, I like BHP and RIO, short term buy, I bought BHP call yesterday, hope it hits 34ish soon, then I sell and take profit.
  All ords will head to 4850 first I think, then lower if the big boys in US take some profit from their all-time high.
  
  Commenter
  wil
  
  Location
  
  melb
  
  Date and time
  
  March 28, 2013, 12:49PM

Looks like we are in for a quiet an uneventful day…so where do we all think we will finish today…I am thinking we will meander along at 4975 for most of the day and finish at 4960.

Commenter
New Chum

Location

Date and time

March 28, 2013, 11:12AM

Iceland showed how to deal with a banking crisis a few years ago – let all the banks who brough it on go to hell and let the debts thereby be wiped out.and giving up on their fantasies of being an international finance centre. But that would mean Cyprus quitting the Euro and going back to its own currency and accpepting they are basically a tourist resort and a future gas producer.

Commenter
Tim

Location

Date and time

March 28, 2013, 10:47AM
- Tim – you are so right. And the USA should have done the same as Iceland in 2008.
  
  Interestingly enough even Indonesia did allow a lot of banks to go under after the Asian Financial Crisis of the late 1990′s.
  
  Hopefully the world – the media – will get over this Iceland blip in the next few days after they have reported on the aftermath of the re=opening of the Cypriot banks tonight.
  
  Commenter
  Tony L
  
  Location
  
  Melb
  
  Date and time
  
  March 28, 2013, 11:58AM

Resourses up (BHP, RIO and FMG), Banks are down.
Go BHP, i bought call yesterday.
How much will CBA and NAB go down? CBA 66? Nab 29? (i mean first target)
I make my position clear, i short CBA when it reached 71.

Commenter
Wil

Location

Melb

Date and time

March 28, 2013, 10:44AM
- NAB will go to 32+ next week once this cyprus stuff blows over.
  
  Commenter
  alfa75
  
  Location
  
  Date and time
  
  March 28, 2013, 10:49AM
- What day did CBA reach 71?
  
  Commenter
  Life Is Good
  
  Location
  
  THe Real World
  
  Date and time
  
  March 28, 2013, 11:15AM

- I’m not sure that the Cyprus problems wil simply blow over. One of the reasons the Fed’s in America are propping up banks is their exposure in the derivatives market which is estimated at over US$600 trillion. If a bank falls over, who knows what derivative exposure they may have at that point????
  
  Commenter
  Money Man
  
  Location
  
  Date and time
  
  March 28, 2013, 11:21AM
- on 12/3/13, only 15 days ago,. CBA hit 70.95, it that not 71 in your book?
  I am still hold my put, might offload half today.
  
  Commenter
  wil
  
  Location
  
  melb
  
  Date and time
  
  March 28, 2013, 12:31PM

well for a starter the AGE can’t spell losses (or was it losers). But given that the three US indices averaged a 0.06% decrease, you really do have to start to wonder whether the press is trying to push the direction of the market to suit its own nefarious desires.

Commenter
colin

Location

melbourne

Date and time

March 28, 2013, 10:29AM

more weak holder’s running scared this morning!!

Commenter
alfa75

Location

Date and time

March 28, 2013, 10:25AM

Cyprus. Unlimited use of credit but limited use of cash. Hmmmmm, they obvioulsy down want people to have the capacity to pay off their debt, and in fact are encouraging people to make it bigger. What does this say about fiscal policy in Cyprus – little intention of bringing it under control.

Commenter
Thinking of trading overseas.

Location

Melb

Date and time

March 28, 2013, 10:00AM
- Those Cypriots at face value are very rich. Bank deposit balances apparently equate to 80mill. euros per citizen. Pity is that its all owned by the ruskies etc using the Cypriot banks as tax havens. It has then been lent to the Greeks etc. making “return of investment” difficult
  
  Commenter
  batty
  
  Location
  
  brissie
  
  Date and time
  
  March 28, 2013, 10:51AM
- Batty… You cannot blame the ruskies …. In the end they kinda shopping around for better returns…No different then here and anywhere else. I bet you don’t buy your groceries at the most expensive shop! Hihih!
  
  Commenter
  Romaniac
  
  Location
  
  Date and time
  
  March 28, 2013, 11:13AM
- If your numbers are correct, 80M per citizen, then Basle and the regulators have not been doing their jobs.
  On the subject of regulators its a pity that those regulating our stock exchange are also not doing their jobs.
  
  Commenter
  Thinking of trading overseas.
  
  Location
  
  Melb
  
  Date and time
  
  March 28, 2013, 11:22AM
- All they really have to do is levy each depositor for the last three year’s interest which was earned on their individual deposit accounts. And make them transfer the money into a specific account. Then its no different to a PAYE installment, or Kennets state debt levy or any of the other levies This idea that it is somehow “theft” is just popularist BS
  
  Commenter
  colin
  
  Location
  
  melbourne
  
  Date and time
  
  March 28, 2013, 12:47PM