The Murray Report into financial services in Australia appears to have lent some support to the S&P / ASX 200 (Index: ^AXJO) (ASX: XJO) today as the index climbed more than one percent in early trade. That's a modest gain though compared to several stocks that have come flying out of the blocks on Monday morning. Brighter outlooks based on the changing macro environment are the mains reasons the below have been flying higher.
Qantas Airways Limited (ASX: QAN) has taken to the skies with its shares climbing 30 cents or 14% to a 52-week high of $2.40. Qantas shares caught an updraught after the plummeting oil price effectively slashed the airline's fuel bill. The company also expects to have cut around $550 million in operational costs for the 12 months ending in the first half of FY 2015.
The result is an expected underlying profit in the range of $300-$350 million for the first half of FY 2015. With the share price surge investors may also be dreaming of a dividend payment in the near future. Whether Qantas is appropriate for long-term investors remains questionable, but there's no doubting the big gains made recently.
CSL Limited (ASX: CSL) is up 2.36% this morning to around $88 as it continues to grow its international biopharmaceutical business to stunning effect. The real secret to its success may be the ability to maintain and grow margins thanks to the critical nature of the life-saving products it sells to hospitals and healthcare professionals worldwide.
The potential relevance of leading vaccine and global healthcare businesses like CSL is highlighted by the current Ebola epidemic. CSL certainly looks a stock suited to growth investors and any price weakness looks a buying opportunity.
Somnomed Limited (ASX: SOM) is a sleep treatment business with grand ambitions and growing sales to excite investors. The stock hit a record high of $2.78 this morning and is up around 3.8% for the trading day.
Over 90% of the company's revenues are generated overseas so the weaker Aussie dollar is a strong tailwind. In particular a large proportion of sales are in the giant US market and the business is expecting annual growth rates of 20%-30% if all goes to plan. This looks a speculative growth stock to watch although it is now trading on a big valuation relative to earnings prospects.
Insurance Australia Group Ltd (ASX: IAG) is likely benefiting from the benign looking impact of David Murray's financial system inquiry. The report reportedly made some noise about greater regulation, but otherwise may be an unsurprisingly damp squib in its wider potential to adversely impact large-cap insurance businesses.
IAG and rival QBE Insurance Group Ltd (ASX: QBE) are both up around 3% post-Murray report, with the other likely short-term factor playing out being the recent impact of the Brisbane storm of November 27. After a scare IAG is expecting a net claims cost of between $140-$170 million. These are amounts which will only make a small dent in IAG's natural peril allowance for FY 2015 of $700 million.
