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The Australian share market closed 0.28 per cent lower, struggling to regain from an opening slump after the CBA record result disappointed those who think the stock may be overvalued.
The S&P/ASX 200 index closed 16 points down to finish at 5,515.
The value of trades was $4.75 billion on volume of 696 million shares at the close of trade. The top three stocks by value were Rio Tinto Limited (ASX:RIO), Commonwealth Bank of Australia (ASX:CBA) and CSL Limited (ASX:CSL).
On the futures market the SPI is 10 points down.
Economic news
Wages growth remains subdued with the latest ABS wage price index showing growth of just 0.6 per cent in the June quarter, 0.1 per cent down from the March quarter. Annual wage growth is now at 2.6 per cent, below CPI of 3 per cent.
And the Westpac-Melbourne Institute is reporting that consumer confidence has returned to pre-budget levels. The index rose 3.8 per cent to 98.5 in August, up from 94.9 in July. Confidence has now recovered nearly 6 per cent in the last 3 months however it has still not regained the levels seen following the change of government.
Company news
Commonwealth Bank of Australia (ASX:CBA) has delivered a record cash profit broadly in line with expectations and lifted its final dividend more than expected. CBA banked profit of $8.86 billion, 12 per cent higher than last year and the largest ever bank earnings reported in Australia. CEO Ian Narev talked down the record result for Australia’s largest bank, sharing a cautiously positive outlook for the current financial year and saying levels of underlying activity confirm the strong foundations of the Australian economy. Shareholders will enjoy a fully-franked final dividend of $2.18 per share, taking the full year payout to $4.01, 10 per cent higher than the year before. However investors seem to have decided that Com Bank is overvalued driving the share price 0.89 per cent lower to $80.96.
Computershare Limited (ASX:CPU) reported an underlying net profit of $362 million, nearly 10 per cent higher than the previous year. The result was in line with expectations and driven by cost reduction and acquisitions. The global share registry company said that despite higher activity in M&A and new listings, registry revenue did not grow due to reduced yields from client balances. Forecast earnings were expected to be lower for 2015, with new CEO Stuart Irving warning the market that despite positive talk around increased merger and IPO activity, risk was high as several recent planned listings have not eventuated. Computershare was also feeling the loss of revenues in its business services division after weak market activity and the loss of a major contract. Shares in Computershare have slipped 6.18 per cent to $11.84.
Suncorp Group Limited (ASX:SUN) has hiked its final dividend to 40 cents and announced a special dividend of 30 cents per share after its net profit soared 49 per cent in the 2014 financial year.
OZ Minerals Limited (ASX:OZL) has forecast higher production over the coming years, trimming its interim loss after revenue jumped 11 per cent.
Primary Health Care Limited (ASX:PRY) improved its annual profit by 8.3 per cent but flagged uncertainty about the Federal Government's proposed co-payments initiatives.
And CSL Limited (ASX:CSL) improved its profit by 7.8 per cent over the 2014 financial year and forecast further profit growth into next year.
Best and worst performers
The best performing sector was health care adding 0.9 per cent to close at 14,457. The worst performing sector was materials, losing 1.1 per cent to close at 10,257 points.
The best performing stock in the S&P/ASX 200 was Slater and Gordon, rising 6.49 per cent to close at $5.58 a day after revealing a 47 per cent rise in net profit. Shares in Bradken and BC Iron also closed higher.
The worst performing stock was Computershare, dropping 6.18 per cent to close at $11.84. Shares in Carsales.com dipped after results disappointed and Mount Gibson Iron also closed lower.
Commodities
Gold is trading at $US1,312 an ounce. Light crude is $0.71 down at $US97.37 a barrel. The Australian dollar is buying 92.96 US cents.
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