In today’s daily we have covered stock research on Flexigroup (BUY) & Sydney Airport (Expensive).
The S&P 500 was down by 0.82 points or 0.04% to 2101.49 on Friday. The decision by theGreek Prime Minister Alexis Tsipras to call a national referendum for next Sunday on the European bailout proposals was not only an unwelcome shock to his fellow European leaders. It seemed to shatter any remaining political hopes it was still possible to yet again stitch up some sort of crisis compromise over Greece. We are exploring uncharted territory. While our base case remains that Greece will retain the Euro, the risk of a 'Grexit' is rising and uncertainty is increasing as we enter the uncharted territory of default, deposit controls and payment in IOUs.
Greece will keep its banks closed on Monday and place restrictions on the withdrawal and transfer of money, Prime Minister Alexis Tsipras said in a televised address on Sunday night, as Athens tries to avert a financial collapse. Going forward, cyclical recovery in euro zone is still the picture driving things. Contagion will be limited even in Grexit case, and recovery won't be derailed. That should help the euro over the summer. Tuesday will be a particularly big day. That is when the Greece's EU bailout is set to expire and a €1.5bn loan repayment is due to the International Monetary Fund. Away from Athens, investors will have their eyes on the latest US monthly jobs report, which is coming out a day earlier than usual on Thursday because the markets will be closed on Friday in observance of Independence Day.
EURO vs US DOLLAR Daily Chart (Source - Thomson Reuters)
S&P ASX 200 was down by 86.80 points or 1.54% on Friday and closed at 5545.90 points. BHPled the market down, dropping 3.5 per cent for the day and 3.2 per cent for the week to $27.50. Rio Tinto slipped 2.8 per cent for the day and 2.6 per cent for the week to $54.08, whileFortescue lost 6.1 per cent on Friday and 7.9 per cent for the week to $1.99. Among the banks,ANZ retreated 1 per cent on the day and 1 per cent for the week to $33.10, Commonwealth Banklost 0.7 per cent on the day but gained 2.5 per cent for the week to finish at $86.65, NationalAustralia Bank lost 1 per cent on the day but gained 1.3 per cent for the week to $34.09 andWestpac gave up 0.9 per cent on the day but added 0.6 per cent for the week to $33.01.
Telstra shed 1.4 per cent for the day and 1.1 per cent for the week to $6.20. Woolworths shares jumped as much as 5.65 per cent, closing 3.8 per cent higher for the day and 0.3 per cent higher for the week, after media outlets reported on "rumours running through the market" that private equity joint KKR is preparing a takeover bid. Bradken will explore a merger with a subsidiary of Chilean industrial group Sigdo Koppers, after CHAMP Private Equity teamed up with the Chilean firm to inject $70 million into Bradken.
Bradken Daily Chart (Source - Thomson Reuters)
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Sydney Airport (EXPENSIVE)
As per the May Sydney Airport traffic highlights, total passenger numbers has improved by 1.6% on year over year terms. Average load factors have improved for both domestic as well as international markets, by 1.5% and 2.5% respectively, indicating continuous demand for air travel. Domestic and international passengers year to date performance increased by 1.7% and 2.8% respectively, as compared to the year to date performance in 2014. Asian markets have been driving the inbound passenger growth, wherein Philippines, China and Hong Kong delivered 33%, 22.7% and 14.8% YoY growth respectively. Korea and India passengers’ traffic witnessed a year over year increase of 11.4% and 7.4% respectively. Click Here To Read The Full Report.
Last twelve months data (Source: Company Reports)
Flexigroup (BUY)
FXL, which leases equipment to consumers and business, stock was up over 10% year to date before June 22nd but following the exit news of chief Tarek Robbiati the stock is now down 1% YTD. Investors certainly didn’t like the news, which though understandable, will only have a short-term impact on the stock price, and soon we could expect the company to hit earlier levels.
Group Overview (Source - Company Reports)
Mr. Robbiati, since taking up the role in January 2013, helped FXL with its profits along with a string of acquisitions of finance and leasing companies. Though the exit definitely raises growth concern into financial year 2015-2016, the board is already in action with an internal and external search to find a suitable replacement. We expect, FXL to find a suitable replacement soon, who will continue with the impressive growth in years to come. What’s interesting to note here is, on the day the company announced the exit of Mr. Robbiati, it also reaffirmed its cash net profit forecast for 2014/15 of $90-91 million. By this, the management wants to send out the signal to the stakeholders that the exit of Mr. Robbiati won’t impact the operations. Click Here To Read The Full Report
Level 13 167 Macquarie Street
Sydney NSW 2000 Australia
E-Mail - [email protected]
Phone - 02 8667 3147
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