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A quick look at 52 week high and low stock prices: December 2010

December 31st, 2010 · Greg Atkinson · 8 Comments

After some promising gains in the first part of 2010 the Australian stock market closed down today to finish the year basically unchanged. In plain English the share market essentially did nothing in 2010 and so if the Australian economy is really booming, then this is not being reflected in the performance of the ASX All Ordinaries or S&P/ASX 200.

The last time I focused on the 52 week stock price high/lows was in August, since then the market has crept up only around 400 points, much of this thanks to the mining stocks.

I had expected a better performance from Australian stocks this year but two major events have kept the market subdued in my opinion:

1. The mining tax debacle which has caused international fund managers to be wary of investing in Australia and;

2. The uncertain political landscape created after the removal of Kevin Rudd as Prime Minister and the close federal election result in late 2010.

I reckon these two issues alone have probably put a drag of around 500 points on the All Ords/ASX 200 – though that is very much a guesstimate of the highest order.

But rather than me starting another rant about how badly managed the mining tax issue has been or how little faith I have in the ALP/Greens alliance getting anything done in 2011 let’s have a look at some stocks and see how they have been tracking since August.

52 Week Stock Prices Highs/Lows
(Last trade/closing prices as of 31st December 2010)
[table “7” not found /]

A closing price in green means the stock is trading higher than last time a check of 52 week stock prices was undertaken. (February 2010) A closing price in red means the stock price has fallen over the same period. A figure in black means the share price is approximately the same as the last review.

Looking at the table above we can see that generally speaking the banks have fallen backwards, the miners have risen and the defensive type stocks like Woolworths and Domino have held up pretty well.

Remember that in general even in a recession, people need to eat and buy groceries so companies in this area tend to do better than say firms that sell things we can do without such as a flatscreen TV’s. Hence the reason Harvey Normal shares are not doing well and Gerry Harvey has been spitting the dummy about online retailers.

It’s not much point reading too much into the Telstra share price since the company is caught up in Senator Conroy’s National Broadband Network (NBN) debacle. It seems being a blue-chip Australian company is risky business this days as the banks and miners are also in the Government’s firing line.

I know it’s popular to pile scorn on company’s that make big profits but what would people prefer..companies that lose money? Listed companies in Australia that make big dollars pay big taxes and return money via dividends, salaries, capital investment and bonus payments etc. If we want the economy to grow then companies need to make profits, it’s pretty simple.

Besides, if people want to tap into company profits more directly then they could buy shares rather than taking an overseas holiday. That’s the way free markets work. Being investor is often better than just being a consumer.

The listed investment/wealth management companies in the table above have had a pretty poor year after starting off well in early 2010. It doesn’t look like much money is flowing into stocks and with interest rates high, I doubt many people are too keen to take out a margin loan to boost their shares portfolio.

All in all I would say that the performance of the stocks above reflects what is happening across the wider Australian economy in that basically only the mining companies seem to have had a reasonably good 2010.

Anyway that is it from me for 2010. Happy New Year to all and let’s worry about stocks again sometime in January!

8 responses so far ↓

  • 1 Jason D // Jan 1, 2011 at 8:25 am

    Thanks for the comments Greg, always an interesting read and I agree the mining tax and the Labour Government in general has a lot to answer for with their half baked ideas and policy

  • 2 Greg Atkinson // Jan 1, 2011 at 8:40 am

    Hi Jason. Happy 2011. The political landscape in Australia is not helping the stock market that is for sure. I think one way or another the decks need to be cleared and we see another election where either party has a clear majority and mandate.

    The mining tax is a mess because nobody knows what the rules are any more. We also have the Henry Tax review just sitting out there it buried or will parts of it pop up again? Who knows?

    It’s going to be an interesting 2011 that’s for sure!

  • 3 Vince. L // Jan 1, 2011 at 9:12 am

    The mining and commodities related stocks do seem to be holding up the stock market but even so, I think our market lagged the US market in 2010. I guess the proposed banking reforms won’t help bank stocks in 2011.

  • 4 JasonD // Jan 1, 2011 at 9:14 am

    Don’t forget Banking and the Future of Financial Advice reform which affect my industry directly also appear to be half baked with little fundamental reform actually taking place

    Also look at the mining stock over the last 3 to 4 months their price has stayed mostly stable when most commodity prices have had significant rises.

  • 5 JasonD // Jan 1, 2011 at 9:26 am

    I think i better leave this discussion it really gets my blood boiling about this topic and the half baked policy.

  • 6 Greg Atkinson // Jan 1, 2011 at 9:37 am

    Jason I agree with you regarding the policy mess in Australia at the moment. I am not sure what the government is trying to achieve apart from causing confusion on multiple fronts.

    About the only person who thinks Government policy has not affected the mining stocks is David Koch of Sunrise fame…enough said really.

    I wonder what ever happened to all those Australia 2020 Summit recommendations?

  • 7 Senator13 // Jan 1, 2011 at 11:13 am

    We are now up to mining tax mark III and it still does not look final.

    We have a carbon tax on and off and now it looks to be on again.

    I don’t know how any one would find Australia as a good place to do business at the moment.

    Gillard changes policy direction with every new poll. It is a bit of a mess.

  • 8 Vince. L // Jan 3, 2011 at 11:28 pm

    I wonder if we will see Gillard push for a tax on overseas online retailers? Anything goes at the moment.

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