Nickel was the big story of the day today; Western Areas, the only pure-play nickel producer in the ASX200, was down a massive 19% on news that Indonesia had eased its ban on the export of nickel (and bauxite) ores and concentrates. It’s been around three years now since the Indonesian government announced that it would restrict the export of unprocessed ores in an effort to encourage the domestic smelting industry. Reports suggest Chinese companies have invested upwards of USD 15b in building smelters in Indonesia.
What I’m reading today:
Reuters reports on the changes to the Indonesian ore export ban: (VIEW LINK)
Douglas Isles from Platinum Asset Management explains how they deal with change – a constant for all investors: (VIEW LINK)
Professor Aswath Damodaran presents a primer on the concept of connecting stories and numbers in the context of valuing a company: (VIEW LINK)
Data (provided by FactSet)
- ASX200: (45.80) pts or (0.79%) to 5721.10
- AUDUSD: +0.0001 or +0.03% to 0.7479
- Australian 10Y govt bond yield: +3.4 bp to 2.69%
- Gold (Feb-17): +$3.70 or +0.31% to $1192.70
- High grade copper (Mar-17) ($0.01) or (0.45%) at $2.66
- WTI Crude (Jan-17): +$0.04 or +0.06% to $53.05
- Breadth on the ASX 200 was(3.2):1
- Index performance
- Month-to-date: ASX 200 0.98%
- Quarter-to-date: ASX 200 0.98%
- Year-to-date: ASX 200 0.98%
Iron ore stocks weakened slightly despite Iron ore futures holding near multi-week highs. The market has been supported by China's decision to close smaller mill that affect around 4% of the country's steel production. BHP.AU (0%), RIO.AU (1%) and FMG.AU (2%).
Precious metals stocks came under pressure amid weaker gold prices. NCM.AU +0%, RRL.AU (3%), EVN.AU (3%) and NST.AU (3%).
Industrial metals Nickel fell sharply amid reports that Indonesia would approve exports from its domestic producers which was reflected in the strong declines in WSA.AU (19%) and IGO.AU (10%).
Energy +0.43%. The major LNG producers were mixed as there was little change in the oil price. WPL.AU (0%), OSH.AU (0%), ORG.AU +3% and STO.AU (1%).
Financials (1.43%). The big four banks were all lower, following on from the sector weakness in the US overnight and despite higher bond yields. CBA.AU (1%), WBC.AU (2%), NAB.AU (1%) and ANZ.AU (2%).
- +4.5% WHC.AU (Whitehaven Coal Ltd. A$3.00, +0.13)
- +3.6% ACX.AU (Aconex Ltd. A$5.68, +0.20)
- +3.2% ORG.AU (Origin Energy A$7.15, +0.22)
- +2.8% IFN.AU (Infigen Energy Ltd. A$0.91, +0.03)
- +2.8% BKL.AU (Blackmores Ltd. A$116.12, +3.12)
- -19.2% WSA.AU (Western Areas Ltd. A$2.65, -0.63) -- Nickel; Indonesia to allow exports of nickel, bauxite - Reuters
- -10.2% IGO.AU (Independence Group NL A$4.16, -0.47) -- Nickel; Indonesia to allow exports of nickel, bauxite - Reuters
- -8.9% BAL.AU (Bellamy’s Australia Ltd. A$4.01, -0.39) -- Continuation losses following trading update; (34.1%) last 3 days
- -4.4% RSG.AU (Resolute Mining Ltd. A$1.32, -0.06)
- -3.9% SXL.AU (Southern Cross Media Group Ltd. A$1.47, -0.06)
Patrick was one of Livewire’s first employees, joining in 2015 after nearly a decade working in insurance, superannuation, and retail banking. He is passionate about investing, with a particular interest in Australian small-caps.