The S&P / ASX 200 Index (^AXJO) (XJO.AX) has slipped with the big miners and the resources sector dragging down the market, after weak manufacturing data out of China and commodity prices sliding on Friday. The ASX fell 0.8% and closed at 4,888.3, its lowest point since early February 2013.
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Australia?s largest waste management firm, Transpacific Industries Group (TPI.AX) lost 12% to close at 78.5 cents, after the company reported that it was facing difficult conditions and ongoing weakness in manufacturing, industrial and construction activity. Weak landfill volumes are affecting its Cleanaway division, while its Industrials division has been affected by project deferrals across the industrial and mining sectors. CEO, Kevin Campbell also announced his intention to resign. After 60 plus acquisitions in the past decade, debt has ballooned to become a serious problem, while profit margins are extremely low. That suggests that many of those acquisitions have resulted in the destruction of shareholder value.
BlueScope Steel Limited (BSL.AX) lost 5.9% to close at $4.96. Earlier this month, the Australian Financial Review reported that at least 20 local steel manufacturing companies had gone into liquidation or closure in the past 12 months, as a result of the high Australian dollar, unfair import competition and weak construction activity. Bluescope itself faces similar issues and has been trying to turn around its loss-making operations with government assistance. While the Australian dollar?s recent falls will have helped somewhat, rapidly rising labour and energy costs are a major issue for our manufacturers.
Gold miner Kingsgate Consolidated (KCN.AX) saw its shares soar by more than 15%, closing at $1.88. The company today updated its production forecast for its Chatree gold mine in Thailand to between 132,000 and 135,000 ounces of gold for the full year. That was above recent guidance of between 120,000 to 130,000 ounces. Still, Kingsgate shares have a long way to go to reach anywhere near its 2010 high price of more than $12.00.
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The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. Motley Fool writer/analyst Mike King owns shares in Kingsgate.