S&P ASX 200was up by 33.4points or 0.60%on Wednesday and closed at 5576.7 points. CBA has increased its substantial holding inEBET Limited (EBT) from a voting power of 9.68% to 11.36%. NAB has reduced its substantial shareholding in DUET Group (DUE) from 7.85% to 6.58%. Also NAB has become a substantial shareholder in the Challenger Group (CGF) with a voting power of 5.22%. Telstra will send 671 Australian jobs into Asia as part of an outsourcing round.

Pat Grier has been appointed as the chairman of Estia Health which might be making its debut on the ASX. Sims Metal Management has unveiled cost cutting plans to boost earnings. BKI Investment Company (BKI) announced an increase of 20% to $35.9m for the net operating result before special dividend income. Zinc held near a three-year peak with supply set to tighten. SPI futures are up 19 points at the time of writing this article. Among the top two performers on ASX 200 were Lynas (+17.65%) and Magellan Financial (+7.03%).


Magellan Daily Chart (Source – Thomson Reuters)

The top gainers on ASX 200 were:- 



Stock of the Day – Iress  (IRE)

IRESS is well positioned in some key markets to grow its presence in wealth management automation – something we think likely to continue growing at a fairly rapid pace although navigating the vagaries of the market will require deft execution. It also enjoys a strong position in its legacy financial markets business in ANZ that should support growth from a cash point of view. IRE’s intent to grow its financial markets business geographically could absorb some of this cash but we think this is likely to be incremental rather than transformational.


IRESS Software (Source – Traderdealer)

In May IRESS reconfirmed 2014 profit guidance first provided at its result release in February. While the headline 20% EBIT growth looks ambitious, it is a function of U.K wealth management software acquisition, Avelo making its first full year contribution. The financial markets business not rebounding in 2014 despite stronger equity markets was marginally disappointing but we are comforted by management noting conditions continue to gradually improve.
  

Iress Income (Source – Company Reports)

While earnings are impacted by trading conditions and industry dynamics, we believe IRESS has enduring competitive advantages that should see excess reruns on capital. Difficulties in clients changing between systems create significant customer switching costs, high customer stickiness and positive network effects. The high growth wealth management business is poised to take advantage of financial planning regulatory changes occurring in Australia and in the U.K.


IRESS Daily Chart (Source – Thomson Reuters)

Increased compliance requirements and fee pressure support demand for IRESS’s suite of products. Not only are advisers focused on improving operating efficiency but in tandem must meet changing disclosure requirements. Consolidation of adviser groups also supports demand for the firm’s compliance focused tools. We believe the stock is expensive at its current price and would review the stock at a later date.
  

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