A Look Back at 2013 Market Movers
With the final day of 2013 upon us, it’s important to know how the market has travelled in the past year.
The ASX started the year at 4649 points, having seen a 600 point rally from July 2012 on Mario Draghi’s ‘whatever it
takes’ comments to stabilise the Eurozone. The first three months of the year saw an almost 45 degree appreciation angle
as investors piled back into the ASX with renewed vigour as the issues of the past four years started to subside.
Come June, when fears arose about China and its liquidity issues, the market tanked. The Chinese repo rate spiked and
analysts started to question China’s growing debt burden and the likely hard landing it would cause. The ASX gave up
every penny made to drop to an intraday year low of 4632 on June 25. Once these fears dissipated as the PBoC started to
intervene and the central government started to change fiscal laws to allow a slightly more floating market, the
momentum from the start of the year returned and basically carried through to the year end.
The major drivers of the market once again came from the big four banks and major service companies. NAB saw a 39.3%
increase over the year, whilst NCM lost a massive 64.1% since January as the gold miner hit structural issues and a step
gold bear market.
Looking at the ASX 200 more broadly, the top five winners came from retail and service providers, while every loser
except one in the top ten is involved in mining.
The winner of the year (in the ASX 200) is going to be Slater & Gordon, as the law firm saw several major class actions coming to fruition as well as entering the ASX 200 for the
first time which led to index trackers having to add the firm to their respective portfolios. SGH is up 120.3%
year-to-date.
In second place is REA group as the real estate market took off on record low interest rates, seeing the advertisement
of dwelling ramped up coupled with increased subscription and general adverts – REA saw record revenue numbers in 2013;
seeing REA up 108.3% year-to-date.
Third place goes to JB Hifi; the once shortest stock on the market has had a stellar year as the low cost model finally
hit home and management saw margins and revenue returning. The jump in the share price at the start of the year was
dismissed initially, and then on a second wave of positive updates the short positions unwound quickly and drove the
stock higher still. JBH is up 106% year-to-date.
Here are top five winners: 1. Slater & Gordon (+120.28%), 2. REA Group (+108.28%), 3. JB Hifi (+105.4%), 4. Kathmandu Holdings (+105.0%), 5. Magellan
Financial Group (+104.7%).
Conversely, the biggest losers are: 1. Silver Lake Resources (-83.6%), 2. Forge Group (-67.85%), 3. Resolute Mining
(-65.5%), 4. Ausdrill (-64.6%), 5. Newcrest Mining (-64.1%).
So on that note, the ASX is set to finish the year up 15%; an outstanding year by historical standards. However here is
something to considering for 2014; in AUD terms, for 2013 the FTSE (an index with very similar weighing to the ASX) is
up 35%, the STOXX is up 43% and the DAX 53%. I believe the DAX will be the market to be leveraged to again in 2014 as an
improving Europe will see an improving DAX; it also has the added advantage of being leveraged to an improving EUR.
The S is up 52% and NASDAQ is up 60.6% in AUD terms, this suggests one thing: being leveraged to international stocks and
indices is certainly a trade to consider. If you believe the AUD is in a downtrend (which I do), being leveraged to
international plays will have the added benefit of a tailwind exchange rate and better total returns; this is something
to consider for 2014.
Ahead of the Australian open
Like yesterday, trade today will be light – in fact it may actually be the lowest volume of the year considering the
market shuts at 14:10 AEDT including the final crossing.
For the final trading session of the year we are calling the ASX down 11 points to 5345; however the US session was
positive and that may rub off on the local market.
Wishing you all a happy new trading year.
EVAN LUCAS
Market Strategist