That Was The Week That Was … In Australia

By Our Man in Oz

Minews. Good morning Australia, your market seems to have staged a solid recovery, recouping the modest slide which we discussed a week ago.

Oz. It was a case of good news all round on the ASX though how long that lasts is the question because as I’ve warned on several occasions recently we seem to be heading for another round of political fun and games which could kick off on Tuesday with the abrupt exit of yet another Prime Minister.

Minews. There’s been a bit of chatter about that in London but is it likely to happen?

Oz. It seems quite likely with the final straw in the turbulent rule of the current PM, Tony Abbott, having an amusing U.K. link with last month’s awarding of an Australian version of a knighthood to the Duke of Edinburgh.

In a country which has a soft spot for the British monarchy, despite republican tendencies, that was a stretch too far even for hard-core monarchists and when Abbott admitted that it was a decision he alone had made the knives came out immediately.

Minews. What does that mean for your stock market?

Oz. Possibly nothing. If there is to be a replacement it is likely to be Malcolm Turnbull, a particularly skilful lawyer and political operator who seems to be less hard-line than Abbott and might be capable of doing a better job.

Of course, the ultimate alternative is a return to a Labor Government and that could be very bad news for mining, especially if the damaging super-tax is revised despite the fact that there are no super profits left to tax.

Minews. Interesting times for you, but now is the time for us to deal with last week’s market and a look at the indices and share prices.

Oz. As mentioned earlier the overall trend was positive with banks and industrial shares aided by a cut in official interest rates, and with the resources sector aided by modestly higher base metal prices and a fresh fall in the value of the Australian dollar.

Gold share reclaimed lost ground, but that was before the latest fall in the U.S. dollar gold price which will weigh on the ASX on Monday.

Every key index on the ASX went up last week. Gold added 5.7 per cent. The metals and mining index gained 7 per cent thanks mainly to strong showings by the two leaders, BHP Billiton and Rio Tinto, while the all-encompassing all-ordinaries index rose by 4 per cent.

Minews. Across to prices now please, starting with any eye-catching price changes.

Oz. Somewhat oddly there were not a lot of exceptional moves up, or down, but here’s a selection which might contain a few new names for your readers.

Cardinal Resources (CDV), a low-profile gold explorer, popped up to a 12-month high of A9 cents after reporting strong drill hits at its Namdini project in Ghana. The best intersection of 42 metres assaying 2.35 grams a tonne helped lift Cardinal by A2.5 cents, or 38 per cent.

Panoramic (PAN) played catch-up to its nickel-mining cousins with a rise of A9 cents (20 per cent) to A54.5 cents with buyers jumping aboard after an optimistic presentation at an investment seminar on Wednesday.

Energia Minerals (EMX) attracted a modest level of support after reporting a start on refurbishing the Gorno zinc mine in northern Italy. The stock only added half-a-cent to A3.6 cents but that represents a 16 per cent gain and could be sign of more to come.

Fortescue Metals (FMG), the leading iron ore pure play, added A18 cents to A$2.54 after a surprise announcement that a big U.S. fund had snapped up 5 per cent of the stock. Just nine trading days ago Fortescue hit a 12-month low of A$1.92 which means its Friday’s closing price represents a gain of A62 cents, or 32 per cent.

Minews. Interesting moves, but it’s time now our weekly call of the card, starting with gold, please.

Oz. The trend among gold stocks, as shown in that 5.7 per cent index rise was up, and with a handful of handsome rises which might be challenged next week. After Cardinal some of the better performers included: Evolution (EVN), up A13 cents to A$1.03. Norton (NGF), up A1.5 cents to A19 cents. Beadell (BDR), up A3.5 cents to A32 cents. Northern Star (NST), up A19 cents to A$1.98, and Newcrest (NCM), up A67 cents to A$14.23.

Minews. The base metals next please, starting with copper.

Oz. Sandfire (SFR) was the pick of a generally stronger copper sector, adding A39 cents to A$4.66. OZ Minerals (OZL) wasn’t far behind with a rise of A25 cents to A$4.12 and PanAust (PNA) put on A18 cents to $1.39. Other copper moves, either way, included: Tiger (TGS), up A3.5 cents to A7.4 cents with a move that barely recouped last week’s heavy fall, and Hot Chili (HCH), down A2 cents to A14 cents.

Panoramic, mentioned earlier, was the best of the nickel stocks. Sirius (SIR) also did well with a rise of A59 cents to A$3.10, though gold assets would have helped with that rise. Western Areas (WSA) put on A47 cents to A$4.49, and Mincor (MCR) crept up another A2.5 cents to A74.5 cents.

Zinc stocks trended down. Energia, mentioned earlier was one of the few to go against the trend. Other moves included Terramin (TZN) and Ironbark (IBG), both down by A1 cent to A13 cents and A9.7 cents respectively.

Minews. Iron ore next, please.

After Fortescue’s big bounce BC Iron (BCI) was the pick up the pack with a rise of A11 cents to A57.5 cents. Mt Gibson (MGX) crept up by half-a-cent to A22 cents. Atlas (AGO) recouped A2.5 cents, and Mineral Resources (MIN) put on a sharp A58 cents to A$7.32.

Minews. Uranium, coal and graphite next please.

Oz. The oil price weighed on energy minerals with one exception, Whitehaven Coal (WHC) won new friends after the official opening of its big Maules Creek mine. That news helped lift the stock by A19 cents to A$1.43. Other coal moves were less exciting. New Hope (NHC) added A4 cents to A$2.40 and Prairie Downs (PDZ) slipped half-a-cent lower to A34.5 cents.

Energy Resources (ERA), the Rio Tinto controlled uranium producer, led a lacklustre crop of U-stocks with a rise of A7 cents to A$1.37. Paladin (PDN) lost A1 cent to A37 cents, and Berkeley (BKY) slipped back by half-a-cent to A23 cents.

Archer (AXE) was the top performing graphite stock on a percentage basis, rising by A2.3 cents to A12 cent. Syrah (SYR) added A23 cents to A$3.83. Kibaran (KNL) and Talga (TLG) had a busy news week but both ended steady at A15 cents and A33 cents respectively.

Minews. Minor metals to close, please.

Oz. Highfield Resources (HFR), one of the crop of fertiliser stocks, was the best of a very flat lot of minor metals and minerals, adding A4.5 cents to A81.5 cents.

Alkane (ALK) was the pick of the rare earth plays, though it is another stock heavily influenced by its gold interests. It added A5.5 cents to A30.5 cents, its highest since the middle of last year.

Wolf (WLF) was the best of the tungsten and tin stocks with a rise of A2 cents to A26 cents.

Base (BSE) clawed back half-a-cent to A14.5 cents, which isn’t much but it does reverse a worrying downward trend evident since late last year when the stock was trading at more than A30 cents.

Minews. Thanks Oz. Enjoy your big political showdown on Tuesday.