It was another busy week in the markets last week, with some merger and acquisition activity, a potential automotive float, embattled iron miners recommencing production, and more.
What's more the S&P/ASX 200 (INDEXASX: XJO) managed to recover some of the ground lost in last week's rout to end 1.5% higher on Friday.
Here's what happened with:
The Budget
Members may have noticed their retail shares soaring after the Federal budget was released on Wednesday. Foolish writer/analyst Mike King wrote about the causes of that and more in his article 'What the Budget means for your portfolio.'
The Banks
Westpac Banking Corp (ASX: WBC) shares copped a beating after the company went ex-dividend, taking its total falls to 16% in the past month. Contributor Owen Raskiewicz reckons that the 'leverage and tax incentives which have been used to fuel Australia's property market… will come home to roost on Australia's big bank stocks'.
97% of institutions took up their entitlements in National Australia Bank Ltd.'s (ASX: NAB) rights issue, and the retail part of the capital raising commenced on Wednesday.
(You can find one Fool's thoughts on whether you should take up your discounted NAB entitlements here).The Miners
Junior miner Atlas Iron Limited (ASX: AGO) has recommenced production at its West Australian mines after a close brush with financial doom recently. Despite lower break-even costs and a potential capital raising, I would steer clear of any iron ore miner that isn't Rio Tinto Limited (ASX: RIO) or BHP Billiton Limited (ASX: BHP).
With that said, even Rio Tinto may not be an appealing buy at current prices. I'm comfortable holding my Rio shares because they are a tiny part of my portfolio, and I believe Rio's market dominance will work in its favour over time.
It's not a risk-free strategy however, and you can see a good breakdown of how the Chinese boom influenced iron ore prices (Rio's main source of income) in this article here.
(More insight on China's ongoing slowdown can be found here)
Healthcare Stocks
Medibank Private Limited (ASX: MPL) shares dropped as low as $2.09, before ending the week at $2.16. Over 50% of Initial Public Offerings (IPOs) drop below their issue price in their first year of trade, and with an issue price of $2 a share, Medibank is still a contender for having its name added to that list.
Other healthcare companies also experienced some wild price swings: ResMed Inc. (CHESS) (ASX: RMD) shares were smashed this week as a clinical trial found that the company's Adaptive Servo-Ventilation (ASV) system may have increased mortality rates in patients, compared to patients in a control group that were part of the clinical trial.
Sirtex Medical Limited (ASX: SRX) shares soared as much as 35.8% on Thursday as the company posted positive results for its liver cancer therapies. However as Brendon Lau points out, Sirtex's results don't appear to tell the market anything it didn't already know.
(Understanding what clinical trials really mean can be a complex and daunting task. I wrote a 3-part article on the subject, which you can read here, here, and here)
The Others
Optus operator Singapore Telecommunications Ltd (CHESS) (ASX:SGT) delivered revenue and profits up 11% and 7% respectively in its quarterly update. The company will discontinue trading on the ASX from May 29; you can find out more in Tom Richardson's article here.
Westfield Corp Ltd (ASX: WFD) posted strong results at its first quarter update on Thursday, with specialty retail sales rising 5.7%. Former Westfield alumnus Scentre Group Ltd (ASX: SCG) reported a similar performance just the week before.
Readers following the tangled Vocus-Amcom-TPG web of intrigue can read Ryan Newman's update of the latest developments in this article. It seems that Vocus Communications Limited (ASX: VOC) has sold its 10% stake in Amcom Telecommunications Limited (ASX: AMM) in order to allow more voters to vote in favour of the proposed merger.
However whether management can actually get enough voters onside to thwart TPG Telecom Ltd's (ASX: TPM) ~19% blocking stake is anybody's guess.
Finally, as part of TMF Australia's mission to 'help Australians invest, better', Foolish writer/analyst Mike King has been writing a series of informative articles for readers. His two latest creations cover Woolworths Limited: an in-depth view and a list of Things to Watch when investigating Listed Investment Companies (LICs).
