Investor update
You should always consult your Bridges financial planner before taking action on any recommendation given.
Information current as at 30 April 2013.
Global equity markets leapt forward in the first half of the month in response to Japan's announcement of wide-ranging and large-scale asset purchases. The release of a disappointing first quarter China GDP print, however, saw markets sell off before recovering ground towards month-end. The S&P 500 managed to eke out small gains over April (+1.8%). Japan continued to build on previous months’ gains (Nikkei 225 +11.8%) while the re-election of outgoing Italian President Giorgio Napolitano brought European markets some certainty (Euro Stoxx 50 +3.4%). The ASX200 gained ground (+4.5%, +4.5%, accumulation.) despite the mining-heavy Materials sector (-3.9%, acc.) suffering heavy losses on weak Chinese growth data. Sector leadership had a defensive flavour with Telcos (+10.7%) topping the leader board whilst REITs (+8.2%) were lifted by news that the Bank of Japan would expand purchases of J-REITs.
Australian Shares
The ASX200 began the month strongly but Materials (−3.9%, accumulation) dragged the bourse down after selling off on a weak Chinese GDP print. The 1Q13 CPI release, however, surprised on the downside, lifting markets to a 57-month high as investors anticipated further headroom for an RBA rate cut. REITs (+8.2%, acc.) topped the sector leader board this month as the Bank of Japan announced that it would significantly increase purchases of J-REITs. Telcos (+10.7%), Consumer Staples (+7.1%), Utilities (+4.0%) and Consumer Discretionary (+4.9%) also outperformed.
After announcing that it would not proceed with the development of its Browse project at James Price Point, Woodside declared a special dividend of US63cps and signaled its intention to increase its payout ratio from 50% currently to 80% over the next several years. Graincorp conditionally agreed to a $13.20 per share offer from Archer Daniels Midland.
Economic news
Chinese first quarter GDP came in at 7.7% year-on-year versus consensus expectations of 8.0%. The Bank of Japan announced that it would change the target of its monetary policy to the monetary base from the overnight call rate, with the new target being a ¥60–70 trillion increase per year, an expansion of purchases of long-end JGBs with average maturity extended to seven years (currently less than three years), an expansion of purchases of ETFs to ¥1trn per year from ¥500bn as well as J-REITs to ¥30bn from ¥10bn. Locally, the RBA left the cash rate on hold and the first quarter CPI data surprised on the downside.
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