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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.
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.
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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