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to the September edition of Hill Rogers Spencer Steer Financial Services Monthly Update. |
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Please contact Richard McGrath on 9232 5111 should you wish to discuss any points covered. |
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Monthly Update
September 2011 |
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Market Moves - as at 30 September 2011 |
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Returns (%) p.a |
1 mth |
3 mth |
6 mth |
1 yr |
3 yr |
5 yr |
10 yr |
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Australian Equities |
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S&P/ASX 300 Accumulation Index |
-6.28
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-11.65
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-15.41
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-8.71
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-0.10
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-0.71
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7.25
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S&P/ASX Small Ordinaries Accumulation Index |
-10.61
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-11.79
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-20.01
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-12.11
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-0.14
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-2.27
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8.19
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Global Equities
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MSCI World Acc Index with Gross Div (A$)
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0.72
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-8.04
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-10.57
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-4.20
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-6.26
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-6.74
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-2.59
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S&P 500 Composite Accumulation Index (A$) |
2.45
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-5.12
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-8.26
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0.76
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-5.58
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-6.27
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-3.92
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FTSE 100 Accumulation Index (A$) |
0.43
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-6.94
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-8.55
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-5.86
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-6.00
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-7.89
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-2.21
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MSCI Emerging Markets Free W/Gross Div ($A) |
-5.86
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-14.58
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-18.35
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-16.21
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-0.57
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-0.24
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8.79
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REITS (Listed Property Securities) |
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S&P/ASX 300 A-REIT Accumulation Index |
-4.58
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-8.15
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-8.59
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-6.29
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-11.68
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-13.59
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0.80
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UBS Global Real Estate Inventor Index (A$)
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-9.71
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-14.32
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-10.61
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0.99
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-2.28
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-4.73
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n/a
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Fixed Interest |
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UBS Warburg Composite Bond Index
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0.90
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4.63
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7.07
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9.04
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7.82
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7.04
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6.22
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UBS Warburg bank Bill Index
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0.39
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1.24
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2.48
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5.02
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4.54
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5.56
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5.44
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BarCap Global Aggregate Index Hedged $A
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1.05
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4.28
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7.28
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7.79
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10.25
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8.53
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8.02
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Data Source: IRESS, Perpetual Funds Management, Morningstar, Lonsec, Returns greater than one year are annualised
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Economic indicators released in September were mixed. Australia’s jobless rate has remained steady at 5.1% in August, as the economy lost 12,600 full time jobs, with an increase of 2,900 in part time jobs. The ANZ Job Advertisements Series fell 0.6% in August, to be 6.1% higher than 12 months ago.
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Retail sales rose 0.6% in August, seasonally adjusted, following a rise of 0.6% in July and a fall of 0.1% in June. Other retailing (0.8%), food retailing (0.4%), and cafes, restaurants and takeaway food services (0.4%) improved, whilst clothing, footwear and personal accessory retailing (-1.4%) and department stores (-0.5%) fell.
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Building Approval figures, seasonally adjusted, rose 11.4% in August, after a rise of 1.8% in July 2011. Private sector houses approved fell 1.0% and other private dwellings, which include apartments, rose 35.1%, seasonally adjusted.
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The TD-Securities Melbourne-Institute Monthly Inflation Gauge rose 0.1% in September, following a 0.1% fall in August. Fruit and vegetables were cheaper, along with motor vehicles and dairy products; however prices rose for automotive fuel. The gauge has risen 2.8% in the 12 months to September.
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Whilst inflation had started to increase earlier in the year, softer labour market conditions indicate that inflation may ease, which would increase the chance of a monetary policy easing. The RBA Board also noted that financial conditions are easing, but asset prices have declined and credit growth is low. The Board believes that the current mildly restrictive stance of monetary policy remains appropriate; however the Board will continue to carefully assess the evolving outlook for growth and inflation.
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Economic indicators released in the US in September were mixed. Inflation in the US strengthened 0.4% in August, with food prices posting their biggest gain since March, rising 0.5%. Gasoline prices also rose sharply, gaining 1.9%. The annual inflation rate increase to a year-on-year rate of 3.8%. Core inflation, excluding food and fuel, rose 0.2% after increasing 0.2% in July. For the 12 months to August, core inflation was 2.0%, the largest gain since November 2008.
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The US Labor Department reported that the unemployment rate was 9.1% in September, with 103,000 non-farm payrolls positions added during the month. Since April, there has been an average of 72,000 new jobs created per month. Employment in professional and business services increased by 48,000 last month, and the construction sector also grew, creating 26,000 jobs.
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Manufacturing in the U.S. increased sharply in September, boosted by gains in exports and production. The Institute for Supply Management’s factory index grew to 51.6 last month from 50.6 in August. A level of 50 is the dividing line between growth and contraction. Growth in emerging economies and a rebound in Japan after the March earthquake contributed to growth.
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The Australian dollar (AUD) sharply depreciated against the US dollar in September, falling 8.51% and finished the month below parity at US$0.9781. The AUD was lower against other currencies, falling 2.63% against the Euro, 4.38% against the British pound sterling, and 8.52% against the Japanese Yen.
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The Australian share market fell sharply in September, with the S&P/ASX 300 Accumulation Index losing 6.28%. The S&P/ASX Small Ordinaries Accumulation Index also fell in September by 10.61%, underperforming the large cap market. The small cap market also underperformed the large cap market over the 12 months to September, registering a loss of 12.11% compared to a fall of 8.71% for the large caps.
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Global equities relatively flat in Australian dollar terms. The MSCI World Accumulation Index rose 0.72%, assisted by the weak Australian dollar. The S&P 500 Composite Accumulation Index (A$) and the FTSE100 Accumulation Index (A$) also rose, gaining 2.45% and 0.43% respectively in AUD terms.
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Emerging Markets fell in September, despite the weak Australian dollar, with the MSCI Emerging Markets Free W/Gross Div (A$) falling 5.86%. The Index has fallen 16.21% over the past 12 months, underperforming developed equity markets, represented by the MSCI World Accumulation Index.
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Asian markets were weaker in September. In Japan, the Nikkei lost 2.85% for the month, while in Hong Kong the Hang Seng fell 14.33%. The Shanghai Composite was also weaker for the month, falling -8.11% in local currency terms. In Europe, major markets fell sharply on the back of ongoing macroeconomic weakness. The German DAX index fell 4.89% while the French CAC40 lost 8.44% in local currency terms.
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The S&P/ASX 300 A-REIT Accumulation Index fell 4.58%, outperforming the broader domestic equity market for the month. Overall, the S&P/ASX 300 A-REIT Accumulation Index lost 6.29% in the 12 months to September, outperforming the broader market.
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The Australian bond market was stronger in September, as market sentiment remained weak in Australia and European sovereign and US recession concerns lingered. The UBS Warburg Composite Bond Index rose 0.90% in September, while the UBS Warburg Bank Bill Index rose 0.39%. Over the 12 months to September, these indices returned 9.04% and 5.02% respectively.
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T. +61 2 9232 5111
F. +61 2 9233 7950 |
Level 5, 1 Chifley Square
Sydney NSW 2000 Australia |
GPO Box 7066
Sydney NSW 2001 |
www.hr-ss.com.au
broker@hr-ss.com.au |
Hill Rogers Financial
Services Pty Limited |
ABN 40 101 865 598
AFSL 289 009 |
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Member of KS International, an association of global independent accounting firms |
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Disclaimer
The material contained in this publication is general commentary only for distribution to clients of Hill Rogers Spencer Steer. None of the material is, or should be regarded as advice. Accordingly, no person should rely on any of the contents of this publication without first obtaining specific advice from Hill Rogers Spencer Steer. Hill Rogers Spencer Steer, its Principals and agents accept no responsibility to any person who acts or relies in any way on any of the material without first obtaining such specific advice.
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