Australian Stock Market Report – Midday 11/13/13

MID-SESSION REPORT
(12.45pm AEDT)

The All Ordinaries Index (XAO) is down by close to 0.5 per cent at lunch, with the tiny IT sector the only industry to escape the losses.

Share registry, Computershare (CPU) is up by 2 per cent as it holds its Annual General Meeting (AGM) with shareholders. CPU shares are up 23.6 per cent this calendar year.

The energy sector is one of the biggest losers at lunch, down 1.1 per cent, the miners are easing by 0.4 per cent and the financials (including the banks) are down 0.83 per cent (holding back the market most).

A large number of businesses are issuing sales results, quarterly, half yearly and annual profit numbers in addition to meeting with shareholders. Fortescue, Leighton, Myer, Seven West Media, CSR, Dulux and Webjet are some of the bigger names in the spotlight today.

Fortescue Metals, Australia's third largest iron ore miner (behind only BHP and RIO) is holding its AGM today and is surging by 2.58 per cent. FMG announced plans to make the best of the firm iron ore price to pay down US$1 billion of its significant US$12 billion debt. This is expected to have FMG pay off its debt two year early and save US$70 million a year in repayments in the process. Earlier this month, FMG had its debt facility repriced, saving around US$50 million in repayments each year. Ratings agency, S&P raised its long-term credit rating on 6th November. FMG is up by 9.7 per cent so far this month and is 22.6 per cent this higher this year.

Department store owner, Myer (MYR) is up 3.16 per cent, being helped by a 0.4 per cent rise in quarterly sales to $691 million. Its online sales more than doubled over the three months. Its FY13 profit result, issued in September was largely in line with forecasts and showed that profit slid by 9 per cent to $127.2 million.

On the economic front, consumer sentiment rose by 1.9 per cent in November, making up for the 2.1 per cent slide in sentiment over October. Confidence is at a three year high. Approximately 1/3 of Australia's GDP is reliant on consumer spending. A rise in confidence (in theory) results in higher spending.

The Australian dollar buys US93 cents.

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