Australia Stock Market Report – Tabcorp, BHP, Telstra shares & more
Market Commentary and Stock Tips - 1st December 2017
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.
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.
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
Monday: Business Indicators
Tuesday: Retail sales
Friday: Housing finance
In the U.S.
A plethora of economic data- jobless figures, data on the manufacturing sector and motor vehicle sales.
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