Capio Capital Market Overview and Trade Ideas The Asian market trades firmly in positive territory this morning as China’s exports unexpectedly rose and Australia’s jobs report was a good one. The Nikkei is recovering some of the previous day’s heavy losses on the back of a weaker yen. Automobiles are failing to take advantage of a weaker currency with Toyota scheduled to report later in the day. Softbank traded lower despite reporting profit figures that topped estimates as well as becoming Japan’s top wireless carrier. Strength in commodity prices saw basic material counters lead the ASX with financials also a noticeable gainer. Elsewhere, Vietnamese stocks are coming under pressure as a standoff at sea with China has sparked war fears. US Markets ended the day higher in choppy trade on the back of Janet Yellen’s comments to keep rates lower for longer despite employment and inflation rising . The Nasdaq closed lower but recovered most of its losses. Yahoo fell 6.6% after Alibaba filed plans to list shares in the US. Electronic Arts rallied 21% after results topped estimates while the maker of the Candy Crush game fell after profit declined by 20% . In after-hours trade, Tesla fell after reporting a loss for the quarter while 21st Century Fox, Solarcity & Keurig Green Mountain beat the street. In the UK the easing tensions in Ukraine lifted sentiment with investors digesting a string of earnings releases. Regional bourses closed up with the FTSE a laggard. Shares of Experian slid 6% after their results to weigh on the London bourse with HSBC falling after profit and revenue missed estimates. Increase in AUM benefitted Auto & General with an uptick in passenger traffic lifting EasyJet’s share price. Earlier in the day disappointing industrial numbers hurt the DAX & CAC before ending the day up. On the earnings front, Siemens, Henkel & Credit Agricole topped estimates while Fiat, Commerzbank & Societe Generale disappointed. In local markets the Top40 traded briefly in negative territory before recovering to close the day up (+0.16%) despite global markets losing ground on the back of the OECD’s comments. Resources were the laggard with gold counters the hardest hit (HAR -3.3%, GFI -2.1%). HAR reported a 3Q net income of $3 million. TKG grabbed the headlines after the Fixed Telecoms operator plans to cut up to 40%of its management which the unions later rejected. SLM (-1.2%) underperformed in the insurance space while MDC (+6%) jumped on the back of its trading statement. The Fini15 & Indi25 gained ground. Value traded at 5pm was around R 11.1bn with the currency at R 10.50 vs. the USD. Trade Ideas 1) Long GND from R24.85. We believe share is oversold having been at R28.50 as recently as December 2013. Target R.26.50. Stop loss at R24.30. 2) Long NPN from R1000, with the share trading at R1350 as recently as 11 March 2014 we believe it is oversold, Tencent was down 1.10% for the day. 3) Technical Trade: Short TRU from R87.00, we believe the share is overbought and will test support at R78.
Posted on: Thu, 08 May 2014 07:40:25 +0000