Tuesday 18th Sept 2012 (Afternoon)

Not too much movement on the market as a whole today, the ASX200 closed down 7.8 points and traded between 4404 and 4383. FMG announced that they had come to an agreement with their bankers on a debt solution, rolling some of their outstanding debt into a new Senior Secured Credit Facility of $4.5b. This has the advantage of rolling their repayment out to Nov 2015, and also the removal of debt covenants, which were the primary instigator of the previous difficulty. The market promptly responded by sending the stock 17% higher to $3.50.

Value traded was $3,974,153,998 and units traded was 1,607,358,712.

Sector	Up	Down	Unchanged	Total
Industrials	211	252	159	622
Resources	164	179	140	483
Energy	54	76	56	186
Total	429	507	355	1291

Widespread weakness on the back of weak leads out of the US overnight, many stocks were down, but not too many were down strongly.

In the sectorial view we can see:

Security	Description	%	MktCap($)
XHJ	XJO 35 HealthCare	1.2842	$         47,729,970,294.17
XUJ	XJO 55 Utilities	0.4562	$         21,947,027,073.08
XTJ	XJO 50 Telecoms	0.2539	$         53,205,235,900.35
XDJ	XJO 25 Discretion	-0.0158	$         56,058,914,978.66
XMJ	XJO 15 Materials	-0.0433	$      245,833,480,199.66
XXJ	XJO FinxREIT	-0.1762	$      372,239,716,591.44
XJO	S&P/ASX 200	-0.1772	$   1,141,262,776,898.80
XSJ	XJO 30 Staples	-0.2213	$         89,477,942,671.11
XFJ	XJO 40 Financials	-0.2904	$      451,862,022,902.51
XNJ	XJO 20 Industrial	-0.5722	$         79,863,810,096.87
XEJ	XJO 10 Energy	-0.7894	$         87,514,750,515.87
XPJ	XJO A-REIT	-0.8684	$         79,622,306,311.08
XIJ	XJO 45 Info Tech	-1.2029	$           7,769,622,266.53

And the Big Winners today:

Security	Description	Last	+/-	%
IAU	Intrepid Mines	44.5	8.5	23.6111
FMG	Fortescue Metals Grp	350	51	17.0569
LNC	Linc Energy Ltd	74.5	9.5	14.6154
AQP	Aquarius Platinum.	85.5	9	11.7647
MSB	Mesoblast Limited	715	40	5.9259
GBG	Gindalbie Metals Ltd	35	1.5	4.4776
FKP	FKP Property Group	26	1	4
BSL	BlueScope Steel Ltd	39	1.5	4
ENV	Envestra Limited	88	3	3.5294
TPM	Tpg Telecom Limited	214	7	3.3816
CDU	Cudeco Limited	479	14	3.0108
IMD	Imdex Limited	160	4	2.5641
SHL	Sonic Healthcare	1320	32	2.4845
SLR	Silver Lake Resource	360	8	2.2727
MGX	Mount Gibson Iron	90	2	2.2727

And the Losers:

Security	Description	Last	+/-	%
APN	APN News & Media	32	-2.5	-7.2464
WTF	Wotif.com Holdings	411	-32	-7.2235
AGO	Atlas Iron Limited	159.5	-9	-5.3412
TOL	Toll Holdings Ltd	453	-22	-4.6316
SAR	Saracen Mineral	43.5	-2	-4.3956
RMS	Ramelius Resources	46.5	-2	-4.1237
ILU	Iluka Resources	1090	-45	-3.9648
EHL	Emeco Holdings	66.5	-2.5	-3.6232
SIP	Sigma Pharmaceutical	67.5	-2.5	-3.5714
EWC	Energy World Corpor.	42	-1.5	-3.4483
RSG	Resolute Mining	184.5	-6.5	-3.4031
MTU	M2 Telecommunication	343	-11	-3.1073
ACR	Acrux Limited	321	-10	-3.0211
SXY	Senex Energy Limited	70.5	-2	-2.7586
BLY	Boart Longyear	154	-4	-2.5316
FXL	FlexiGroup Limited	319	-8	-2.4465
PDN	Paladin Energy Ltd	141.5	-3.5	-2.4138
GWA	GWA Group Ltd	185	-4.5	-2.3747
MND	Monadelphous Group	1940	-45	-2.267
MRM	Mermaid Marine	304	-7	-2.2508
IFL	IOOF Holdings Ltd	570	-13	-2.2298
MQA	Macq Atlas Roads Grp	156	-3.5	-2.1944
FXJ	Fairfax Media Ltd	46	-1	-2.1277
NWH	NRW Holdings Limited	233	-5	-2.1008
MIN	Mineral Resources.	775	-16	-2.0228
OGC	OceanaGold Corp.	292	-6	-2.0134
CQR	Charter Hall Retail	343	-7	-2

Bounce-Back day in the Health Care sector, with MSB (5.93%) and SHL (2.48%) leading the charge, CSL and COH were also up strongly.

The RBA released the minutes from their last monthly meeting today, and they continued to espouse a conservative approach, with no signs of any immenent action in regard to rates. Whilst I feel that they should cut 25bps at the next opportunity, it would appear that they are waiting for a more substantial and definative catalyst before they take action.

Monetary Policy Statement from Japan, and US Building Permits are due tomorrow, but both are likely to be released after out market closes.

I was having a look at the correlation between various sectors on the ASX200 today, and analysis since 2000 indicates the following:

	XMJ	XEJ	XNJ	XJO	XTJ	XXJ	XHJ	XFJ	XUJ	XIJ	XDJ	XPJ	XSJ
XMJ	100.00%
XEJ	71.39%	100.00%
XNJ	62.78%	58.15%	100.00%
XJO	83.50%	72.81%	81.95%	100.00%
XTJ	27.39%	24.31%	34.63%	44.05%	100.00%
XXJ	56.02%	53.45%	71.20%	86.78%	32.53%	100.00%
XHJ	35.75%	37.79%	47.04%	53.66%	29.86%	45.01%	100.00%
XFJ	57.17%	54.57%	72.68%	88.19%	32.99%	98.63%	46.03%	100.00%
XUJ	40.46%	43.18%	53.34%	57.14%	28.79%	49.40%	39.29%	51.15%	100.00%
XIJ	37.96%	33.17%	46.45%	51.82%	29.65%	41.95%	36.59%	41.89%	37.00%	100.00%
XDJ	49.95%	40.75%	59.59%	71.91%	32.56%	54.65%	40.94%	55.28%	38.91%	43.92%	100.00%
XPJ	41.29%	39.35%	52.60%	61.90%	23.17%	56.42%	33.71%	69.12%	40.10%	26.03%	37.75%	100.00%
XSJ	51.21%	48.24%	61.20%	70.40%	35.99%	60.08%	46.48%	61.20%	47.65%	39.54%	48.12%	43.79%	100.00%

Interesting to see that Telecoms had low correlation with most asset classes, suggesting it’s use as a hedging sector in an equities portfolio. Of course, as goes TLS, goes the XTJ, and it’s possible that this correlation is simply a confirmation of poor performance over the decade, coupled with strong performance by other sectors.  

I did also look at average correlation between sectors over the past year, to see if any other trends have emerged, and it was interesting to see that XTJ was still the lowest correlated sector:

Looking ahead to tomorrow, it would appear that we are in for another down day, with US Futures down, and Europe currently trading down around 1%.