It was a rough week for the S&P/ASX 200, which lost 2.5% of its value in the past five trading days, lead lower by resource stocks and the banks.
Resource stocks in particular copped a pasting as investors become more aware that low commodity prices are here to stay. BHP Billiton Limited (ASX: BHP) lost 4.4% and Rio Tinto Limited (ASX: RIO) fell 3%, while Woodside Petroleum Limited (ASX: WPL), Santos Ltd (ASX: STO), and Oil Search Limited (ASX: OSH) lost 7%, 16%, and 22% respectively.
Here were some of the major updates released to the market last week:
Woodside Petroleum walked away from its deal with Oil Search after the latter's board declined to recommend the takeover offer, feeling that it substantially undervalued the company. Oil Search shares quickly headed back to the $6 mark (its price before the offer was announced) indicating that perhaps shareholders don't completely agree with management.
South32 Ltd (ASX: S32) shares hit a record low of $1 as investor bearishness about commodities grows. Long-term BHP and South32 shareholders might find this article on BHP's returns to shareholders over the past ten years interesting.
One resource stock that did have a positive week was Northern Star Resources Ltd (ASX: NST), whose shares rose 6% on its plans to mine 700,000 ounces of gold this year, with profit margins of close to A$400 per ounce.
Insurance Australia Group Ltd (ASX: IAG) announced an executive reshuffle in order to better focus the company's priorities going forward. However, the exercise appears to be more of a cosmetic change, and with only minimal changes to the executive team I'm not sure that it'll make a major difference to the company's prospects going forwards.
In other news, Orica Ltd (ASX: ORI) shares lost 4% for the week after a surprise announcement regarding an adverse tax ruling from 2005-2007 revealed the company will take a $36m hit to its profit after tax this year.
Micro-cap stock Mint Payments Ltd (ASX: MNW) soared 49% after announcing a new arrangement with a major south-east Asian telecommunications carrier.
Finally, housing prices could be set to decline further after lending to property investors fell 6.1% in October. This has profound implications for investors who have been stocking up on Commonwealth Bank of Australia (ASX: CBA) and Westpac Banking Corp (ASX: WBC) in recent days – banking is a cyclical industry, and loans to investors have been a major source of earnings growth in recent years. The banks could well head lower.