ASX 200 likely to hit a new high today

12 September 2013

ASX 200 likely to hit a new high today

By Chay Flack (Equities Dealer, CMC Markets Stockbroking)

The US market has rallied 135.54 points as the likelihood of a strike in Syria decreases. President Obama stated the he will pursue a proposal by Russia for Syria to surrender its stockpiles of chemical weapons to international authorities. A strike in Syria has concerned investors as increasing the potential drawdown of the Fed stimulus.

Apple fell 5.4 per cent on the announcement of the new iPhone and the “discount version” price point still looks too high for Apple to expand further into China.

The corporate bond market fared well as Verizon commenced selling $45 billion of bonds, the largest corporate bond issue in history to raise funds for the $130 billion Vodafone acquisition. Prior to this the largest offering was by Apple in April earlier this year for $17 billion.

UK’s unemployment rate surprised markets reducing to 7.7% from 7.8% for July, providing evidence the economy is improving. The unemployment rate in the UK peaked at 8.4% in January 2012.

The concern over Syria continues to influence commodity markets, the reduced likelihood of action saw Gold futures remain within a small trading range yet oil futures finished higher as speculators expect volatility to continue.

The Australian futures are matching up 12 points, carried by the US and are likely to challenge the high of 5249.6 set in May earlier this year, needing only 15.2 points to climb from yesterday’s close of 5234.4.

Dick Smith is creating headlines as their private equity owners, Anchorage Capital consider their options to start exiting the business. Investment bankers Goldman Sachs and Macquarie Capital have been appointed, creating speculation of an IPO later this year.

We are seeing plenty of IPO action at the moment as businesses and investors are regaining confidence in the market.
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