George Beyrouthi’s editorial: 12/09/2014 IRON ORE – was our savior. Is it still (part 5)? Yesterday I wrote: … BHP Billiton and Rio Tinto produce several commodities, but both rely on iron ore for half their earnings and the iron ore divisions of both are also tipped to suffer a slide in earnings over the next three years. The outlook is better for Rio, the top supplier after Vale, plans to boost output to more than 330 million tonnes in 2015 after an 11 per cent advance to 295 million tonnes this year to compensate losses from the declining price of iron ore. The federal government's commodities forecaster, the Bureau of Resources and Energy Economics, in a recent outlook paper on the sector, said the volume of iron ore exports had risen by about 21 per cent in 2013-14 from the year before, while the value of iron ore exports rose by 30 per cent. But in the 2015 financial year, the forecaster expects a 12 per cent rise in export volumes to provide just a 3.1 per cent rise in export value. The trade-off for investors of a low iron ore price is the fall in capital spending, particularly at BC Iron, Atlas Iron and Fortescue. Although, there is a good news. BC Iron is particularly known for its strong dividends, while all other iron ore miners have also hinted at better dividends in the near future (www.smh.com.au/business/iron-ore-price-dip-to-hit-miners-earnings-20140727-3cnts.html). Please see our disclaimer on back page.
Transcript
George Beyrouthi’s editorial: 12/09/2014
IRON ORE – was our savior. Is it still (part 5)? Yesterday I wrote: … BHP Billiton and Rio Tinto produce several commodities, but both rely on iron ore for half their earnings and the iron ore divisions of both are also tipped to suffer a slide in earnings over the next three years.
The outlook is better for Rio, the top supplier after Vale, plans to boost output to more than 330 million tonnes in 2015 after an 11 per cent advance to 295 million tonnes this year to compensate losses from the declining price of iron ore. The federal government's commodities forecaster, the Bureau of Resources and Energy Economics, in a recent outlook paper on the sector, said the volume of iron ore exports had risen by about 21 per cent in 2013-14 from the year before, while the value of iron ore exports rose by 30 per cent. But in the 2015 financial year, the forecaster expects a 12 per cent rise in export volumes to provide just a 3.1 per cent rise in export value. The trade-off for investors of a low iron ore price is the fall in capital spending, particularly at BC Iron, Atlas Iron and Fortescue. Although, there is a good news. BC Iron is particularly known for its strong dividends, while all other iron ore miners have also hinted at better dividends in the near future (www.smh.com.au/business/iron-ore-price-dip-to-hit-miners-earnings-20140727-3cnts.html).
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Our predictions? What I predicted (at end January 2014):
- XJO (ASX 200) has about 200 points further to
go (up) in January the XJO was 5190
Next 3 months (at end May 2014) - XJO (ASX 200) Resistance around 5600 (+100),
Support around 5100 (-300)
- Gold to trade between 1250 and 1350 US/Oz (no
change from prediction in Jan 2014)
- The Australian dollar to remain weak and hover
around the 88 to 93 US cents (no change)
Next 3 months (at end July 2014)
- XJO (ASX 200) Resistance around 5750 (+100),
Support around 5350 (-300)
- Gold to trade between 1250 and 1350 US/Oz
- The Australian dollar to remain 88 to 95 US cents
Offshore Markets & Businesses Overnight and from around the globe we start with Wall Street with the broader S&P 500 ended slightly higher but the Dow Jones Industrial average was down. The Dow Jones Industrial Average index fell 0.1% or 20 points and finished at 17,049. The S&P 500 ended higher by 2 points or and finished at 1,997. The Nasdaq the technology index was up 0.1%.
European major markets was lower by 0.2% at 3237. In London, the FT100 also down 0.45% at 6780. In Japan, the Nikkei was up 0.76% at 15,909. In China, the Shanghai index was down 0.37% at 2423. On the commodities; Gold a short time ago was trading at $1240 US/Oz down $8 overnight. Silver, closed this morning at $18.70 down 1.1% or 28 cents. Crude Oil this morning was at 93.12 US/barrel up $1.50 from this time yesterday. Copper, the world’s economic barometer was at 309.50 c/lb down 0.5% overnight Iron ore, which is important for our miners such as BHP, RIO, Atlas Iron and Fortescue, was down another 0.4% at $81.90 US /tonne. On the currencies, the Australian dollars will give you 91 US cents, 97.56 Japanese yen, 70.37 Euro cents and 56.05 British pence. These are intro banks rates On our market yesterday, The benchmark ASX 200 Index dropped 0.5% to 5546. The market fell despite strong jobs data, as weaker than forecast Chinese inflation added to jitters about the tumbling value of Australia’s biggest export, iron ore. The best performers amongst the leaders yesterday: BXB MQG up by 1.3%. The worst performers: NCM down by 2% followed by CBA and WOW down by 1%. On the economic news that can affect our market and those overseas: Australia: lending finance, Karoon Gas FY results, Warehouse Group FY results; China industrial production, retail sales; Eurozone industrial production, employment data; Japan industrial production; New Zealand business PMI; US retail sales, UoM consumer confidence. Local stocks are poised to open flat as global conflicts, and wariness about US interest rate policy, put investors on the defensive. The SPI futures contract was up 2 points a short time ago indicating a flat start this morning. Yahoo, Bloomberg, SMH, ninemsn and AFR
Global announcements Updated on Friday, September 12, 2014
The full report has now shifted to Our Trades and Our Picks Report for subscribers!!!
FS Securities Picks On 10/09/2014 (updated):
James Hardie Industries (JHX) $12.90 On 08/09/2014 (new): Retail Food Group Limited (RFG) $4.95 On 04/09/2014 (new): Australian Pharmaceutical Industries Limited (API) $0.70 On 03/09/2014 (updated): Flight Centre Travel Group Limited (FLT) $47.74- reported NPAT up 9.8% to $263.6m, revenues from ordinary activities were $2.2bn, up 12.6% On 27/08/2014 (updated):
AWE Limited (AWE) $1.77
On 26/08/2014 (updated):
Western Areas Limited (WSA) $ 4.72 On 18/08/2014 (updated): Oil Search Limited (OSH) $9.44 - Net profit up 34% to US$152.5 million On 13/08/2014 (new): Domino's Pizza Enterprises Limited (DMP) $23.78 – DMP announced a full-year net profit after tax result of $45.8 million, a 50.4 per cent rise on the prior year On 01/08/2014 (updated):
Kathmandu Holdings Limited (KMD) $3.12 - colder weather in July will help the company recover a significant portion of the shortfall in sales revenue On 31/07/2014 (new): APA Group (APA) $7.48- APA will develop a new pipeline in the Goldfields region of Western Australia On 24/07/2014 (new):
Macquarie Group Limited (MQG) $60.00 - the bank’s 2015 financial year result will be in line with last year’s annual net profit of $1.27 billion. On 22/04/2014 (updated on 26/05/2014): CSR Limited (CSR) $3.40
FS Securities Trades On 02/09/2014: Rio Tinto limited (RIO) $62.60 – Iron Condor strategy On 01/09/2014: Commonwealth Bank of Australia (CBA) $81.22 – Iron Condor strategy On 28/08/2014: Macquarie Group Limited (MQG) $58.00 – Iron Condor strategy On 25/08/2014: S&P/ASX 200: INDEX (XJO) $5,630 – Iron Condor strategy On 20/08/2014: CSL Limited (CSL) $74.40 – Iron Condor strategy –UPDATED – rolled over to the next month
Note: the following picks are not necessarily trades that FS Securities are currently trading. They are offered as suggestions only. Please check with your broker first before trading.
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Indices and Commodities
GOLD: Gold futures fell to the lowest since January on
speculation that the Federal Reserve will raise U.S. interest rates sooner than forecast, crimping demand for a hedge against inflation. Gold has dropped 11 percent from this year’s high after the U.S. economy gained traction and the dollar strengthened, cutting demand for the metal as an alternative asset. Demand for a haven declined after tensions in Ukraine and the Middle East eased. Global ETP holdings fell in four of the past five months. Gold futures for December delivery fell 0.5 percent to settle at $1,239 an ounce at 1:38 p.m. on the Comex in New York. Earlier, the price touched $1,235.30, the lowest for a most-active contract since Jan. 23.
(Source: Bloomberg and CNBC)
SILVER: Silver futures for December delivery dropped 1.7
percent to $18.599 an ounce. The price touched $18.57, the lowest since June 28, 2013..
(Source: Bloomberg.com)
CRUDE OIL: West Texas Intermediate crude rebounded from an eight-month low as tension escalated between Russia and the West. Brent was little changed. WTI for October delivery rose $1.16, or 1.3 percent, to settle at $92.83 a barrel on the New York Mercantile Exchange. The volume of all futures was 79 percent above the 100-day average. The contract closed at $91.67 yesterday, the lowest since Jan. 9. Brent for October settlement rose 4 cents to $98.08 a barrel on the London-based ICE Futures Europe exchange after earlier sliding as far as $96.72, the lowest since July 2, 2012. Volume was 38 percent above the 100-day average. Brent closed at a premium of $5.25 to WTI.
(Source: bloomberg.com and Yahoo.com) *Disclaimer: The information in the Market Commentaries was obtained from sources believed to be reliable, but we do not guarantee its accuracy. Neither the information nor any opinion expressed therein constitutes a solicitation of the purchase or sale of any futures or options contracts.
Analysts rating changes: Stocks to watch (source SMH) Karoon Gas FY results, Warehouse Group FY results. CIMB initiated coverage on Healthscope with an “add” rating and a $2.75 target price, saying: “We view Healthscope as a core holding." Credit Suisse has cut Australian Pharmaceutical Industries to “neutral” from “outperform” and has shifted its target price on the stock to 69¢ a share from 73¢ a share. The following stocks will trade ex dividend today: Australian Ethical Investment, Calliden Group, Cash Converters, Data#3, GR Engineering, Independence Group.
FS Securities recommendations for US market
Commodities and FX
ASX sectors and equities
FS Securities details stock picks
Ask for a copy if you would like to see the list.
ASX weekly market advances and declines Average Advances over total rose over 30 days from 50.5% recently to 51.9% (50.5 / 52 / 51.5 / 48 last 10 weeks)
Gainers and Most Active by volume
NOTES: ASX stocks show the daily changes.
Best and worst performing stocks (source:smh.com) Last
Day before
Day before
Sectors Performance
By looking at the above table readers will notice where the direction of the market has been on the day.
Last from low: Blue = closed in the top half of the day’s range.
Net Change is the daily movement in points.
% Change represents the daily movement in %.aud
WEEK ON WEEK CHANGE (and over two weeks as well)
OVERSEAS INDICES, FX AND COMMODITIES
WEEK ON WEEK CHANGE (and over two weeks as well) AUSSIE MARKET
Mini charts - Commodities and US markets
THE GRAPHS SHOW HOW FROM AN INDEX OF 100 SOME 52 WEEKS AGO THE VARIOUS INDICES OR COMMODITIES HAVE MOVED.
Sectors
THE ABOVE GRAPHS SHOW HOW FROM AN INDEX OF 100 SOME 52 WEEKS AGO THE VARIOUS ASX SECTORS HAVE MOVED.
Major stocks
Upcoming Dividends by date
1 Ex Div Date Symbol Name
Franked %
Current Div
Amount
Div Rate Per
Share Div Yield
% Last Type
2 8/09/2014 ORA ORORA LIMITED 0 0.03 0 0 1.725 Final 3 8/09/2014 IAG INSURANCE AUSTRALIA GROUP LIMITED 100 0.26 0.39 6.019 6.48 Final
4 8/09/2014 RCG RCG CORPORATION LIMITED 100 0.025 0.045 6.977 0.645 Final 5 8/09/2014 RGP REFRESH GROUP LIMITED 100 0.001 0.001 1.613 0.062 Final 6 8/09/2014 CSL CSL LIMITED 0 0.649 1.237 1.685 73.41 Final 7 8/09/2014 AGI AINSWORTH GAME TECHNOLOGY LIMITED 0 0.05 0.1 2.874 3.48 Final 8 8/09/2014 VED VEDA GROUP LIMITED 0 0.04 0.04 1.709 2.34 Final 9 8/09/2014 ARA ARIADNE AUSTRALIA LIMITED 40 0.005 0.01 2.353 0.425 Final
10 8/09/2014 TCN TECHNICHE LIMITED. 0 0.002 0.003 3.678 0.087 Final 11 8/09/2014 CTE CRYOSITE LIMITED 0 0.01 0.015 3.704 0.405 Final 12 8/09/2014 RHC RAMSAY HEALTH CARE LIMITED 100 0.51 0.85 1.623 52.37 Final 13 8/09/2014 SDG SUNLAND GROUP LIMITED 100 0.02 0.04 2.168 1.845 Final 14 8/09/2014 SDM SEDGMAN LIMITED 100 0.02 0.04 6.107 0.655 Final 15 8/09/2014 TOX TOX FREE SOLUTIONS LIMITED 100 0.03 0.06 2.19 2.74 Final 16 9/09/2014 VRL VILLAGE ROADSHOW LIMITED 100 0.14 0.27 3.664 7.37 Final 17 9/09/2014 SDI SDI LIMITED 100 0.005 0.007 1.186 0.59 Final 18 9/09/2014 OZL OZ MINERALS LIMITED 0 0.1 0.2 4.728 4.23 Interim 19 9/09/2014 CKL COLORPAK LIMITED 100 0.018 0.035 5.224 0.67 Final 20 9/09/2014 EPW ERM POWER LIMITED 100 0.06 0.12 6.154 1.95 Final 21 9/09/2014 PPT PERPETUAL LIMITED 100 0.95 1.75 3.55 49.3 Final 22 9/09/2014 PPG PRO-PAC PACKAGING LIMITED 100 0.01 0.02 4.301 0.465 Final 23 9/09/2014 RCR RCR TOMLINSON LIMITED 100 0.07 0.1 2.941 3.4 Final 24 9/09/2014 OSH OIL SEARCH LIMITED 0 TBA 0.044 0.455 9.58 Interim 25 9/09/2014 LCM LOGICAMMS LIMITED 100 0.035 0.055 5.164 1.065 Final 26 9/09/2014 HHL HUNTER HALL INTERNATIONAL LIMITED 98 0.064 0.134 6.381 2.1 Final 27 10/09/2014 HIL HILLS LIMITED 100 0.036 0.07 4.361 1.605 Final 28 10/09/2014 BKL BLACKMORES LIMITED 100 0.83 1.27 3.987 31.85 Final
Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders.[1]
When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business (called retained earnings), or it can be distributed to shareholders. There are two ways to distribute cash to shareholders: share repurchases or dividends.
[2][3] Many corporations retain a portion of their earnings and pay the remainder as a dividend.
2 10/09/2014 NZO NEW ZEALAND OIL & GAS LIMITED 0 TBA 0.05 7.028 0.71 Final 3 8/09/2014 RCG RCG CORPORATION LIMITED 100 0.025 0.045 6.977 0.645 Final 4 9/09/2014 HHL HUNTER HALL INTERNATIONAL LIMITED 98 0.064 0.134 6.381 2.1 Final 5 9/09/2014 EPW ERM POWER LIMITED 100 0.06 0.12 6.154 1.95 Final 6 8/09/2014 SDM SEDGMAN LIMITED 100 0.02 0.04 6.107 0.655 Final 7 8/09/2014 IAG INSURANCE AUSTRALIA GROUP LIMITED 100 0.26 0.39 6.019 6.48 Final 8 10/09/2014 MYS MYSTATE LIMITED 100 0.145 0.285 5.746 4.96 Final 9 10/09/2014 CYA CENTURY AUSTRALIA INVESTMENTS LIMITED 100 0.02 0.05 5.376 0.93 Final
10 9/09/2014 CKL COLORPAK LIMITED 100 0.018 0.035 5.224 0.67 Final 11 10/09/2014 AHE AUTOMOTIVE HOLDINGS GROUP LIMITED 100 0.125 0.21 5.172 4.06 Final 12 9/09/2014 LCM LOGICAMMS LIMITED 100 0.035 0.055 5.164 1.065 Final 13 10/09/2014 SIV SILVER CHEF LIMITED 100 0.16 0.3 4.831 6.21 Final 14 9/09/2014 OZL OZ MINERALS LIMITED 0 0.1 0.2 4.728 4.23 Interim 15 10/09/2014 AIZ AIR NEW ZEALAND LIMITED 0 0.139 0.092 4.645 1.97 Final 16 10/09/2014 TAN TANDOU LIMITED 0 0.01 0.02 4.598 0.435 Interim 17 10/09/2014 TGG TEMPLETON GLOBAL GROWTH FUND LIMITED 100 0.035 0.06 4.478 1.34 Final 18 10/09/2014 TME TRADE ME GROUP LIMITED 0 TBA 0.144 4.426 3.26 Final 19 10/09/2014 HIL HILLS LIMITED 100 0.036 0.07 4.361 1.605 Final 20 10/09/2014 SFH SPECIALTY FASHION GROUP LIMITED 100 0.02 0.04 4.348 0.92 Final 21 9/09/2014 PPG PRO-PAC PACKAGING LIMITED 100 0.01 0.02 4.301 0.465 Final 22 10/09/2014 FXL FLEXIGROUP LIMITED 100 0.085 0.165 4.177 3.95 Final 23 10/09/2014 BKL BLACKMORES LIMITED 100 0.83 1.27 3.987 31.85 Final 24 10/09/2014 WOW WOOLWORTHS LIMITED 100 0.72 1.37 3.773 36.31 Final 25 8/09/2014 CTE CRYOSITE LIMITED 0 0.01 0.015 3.704 0.405 Final 26 8/09/2014 TCN TECHNICHE LIMITED. 0 0.002 0.003 3.678 0.087 Final 27 9/09/2014 VRL VILLAGE ROADSHOW LIMITED 100 0.14 0.27 3.664 7.37 Final 28 10/09/2014 LBL LASERBOND LIMITED 100 0.002 0.004 3.636 0.11 Final
Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders.[1]
When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business (called retained earnings), or it can be distributed to shareholders. There are two ways to distribute cash to shareholders: share repurchases or dividends.
[2][3] Many corporations retain a portion of their earnings and pay the remainder as a dividend.
2 8/09/2014 AGI AINSWORTH GAME TECHNOLOGY LIMITED 0 0.05 0.1 2.874 3.48 Final 3 10/09/2014 AIZ AIR NEW ZEALAND LIMITED 0 0.139 0.092 4.645 1.97 Final 4 8/09/2014 ARA ARIADNE AUSTRALIA LIMITED 40 0.005 0.01 2.353 0.425 Final 5 10/09/2014 AGO ATLAS IRON LIMITED 0 0.02 0.02 3.448 0.58 Final 6 10/09/2014 AHE AUTOMOTIVE HOLDINGS GROUP LIMITED 100 0.125 0.21 5.172 4.06 Final 7 10/09/2014 BKL BLACKMORES LIMITED 100 0.83 1.27 3.987 31.85 Final 8 10/09/2014 BLA BLUE SKY ALTERNATIVE INVESTMENTS LIMITED 100 0.07 0.07 2.373 2.95 Final 9 10/09/2014 BXB BRAMBLES LIMITED 30 0.135 0.27 2.83 9.54 Final
10 10/09/2014 CNI CENTURIA CAPITAL LIMITED 100 0.015 0.028 2.91 0.945 Final 11 10/09/2014 CYA CENTURY AUSTRALIA INVESTMENTS LIMITED 100 0.02 0.05 5.376 0.93 Final 12 9/09/2014 CKL COLORPAK LIMITED 100 0.018 0.035 5.224 0.67 Final 13 8/09/2014 CTE CRYOSITE LIMITED 0 0.01 0.015 3.704 0.405 Final 14 8/09/2014 CSL CSL LIMITED 0 0.649 1.237 1.685 73.41 Final 15 9/09/2014 EPW ERM POWER LIMITED 100 0.06 0.12 6.154 1.95 Final 16 10/09/2014 FXL FLEXIGROUP LIMITED 100 0.085 0.165 4.177 3.95 Final 17 10/09/2014 HIL HILLS LIMITED 100 0.036 0.07 4.361 1.605 Final 18 9/09/2014 HHL HUNTER HALL INTERNATIONAL LIMITED 98 0.064 0.134 6.381 2.1 Final 19 8/09/2014 IAG INSURANCE AUSTRALIA GROUP LIMITED 100 0.26 0.39 6.019 6.48 Final 20 10/09/2014 LBL LASERBOND LIMITED 100 0.002 0.004 3.636 0.11 Final 21 9/09/2014 LCM LOGICAMMS LIMITED 100 0.035 0.055 5.164 1.065 Final 22 10/09/2014 MYS MYSTATE LIMITED 100 0.145 0.285 5.746 4.96 Final 23 10/09/2014 NZO NEW ZEALAND OIL & GAS LIMITED 0 TBA 0.05 7.028 0.71 Final 24 9/09/2014 OSH OIL SEARCH LIMITED 0 TBA 0.044 0.455 9.58 Interim
25 8/09/2014 ORA ORORA LIMITED 0 0.03 0 0 1.725 Final 26 9/09/2014 OZL OZ MINERALS LIMITED 0 0.1 0.2 4.728 4.23 Interim
Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders.[1] When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business (called retained earnings), or it can be distributed to shareholders. There are two ways to distribute cash to shareholders: share repurchases or dividends.[2][3] Many corporations retain a portion of their earnings and pay the remainder as a dividend. A dividend is allocated as a fixed amount per share. Therefore, a shareholder receives a dividend in proportion to their shareholding. For the joint stock company, paying dividends is not an expense; rather, it is the division of after tax profits among shareholders. Retained earnings (profits that have not been distributed as dividends) are shown in the shareholder equity section in the company's balance sheet - the same as its issued share capital. Public companies usually pay dividends on a fixed schedule, but may declare a dividend at any time, sometimes called a special dividend to distinguish it from the fixed schedule dividends. Dividends are usually paid in the form of cash and shares in the company (either newly created shares or existing shares bought in the market.) Further, many public companies offer dividend reinvestment plans, which automatically use the cash dividend to purchase additional shares for the shareholder. Source: From Wikipedia, the free encyclopaedia.
Did you know that FS Securities can help you with any Real Estate needs? Why deal with us? Because we can help you provide a bridging loan at a reasonable rate and provide you which choices in properties across Australia for investment.
We learnt that in Sydney the property median price has escalated by 12% above the all-time high level. In Melbourne it has moved up by 8 to 9% above the all-time high. In Queensland the median price is still 7 or 8% below the all-time high. RP Data Rismark figures recently showed Sydney home prices rose 2.5 per cent last month and 5.2 per cent in the last quarter. Melbourne also rose 2.4 per cent in a month and 5 per cent in the quarter.
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GENERAL ADVICE DISCLAIMER this document has been prepared for the general information of investors and does not take into account the investment objectives, financial situation and particular needs of any particular person. Persons intending to act on information in this document should seek professional advice to confirm that the investments or strategies mentioned are appropriate in the light of their particular investment needs, objectives and financial circumstances prior to taking any action. Email transmission cannot be guaranteed to be secure or error free and there is a risk messages may be corrupted, intercepted or lost in transmission. Therefore we do not accept liability for any viruses, errors or omissions in the contents of this message or attachments which arise as a result of email transmission. Statements contained in this email are general only and do not take into account the particular needs, objectives, financial circumstances or investment preferences of any person. George Beyrouthi is an Authorised Representative (AR# 315 563) of FS Securities (QLD) Pty Ltd AFSL# 410 183.
