Rally continues, BHP delivers record dividend, Challenger profit slumps

The Australian share market is showing few signs of slowing down, delivering another positive day with a 0.6 per cent gain.

Daily moves are being driven by a generally positive reporting season with the materials, up 1.7 per cent, the key winner alongside healthcare and consumer staples.

Both energy and property retreated one per cent amid signs of a reversal in oil prices.

The standout by far was BHP (ASX: BHP) with the slimmed-down company gaining 4.1 per cent and among the biggest gainers, a rare feat given the size of the global giant.

The gain was driven by a record dividend, as booming commodity prices resulted in a US$21.3 billion profit, the second largest in company history.

The final dividend of US$1.75 per share takes the yield beyond 10 per cent and adds to the distribution of shares in Woodside (ASX: WDS) they occurred early in the year.

The result beat all expectations and exceeded the boom times of 2011.

Tassal (ASX: TGR) is set to leave the ASX with Canadian aquaculture firm Cook Inc. bidding $5.23 per share to take the company private; shares were 5 per cent higher.
 
Challenger profits fall on markets, Temple and Webster surges, Goodman delivers
 
Annuity seller and fund manager Challenger (ASX: CGF) was the biggest detractor, with the company falling more than 10 per cent after reporting an unexpectedly weak 57 per cent drop in profit for the financial year.

The key driver was the weak performance in global share and bond markets in the first quarter, which saw unrealised losses booked against profit.

Excluding these volatile inputs, profits gained 20 per cent to $472 million, which supported a 15 per cent increase in the dividend to 23 cents per share.

Online furniture retailer Temple & Webster (ASX: TPW) gained 29 per cent despite the warning of headwinds on current sales and a 17 per cent fall in July volumes.

Double-digit sales growth is expected with profit still anaemic at just $12 million.

Sims Group (ASX: SGM) warned of “soft market conditions” as steel production falls, which came on the back of a 57 per cent increase in revenue for the year.

Profit more than doubled to $578 million but tough times clearly lie ahead.

Seek (ASX: SEK) shares fell more than 5 per cent after the company announced a significant write-down of their global venture capital investments, while profit from the traditional job ads business grew 130 per cent to $240 million benefitting from a tight labour market.
 
Dow hits three-month high, staples jump behind Walmart, economic data mixed
 
The Dow Jones and S&P500 posted another day of strong gains, up 0.8 and 0.2 per cent, with the former hitting 34,000 points once again and reaching a three-month high.

The major contributor was a surge in the retail sector, with consumer staples leading the way behind strong reports from Walmart (NYSE: WMT) and Home Depot (NYSE HD).

The former reported an 8.4 per cent increase in quarterly revenue which sent profit close to 20 per cent higher despite a contraction in margins on the back of higher food inflation.

Grocery revenue accounted for 58 per cent of the total, with advertising jumping 30 and online sales by 12 per cent.

Most impressively same-store sales growth hit 6.5 per cent once again as consumers increased their shopping baskets at the store.

It was a similar story for Home Depot with the home improvement group seeing record sales, after a growth of 6.5 per cent.

In terms of the economy, housing starts sunk 9.6 per cent in July, with building permits also falling while industrial production was better than expected.

Drew Meredith

Drew is publisher of the Inside Network's mastheads and a principal adviser at Wattle Partners.