SEPTEMBER 2014 QUARTER MARKET OVERVIEW & EARNINGS SEASON REPORT CARD
By Patrick Malcolm
We are pleased to provide an Investment Market Overview for the September 2014 quarter and our Earnings Season Report Card for Financial Year 2014.
The Market Overview gives a snapshot summary of what happened in investment markets during the September 2014 quarter. The Earnings Season Report Card gives an overview of the financial results of Australia’s larger companies for Financial Year 2014 and the outlook companies are providing for Financial Year 2015.
After two years of mainly double digit returns, the September quarter was certainly more subdued, with investment markets having an attack of the “wobbles”, particularly during September, which was the worst individual month since May 2012.
Growth style investors have now had 8 positive quarters in a row, and after two particularly strong years, the chances of some sort of a pull–back have increased.
The Australian share market lost 5.38% during the month of September and that dragged down the return for the quarter, to be slightly negative, but most of the other asset classes made modest gains, with unhedged international shares the absolute standout, because of the significant drop in the Australian dollar.
The major index numbers for the September 2014 quarter are as follows:
| September 2014 Quarter | 12 Months from 30 September 2013 | |
| Australian Shares (S&P/ASX 200 Accumulation Index) | –0.60% | +5.93% |
| International Shares (MSCI World ex–Aus in AUD) | +5.54% | +19.89% |
| A–REITs (S&P/ASX 200 A–REIT Accumulation Index) | +1.06% | +12.19% |
| S&P/ASX Small Ordinaries Accumulation Index | +1.49% | –0.07% |
Other important figures at the end of the September 2014 quarter were:
| 2.50% | RBA cash rate (steady) |
| 2.76% | 90–day Bank Bill Swap rate (up 6 bps for Sept 2014 quarter) |
| 3.51% | 10–year Government Bond rate (down 5bps for Sept 2014 quarter) |
| US$1209.30 | Gold price (down 8.60% for Sept 2014 quarter) |
| US$91.50 | Oil (WTI) (down 13.43% for Sept 2014 quarter) |
| US$77.50 | Iron Ore (down 16.93% for Sept 2014 quarter) |
| US¢87.53 | Australian dollar (down 7.17% for Sept 2014 quarter) |