Issue 1 Covering the period: 19 â€“ 23/05/14
After a volatile week, the ASX 200 has ended in positive territory, albeit by a small margin of 0.25%. The transformative event of the week was the improved reading on Chinese manufacturing on Thursday which provided the mining sector with a timely boost following the selling seen at the start of the week. Miners ended lower as a group although this came after the strong gains seen on Thursday. Gold miners were one of the weak spots in the resource sector. St Barbara Limited (SBM), an Australian gold producer and explorer ended down by 2.5% after the groups credit rating was downgraded from B3 to Caa1. In its communication with the ASX, SBM said there is no change to its existing debt arrangements as a consequence of the ratings agencyâ€™s action.
Fisher & Paykel Healthcare Corp (FPH) rose by 1% after reporting a record full year net profit. The medical device manufacturer said net profit rose 26% on a 13% rise in operating revenues. The result was driven by rising sales to hospital clinicians and homecare providers. Cleaning and catering services firm Spotless Group (SPO) returned to the Australian Securities Exchange on Friday. SPO opened at $1.75, 15 cents above their issue price of $1.60, and ended at $1.71 a gain of more than 7%. The group was bought by private equity group Pacific Equity Partners in August 2012 for $720 million. Asia Asian shares mostly rose as data indicated an improvement in Chinese manufacturing activity and minutes from the US Federal Reserve showed officials are considering their policy options after the bank's stimulus program ends. Tokyo rallied 2.11%, to 14,337.79 and Seoul gained 0.36%, to 2,015.59. Hong Kong rose 0.51%, to 22,953.76 but Shanghai closed 0.18% lower, to end at 2,021.29. HSBC said preliminary data from its purchasing managers index (PMI) showed activity in China's factories declining at a much slower pace in May than in April. The banking giant's PMI improved to 49.7 from 48.1 last month. While the figure is below the 50-mark - suggesting contraction - it is the second straight month of improvement and will fuel hopes that the world's number two economy is picking up.
US In US economic news initial jobless claims rose 28,000 to 326,000 last week. US existing home sales rose by 1.3% in April to 4.65 million annual units. The increase marked only the second gains in nine months. Sales remain 6.8% lower than a year ago. The US Markit ´´flash´´ manufacturing index rose from 55.4 to 56.2 in April. US sharemarkets recorded modest gains on Thursday, led by a rally in small-cap and biotech´s stocks. Housing stocks also were amongst the better performers following the rebound in existing home sales. The housing index lifted 1.2% with luxury home builder D.R Horton up 2.4%. Discount retailer Dollar Tree jumped 6%, and was the best performer on the S&P500, after posting upbeat first quarter results. The small-cap Russel 2000 index lifted 0.9%. Shares in JD.com - a Chinese online retailer that handled more than $20 billion of purchases on its website last year - raised $1.78 billion in an IPO and jumped 8%. The Dow Jones index rose by 10 points or 0.1% with the S&P 500 up by 0.2% while the Nasdaq rose 23 points or 0.6%.
On Friday, Wall Street stocks finished higher following mixed US economic data as a closely watched index of small-cap equities outperformed the broader market. The Dow Jones Industrial Average added 0.06%, to 16,543.08. The broad-based S&P 500 rose 0.24%, to 1,892.49, while the tech-rich Nasdaq Composite Index jumped 0.55%, to 4,154.34.
Europe Looking overseas again, to the mixed Eurozone manufacturing data released on Thursday, highlighted the divergence between the Eurozoneâ€™s economies. Additionally the low rates for Eurozone inflation consolidates the view that European Central Bank will do more to stimulate the economy in June. The pullback in the German manufacturing suggests there is some downside risks to the May German IFO (investor sentiment) set to be released. A softer reading would add to expectations that more ECB stimulus is close at hand, which could be supportive for European stocks. Exchange Rate and Commodities
Uber Uber, the start-up app that connects people with taxis and drivers, is seeking to raise fresh capital that would give it a $12 billion value, the Wall Street Journal reported Friday. The Journal said Uber, which has already raised significant venture capital, is seeking $500 million from various investor groups.
The company did not respond to an AFP query on the report. San Francisco-based Uber, launched in 2009, offers a mobile app connecting passengers and taxis along with a "black car" service. Uber is the most prominent of the apps that are shaking up the traditional taxi landscape in cities around the world. The company has faced significant resistance from regulators. In New York, for example, Uber's rates run afoul of fares set by the city's taxi commission. Uber has also faced regulatory issues in Europe and protests from taxi operators who claim the service is unfair competition and fails to live up to standards set for such services. Uber operates in 36 countries in the Americas, Europe, the Middle East, Africa and Asia and in Australia. Google Google next month will start cranking out prototypes of a 3-D tablet designed to give users immersive experiences that could include virtual reality, according to US media reports. The tablet will have a 7-inch display and an array of sophisticated cameras, sensors and software, the Wall Street Journal said. Google on Friday said they had nothing to announce. The tablet was reported to be part of a Project Tango worked on by a special team at the California-based technology firm. The project was said to involve giving advanced mapping and virtual reality capabilities to mobile devices powered by Google's free Android software. Nearly 42% of people in the United States used tablets at least once a month last year and that figure was expected to top 46% this year, according to US industry tracker eMarketer. The percentage is thought to be around half that in Australia.
Sources: Yahoo Finance Comm Sec Wall Street Journal
Bond Investment Group's five minute guide to some of the deals made globally and what the markets did and economic news of the week just gon...