Investor update

You should always consult your Bridges financial planner before taking action on any recommendation given.

Information current as at 31 March 2012

The ASX200 index recorded a third successive monthly rise in March (+0.9%, +1.2% accumulation), its first such run since March last year, and clocked its best close since the sell-off in early August.  Japan was the standout of the major markets (Nikkei 225 +3.7%) and the US rounded off its best first quarter since 1998 with a strong March (S&P500 +3.1%). European markets were soft though (Euro Stoxx 50 -1.4%, FTSE100 -1.8%) and Asia ex Japan also lost ground (MSCI USD index -3.2%). This reflected concerns over China’s growth momentum, which were echoed within the Australian market as the mining-heavy Materials group (accumulation -3.9%) lagged badly.  Despite an absence of clear positives, the Banks sector (accumulation +3.8%) beat the index by the widest monthly margin since October.  Energy (-2.2%) gave back some of February’s gains as oil prices stalled.

Australian Shares

The ASX200 index managed a third straight monthly gain (+0.9%, accumulation +1.2%) for the first time in a year.  Turnover continued to be light: March turnover for ASX200 shares was down by 27% on the same month last year and for the quarter the drop was 17%.  Sector action was dominated by the weak performance of the Materials sector, led by Miners; the ASX300 Metals and Mining index lost 4.8% (accumulation) amid concerns over China’s growth, although spot metals prices were mixed rather than very weak.  Likewise the Energy group slipped (acc. -2.2%) though spot oil prices were merely flat.  The Banks sector (+3.8%) was a beneficiary of switching from commodity sectors.

Corporate news on balance lent little support to the rally, with a number of companies guiding expectations lower.  Leighton Holdings unveiled fresh write-downs at problem projects; David Jones guided for a 35-40% profit decline in FY12, well below forecasts; QR National lowered guidance; and Bank of Queensland flagged rising loan losses. Qantas shelved one Asian venture and announced the launch of another.

Economic news

The Reserve Bank left its cash rate target unchanged at 4.25%, as expected. Data on the Chinese economy suggested a slackening of growth momentum; Premier Wen Jiabao appeared to water down any expectation of an early relaxation of measures to cool the property market.  US releases were mostly favourable, notably labour market indicators.  The restructuring of privately held Greek government debt proceeded calmly, although credit default swaps were triggered.  Spanish bonds came under pressure; the government said that it would not be able to meet the EU’s budget deficit target this year.

 

This is general advice only and has been prepared without taking into account your particular objectives, financial situation and needs. Before making any investment decision based on the information or advice contained, expressly or implicitly, in this website, you should assess your own circumstances or seek advice, including taxation advice. To the extent permitted by law, Bridges, its officers, employees, agents, consultants, advisers and representatives are not liable for any loss or damage as a result of any reliance placed on the contents of this website.