Investment Matters

What matters this week: Coca-cola. Ten. Wesfarmers. Qantas.

Although the market is bumping up against the 6000 mark, it was a week of quite negative company news.

Coca-Cola Amatil's share price fell 3% this week, following last Friday's earnings downgrade.  Structural challenges (people are cutting back on sugar laden beverages) are leading to a more competitive environment - with 'volume and price pressures', and thus earnings are expected to decline for the current half year.  After last Friday's 11% fall, and downbeat broker reports on Monday, the company's share buy-back kicked back in, containing falls this week.

Ten Network is facing structural challenges of its own.  Although ratings are relatively improving (versus Nine and Seven), advertisers are putting real pressure on the company's bottom line.  The company has flagged its needs a refinancing in order to continue to be viable.  Its share price fell 19% after the announcement, continuing a long term share price decline.

The golden years of Wesfarmers' Coles division - the source of the majority of its earnings - are all but over.  A resurgent Woolworths, along with other competitive pressures (e.g Aldi) resulted in flat sales FYTD.  Target continues to be challenged, but Kmart achieved reasonable sales growth.  Bunnings and Officeworks both had strong sales growth, with the latter being a positive in the lead up to its possible IPO/spinoff.

On a more positive note, Qantas' share price went up 6.8% because...  well there is no official announcement.   It's going to fly Perth to London non-stop, from May-18.  Qantas has a PR department almost as big as the big banks.

And finally this week, the takeover of energy utility owner Duet is a done deal, well almost - court approval is expected today.  The $7.3 billion price offered by the Singapore-based CKI and partners was approved by shareholders and the deal approved by the Treasurer under foreign takeover regulations.