What happened last month?

Over the month, NASDAQ +2.8%, Hang Seng +1.7%, Shanghai +1.4%, S&P 500 1%, TSE +1%, ASX 200 +0.8%, Dow Jones +0.8%, Nikkei +0.03%.

On commodities, Iron Ore -5.4% US$88, WTI Oil -7.7% US$93.7, Gold -1.5% US$1283

Reporting season

We have had a pretty good Australian reporting season with more than 50% of companies reporting results exceeding market expectations.

BHP – result slightly below consensus with no announcement of capital management. BHP expects the $17 billion demerger of non-core assets won’t happen until mid 2015 which creates some uncertainties.

ORG – the stock was up 10% since results. ORG confirmed there will be no immediate equity capital raising and APLNG is on track to produce its first gas in mid 2015. By then, ORG will have plenty of rooms to cut down debts / raise dividends.

CPU – the company slashed FY15 EPS outlook to just 5%. Stock got sold down on high multiples. Further weakness may create an opportunity to us.

WES – we lowered our FY15 & FY16 EPS on the back of weak coal division. The past 12 months have been uncertain for WES, with two key management changes, unscheduled outages, divestments and a deteriorating MET coal price. WES declared total distribution of $2.25 (which include one-off distribution of A$1.00 + special dividend of A$0.10 + final dividend of A$1.05). At last close of $44.70, the dividend yield will be 5%.

CWN – strong result with recovery in domestic market but Latte with Ray continue to receive negative feedback from MPEL (Macau). We will closely monitor the situation.

ANZ - maintained its FY14 earnings guidance despite a weaker-than-expected Australian economy and an outsized 3Q14 seasonal drop in Markets income. We believe ANZ’s 10% discount to its peers is excessive.

BXB – result in line with our expectation but disappointing with “not as strong” FY15 guidance / outlook.

NAB – result in line but the UK continues to be a drag. We’re looking for further details in its October results.

AMP – result beat consensus and saw a bit of turnaround in trouble wealth protection division.

TPI – a significant increase in landfill remediation provision + a weak operating performance = poor price performance.

MFG – result exceeded expectation even without performance fee.

CSL – result exceeded expectation + $1 billion share buyback + guidance of FY15 15% growth.

TLS – result exceeded market expectation + higher dividend at $0.15 + $1 billion share buyback.

JBH – missed expectation. Stock underperformed.

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