Australia Stock Market Report – Tabcorp, BHP, Telstra shares & more

Australia Stock Market Report - Tabcorp, BHP, Telstra shares

Market Commentary and Stock Tips - 1st December 2017

Highlights

Royal Weddings (v) Royal Commissions – Weddings are much happier events – They may not be in the Ashes Test but Macquarie Group ‘cracked 100’ – BHP ebullient about Olympic Dam – Telstra reminds me of a 1960’s Dusty Springfield hit – TABCORP rounds the home turn to snare Tatts – The Banks, “it’s a properly constituted inquiry’ --- no no no what a minute, it’s a Royal Commission.

When Harry met Meghan - the wedding bells started to chime

Weddings are exciting for the bride and the groom, but they also make put most people in a happy frame of mind. Indeed, an ancillary plus for a monster royal wedding is that it’s not only good for the country but history shows that it also has a rub off beneficial effect for respective economies and share market.

Inquiry at 8:47AM – Royal Commission at 10:25AM (Thursday)

One never ceases to be surprised by the shenanigans in Canberra. Hot on the heels of a letter from all four major banks to the Treasurer about recommending a “properly constituted inquiry into the financial services sector” was the surprise packet delivered just 2 hours later when PM Turnbull announced a Royal Commission into the finance sector. The only good thing about this monumental expenditure of around one hundred million dollars is that it will put an end to the serial uncertainty that surrounds our banking industry in particular.  

In my view all our major banks are certainly worth considering.

BHP Olympic dam gets a gold medal

At its recent talk fest BHP gave ‘run down’ on its wide ranging mineral assets with particular emphasis on the Olympic Dam assets in South Australia. This quite amazing resource has over 450km of underground roadways and according to a report which I recently read Olympic Dam a mine life of around 500 years for its copper asset!

What do Telstra and the 60’s songstress have in common?

The answer: - For those who can remember, Dusty Springfield had a hit in the 60’s called Wishin’ and Hopin’. Well that’s just about what Telstra are saying now, following the NBN “pulling the plug” for 6-9 months on the roll-out of their fibre cable called HFC technology. Telstra are unclear about the impact on its profitability but the expected 22cent dividend was reaffirmed for this financial year.

My view: I prefer to trim or sell Telstra shares and place the funds with alternative dividend paying stocks with better growth potential, such as: Macquarie group; ASX; Transurban; and TABCORP.

Stop Press

Tatts – a strong first quarter trading result.

TABCORP - merger with Tatts now almost certain.

Seek – AGM commentary positive about its job seeker business and educational services.

OECD – confirms an upbeat view of the Australian Economy

Galaxy – Lithium producer wins ‘off take’ contracts to sell the product.

MaynePharma – Generic medical products facing stiff competition.

Capital Investment – well on the recovery trail.

Conclusion

We are still dancing around 6,000 points. As previously commented I believe that the market can reach a record high next year, as I don’t see major storm clouds on the horizon, other than a partial retraction of the incredible 30% rise in the US share market in the last 12 months. On the other hand, positive impacts are low interest rates, our low dollar and falling unemployment.

Stock Tips –reserved for clients

australian stock market weekly report

Next Week

Monday: Business Indicators

Tuesday: Retail sales

Wednesday: GDP

Friday: Housing finance

In the U.S.  

A plethora of economic data- jobless figures, data on the manufacturing sector and motor vehicle sales. 

Disclaimer: This publication has been prepared solely for the information of the particular person to whom it was supplied by Phillip Capital Limited (“PhillipCapital”) AFSL 246827.  This publication contains general financial product advice.  In preparing the advice, PhillipCapital has not taken into account the investment objectives, financial situation and particular needs of any particular person.  Before making an investment decision on the basis of this advice, you need to consider, with or without the assistance of an adviser, whether the advice in this publication is appropriate in light of your particular investment needs, objectives and financial situation.  PhillipCapital and its associates within the meaning of the Corporations Act may hold securities in the companies referred to in this publication.  PhillipCapital believes that the advice and information herein is accurate and reliable, but no warranties of accuracy, reliability or completeness are given (except insofar as liability under any statute cannot be excluded). No responsibility for any errors or omissions or any negligence is accepted by PhillipCapital or any of its directors, employees or agents. This publication must not to be distributed to retail investors outside of Australia. 

 

About Michael Heffernan

+61 (3) 8633 9925 Email Profile

Michael Heffernan has over 30 years’ experience in the finance and securities industry and is currently a Senior Client Advisor and Economist with a leading Australian Sharebroker Phillip Capital after having been Chief Economist/Lawyer with the Australian Stock Exchange for 13 years, and an Economist with Commonwealth Department of Employment and Industrial Relations for 11 years.

Most recently Michael topped the poll of the Australian Newspaper's Criterion column of his expert tipsters for 2014 with an average increase of 26% over the year. Also Michael was named Stock Picker of the year 2013 and 2016 at the Australian Stockbrokers Foundation Annual Awards Charity Dinner.

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