Aitken wraps the market news

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Australian Broadcasting Corporation

Broadcast: 16/02/2010

Reporter: Whitney Fitzsimmons

Charlie Aitken, at Southern Cross Equities, joins Lateline Business for a look at the day on the markets.


WHITNEY FITZSIMMONS, PRESENTER: For a look at the rest of day on the markets I spoke earlier to Charlie Aitken at Southern Cross Equities.

Charlie Aitken, how much does the broad market rally reflect the response to Westpac's quarterly results?

CHARLIE AITKEN, SOUTHERN CROSS EQUITIES: Well, Whitney, there's no doubt that Westpac's trading update today was much better than the market expected - even that I expected.

There'll be analyst upgrades of 16, 17, 20 per cent for Westpac earnings tomorrow. Stock was up 6 per cent. But if you look at the index today, the index was up 22 points.

Almost all of that was contributed by Westpac and the major banks. So the broader market had a pretty ordinary day.

WHITNEY FITZSIMMONS: But the mining sector is flat despite talk of higher iron ore prices.

CHARLIE AITKEN: Yeah, that was interesting too because there's a contest on amongst analysts to see who could have the most ridiculous iron ore price rise forecast, yet the resource stocks today just didn't go on with it.

BHP and Rio both down, both huge iron ore miners. I think there's a little bit of, let's just say negativity coming into some of the iron ore stocks because people think that this is all getting a little bit overhyped and there could be a sell-the-fact response when the iron ore contract price is settled.

WHITNEY FITZSIMMONS: Among the other reporting companies OneSteel has skipped higher. Is that off the back of a positive result?

CHARLIE AITKEN: Well it's funny, Whitney: when you look at the headline result, OneSteel's result was down 50 per cent on the year before, but that was better than the analysts were looking for.

So the stock rallied about 4 per cent, and it came after BlueScope, one of their competitors, reported very ordinary earnings yesterday. But the different is that OneSteel also sell iron ore.

So, they did a little bit better than BlueScope and there was clearly some switching today from BlueScope to OneSteel shares.

WHITNEY FITZSIMMONS: Alright. So Mirvac has also released its numbers. What's your assessment on that?

CHARLIE AITKEN: Yeah, they weren't too bad. I mean, Mirvac's an interesting little company. It's re-capitalised, it seems to be merging into a slightly better housing cycle, property development cycle. The outlook was quite upbeat and the stock did a little bit better. I think they will trade higher in the next few days.

WHITNEY FITZSIMMONS: OK, so can you tell us why didn't the market like Primary Healthcare's big increase in profit?

CHARLIE AITKEN: Whitney, they didn't like - the margins were the problem. There were problems in the - or pressure in the margins side in the pathology and in the GP business and the market was unimpressed by that. So the stock was down quite heavily, about 12 per cent.

I think you'll see some downgrades tomorrow, and it wasn't great news there from primary.

WHITNEY FITZSIMMONS: Charlie Aitken, thanks for joining us.

CHARLIE AITKEN: Thankyou, Whitney.

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Aitken wraps the market news

Aitken wraps the market news

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