Investor appetite for the big four banks and the resource giants kept the market relatively buoyed this week but belied the flurry of share price movements in the healthcare and gambling sectors.
The benchmark S&P/ASX 200 Index and the broader All Ordinaries Index closed each closed down 0.2 per cent to 5430.3 points and 5513.9 points respectively.
"A strong US dollar is driving the commodity complex down at the moment," said Romano Sala Tenna, portfolio manager at Katana Asset Manager. "And it's a critical time for banks, over the next couple of weeks there will be a lot of news flow from their half yearlies. Looks like most people are sitting on the sidelines now."
The big four banks finished the week slightly higher and BHP also found some support, though Rio Tinto closed the week just down slightly.
Healthcare stocks were savaged on Friday, thanks to a poor operational update from Healthscope. The stock plunged 19 per cent and finished Friday at $2.38. Other healthcare providers were caught up in the damage, with Ramsay Healthcare dropping 5.8 per cent to close at $74.80 on Friday and IVF providers Virtus and Monash were down 4 per cent and 1.7 per cent respectively. Healthscope blamed its poor performance on public concerns about healthcare affordability.
The big deal for the week was the $11.3 billion merger between Tabcorp and Tatts Group, where the Melbourne-based Tabcorp agreed to pay a 20 per cent premium for Tatts shares. The Tatts shareprice rocketed higher and closed up 15.11 per cent to $4.19 and Tabcorp was up 1 per cent to $5.01.
Crown shares had a tough week, with investors sending the stock tumbling 14 per cent on Monday after the news that 18 of Crown's employees had been arrested in China broke. Investors cautiously bought the stock over the rest of the week, but Crown's price is still closed the week down 15.7 per cent on Friday at $10.92.
Investors also fled fellow entertainment business SkyCity Entertainment after the company released a downbeat update. Shares finished the week 18.9 per cent down to $3.53.
Australia's largest oil producer Woodside reported this week, announcing record production at its North-West Shelf and Pluto projects. Investors were initially pleased with the news, though the stock finished the week 0.8 per cent lower to $29.30.
Santos reported on Friday and advised it has started to hedge its oil production to reduce the impact of a volatile oil price. The oil and gas producer lifted revenues in the September quarter to $US650 million, 11 per cent higher than a year earlier, boosted by a 31 per cent jump in volumes sold. Investors were pleased and the stock closed up 3.5 pe cent to $3.84 for the week.
Nintendo shares dropped after the company's new gaming platform Switch failed to impress investors.
The long-awaited device, featuring a tablet-like console that will let gamers play at home and on the go, was unveiled in a three-minute video released late Thursday. The Kyoto, Japan-based company showed gamers using the new system to play in their living rooms, but also detaching a part of it to continue playing at an airport, in a car and at a barbecue.
"It's a disappointing console," said Amir Anvarzadeh, Singapore-based head of Japanese equity sales at BGC Partners. "It doesn't enhance the gaming experience when you have a smartphone in your pocket."
Nintendo showed several titles from its flagship franchises, including Zelda, Super Mario, Mario Kart and a basketball game. The company reiterated in the video that the new system, originally dubbed NX, will be released in March. A price wasn't disclosed.
Shares in Tokyo fell as much as 5.2 per cent, erasing the previous day's rally that was triggered by news that the promotional video would be released.
The video focused squarely on the millennial demographic, young adults in their late 20s early 30s. This suggests a departure from Nintendo's mission of making games for the whole family. The difference is particularly clear when compared with a video introducing the Wii more than a decade ago, which features grandparents playing along with kids.
The company is trying to carve out a niche between casual smartphone gamers and more serious players who use consoles such as Sony's PlayStation 4, according to Niko Partners analyst Daniel Ahmad.
"They've certainly found their place in the market and this is the most logical thing for Nintendo to do," said Ahmad, who covers the game industry.
The new device features a tablet-like display unit that can dock at home and connect with the TV, or be taken out and about with two detachable controllers for multi-party play. Nintendo president Tatsumi Kimishima said in April that "it will allow for a whole new way to experience hardware and software together."
Fruit and vegie processor SPC Ardmona, which was acquired by Coca-Cola Amatil for $700 million in 2005, could be back on the market next year.
Coca-Cola Amatil group managing director Alison Watkins told investors today that while the bottler remained committed to SPC for the time being she would review the investment next year when a three-year co-funding agreement with the Victorian Government came to an end.
When Watkins took the helm in 2014 she said CCA had no plans to sell SPC, even though her predecessor Terry Davis had cleared the decks by writing down SPC's goodwill by $400 million.
However, since then SPC has slumped back into the red and its core categories - packaged fruit and vegetables - are under pressure from cheap imports, private labels and changing consumer tastes.
Unfortunately for SPC, tinned peaches with ice cream is no longer as popular a dessert as it was forty years ago.
CCA will likely undertake a strategic review of SPC next year and consider its options.
"It's a logical point for us to take stock," Watkins told The Australian Financial Review's Street Talk column.
"We've committed for three years, we're two years into that period and our focus is on continuing to reinvent that business."
"I'm looking forward to some good momentum over the next 12 months."
Heinz and Simplot have been touted as possible buyers in the past, but given the level of Asian interest in clean, green Australian food assets it would not be surprising if SPC attracted interested from Chinese, Philippines or Singapore-based buyers.
CCA shares are unmoved by the news, trading up 0.2 per cent at $10.08.
Struggling children's clothing retailer Pumpkin Patch, which has dozens of stores in Australia, is fighting for survival.
The New Zealand-based company has entered a trading halt after informing the market that it was "highly unlikely that there is any residual value in the company's equity."
After years of declining sales Pumpkin Patch has seen its market capitalisation dwindle to just $10.1 million from a valuation of $NZ231 million ($216 million) in 2013.
Its second-biggest shareholder is Jan Cameron, the co-founder of NZ adventure-wear retailer Kathmandu.
On Friday, Pumpkin Patch told shareholders that "substantial uncertainty" remained regarding its future and it would put forward proposals to its bank by October 31.
"Shareholders should note that it is highly unlikely that there is any residual value in the company's equity."
The news comes as rival Baby Bunting, Australia's biggest baby goods chain, plans to ramp up store openings. Baby Bunting's first year on the sharemarket was helped by the collapse of its major competitor, My Baby Warehouse, which gave Baby Bunting a dominant position in the highly fragmented $2.4 billion baby goods market.
Other baby-focused retailers to have collapsed in recent years are Babyco and the Australian arm of British giant Mothercare, thanks to slowing sales, tough trading conditions, writedowns and restructuring costs.
Early last year Pumpkin Patch put itself up for sale.
But that sale did not proceed, and the company instead planned a four-year turnaround program, which includes store closures and focusing on online sales.
Reporting a deeper loss of $15.5 million for the year to July 31, 2016, Pumpkin Patch said it was at a "very early stage of its recovery journey" and "apparel retailing continues to be highly competitive and challenging."
China's overheated property market is showing tentative signs of cooling, as authorities stepped up home-buying curbs to avert a housing bubble.
New-home prices, excluding government-subsidized housing, gained last month in 63 of the 70 cities the government tracks, down from 64 in August, the National Bureau of Statistics said. Prices dropped in six cities, compared with four a month earlier. They were unchanged in one.
The real estate market "apparently cooled" in October on targeted measures rolled out in first-tier and some second-tier cities, the statistics bureau said in a statement. New-home prices in Shenzhen, the nation's hottest property market earlier in the year, fell 0.3 per cent in the first half of October from a month earlier, the bureau said. Prices in some other cities declined between 1 per cent and 3.8 per cent, it said.
Local governments in at least 21 cities have in recent weeks introduced property curbs, such as requiring larger down-payments and limiting purchases of multiple dwellings in a bid to cool prices.
New-home prices in Beijing fell 3.7 per cent in the first half of October from September, the bureau said, after the municipality increased down-payments for first-time home buyers. Home prices in the capital jumped a record 4.9 per cent in September, Friday's data showed.
Prices in the financial hub of Shanghai fell 2.5 per cent in the first two weeks of October, after jumping 3.2 per cent in September.
A cooling in the property market may provide some relief to policy makers, who are seeking to avert a potentially ruinous housing bubble without killing one of the economy's main pillars of growth. A buoyant property industry helped the world's second-biggest economy grow 6.7 per cent in the third quarter from a year earlier.
"These curbs only aim to rein in the home-buying panic and to stem the bubble, instead of being an all-round shackling on the property market," Wang Tao, chief China economist of UBS in Hong Kong, said before the data was released. "The possibility of a home-price plunge is low."
The curbs introduced so far are likely to have only a mild impact, she said.
"The most powerful property control is credit tightening, which we haven't seen," Wang said. "The purchase restrictions currently imposed can still be bypassed."
Citi's global head of equity strategy reckons shares are the "last honest market left", writes your Ed:
What if financial markets aren't as crazy as people say they are? How's that for a contrarian investment view: the world is not insane.
"There is a lot of talk about the distortion being imposed on capital markets by central bank policy," Citigroup global head of equity strategy Robert Buckland says.
He doesn't deny that this is happening. But: "I would argue that [stocks] are the last honest market left".
In recent years, listed companies have shown a powerful preference to paying out cash to shareholders over reinvesting in their own businesses.
This phenomenon has been decried by the many policymakers and politicians desperate to kick-start wallowing economic growth by getting bosses to start spending and hiring.
Fifteen years ago, listed US companies reinvested twice as many dollars into their businesses as they distributed to shareholders. Today that ratio is more like one-to-one.
This marks a "profound change in the US away from capital investment to capital distribution," Buckland says.
Buckland, who spoke this week at Citi's investment conference in Sydney, says what companies are doing may not be desirable, but it makes perfect sense.
And this is where his "last honest market" comment comes in.
"What the stockmarket has seen is a problem: excess capacity," he says. "We have been bitterly burnt by excess capital expenditure by all sorts of companies over the past 10 or 15 years."
"The last one that we endorsed and blew a lot of money on was of course the commodity sectors, but before that was emerging markets, and before that was tech and telecom of the late '90s."
"So I think that what's going on here: the last honest market left – the stockmarket – is trying to do an honest job of closing deflationary capacity in order to improve returns."
This "capex cynical" trend is manifested in market prices by investors placing more value on a dollar returned to them than on a dollar reinvested. It's why global sectors such as consumer staples, healthcare and IT have traded at extremely high multiples.
They are cash cows, and shareholders love it.
Coca-Cola Amatil is taking the knife to costs, adding another $100 million to its original cost savings target of $100 million, to boost earnings and fund investment in price, marketing and a wider portfolio of new beverage products including Ginger Coke.
At an investor strategy day in Sydney, group managing director Alison Watkins reiterated her target for mid-single digit earnings per share growth – despite the imminent introduction of container deposit schemes in three more states – underpinned by revenue growth and cost savings, working capital management, partnerships and bolt-on acquisitions.
Ms Watkins said CCA was targeting low single digit EBIT growth from developed markets of Australia and New Zealand, double-digit EBIT growth from developing markets Indonesia and Fiji, and double-digit EBIT growth from alcohol and coffee and food processor SPC.
Ms Watkins and CCA's Australian Beverages boss, Barry O'Connell, told investors that CCA was ahead of schedule on its 2014 plan to cut costs by $100 million over three years by rationalising manufacturing, distribution and support services.
"We'll deliver on the $100 million cost optimisation target in 2016 ahead of schedule," Ms Watkins said.
The bottler had also identified at least an additional $100 million in cost savings opportunities, with 300 separate initiatives underway, mainly in supply chain and distribution, merchandising and support services.
"The intention is to reinvest it back into the business," said Mr O'Connell.
CCA did not issue a formal update, but said trading conditions remained challenging in Australia and Indonesia.
Ms Watkins said CCA had reiterated her mid-term guidance for mid-single digit earning per share growth, notwithstanding talk of a sugar tax and the introduction of container deposit schemes in NSW in July 2017, and in Queensland and Western Australia in 2018.
Ms Watkins also flagged plans to further reinvigorate CCA's product portfolio, adding new products including low and no-sugar beverages, stills and carbonates.
CCA plans to launch Ginger Coke in the next few weeks and more Coke variants are in the pipeline.
CCA shares are up 0.4 per cent at $10.10.
A casual glance at the scoreboard and the 4-point fall in the ASX 200 index to 5438 would suggest not much is happening on the bourse today, but nothing could be further from the truth.
A number of healthcare have been shook by the massive drop in Healthscope, which is down 18 per cent after a poor operational update. The hospital operator blamed a surprise reduction in patient visits on public worries around healthcare affordability. Ramsay Healthcare has been caught up in the backwash, dropping 5.5 per cent.
IVF providers have also been affected, given they are considered by investors to rely on more "discretionary" healthcare spending: Virtus is off 4.9 per cent and Monash 1.3 per cent.
Meanwhile, worries around the recent arrests of Crown employees in China look to have percolated into the response by investors to SkyCity Entertainment's downbeat update: the stock is down 12 per cent and on track for its worst day in its 20 years as a listed company.
So with all this going on, why isn't the market lower?
Well, the big names are higher, which is steadying the ASX ship. BHP is up 0.8 per cent and Rio 0.2 per cent. Westpac is up a generous 1.2 per cent, ANZ 0.8 per cent, CBA 0.4 per cent and NAB 0.2 per cent.
Woolies is now up 1.5 per cent, while Wesfarmers is down 0.2 per cent, with Telstra off a similar amount.
As investors gear up for a slew of banking results, Deutsche Bank is urging clients to look again at the fundamentals of the market's heavyweight sectors.
"It's actually not all that rare for resources and banks to outperform together," says Tim Baker, equity strategist at Deutsche Bank.
It's a common view that investors must either tilt towards financials or resources, but not to both at the same time, as they are thought to move inversely, but Mr Baker says the fit isn't particularly tight, leaving room for share prices in both heavyweights to trade higher together.
After crunching the numbers, he found banks and resources only tend to perform well together around one fifth of the time, and if one sector is outperforming, the other joins it between 35-39 per cent of the time.
"But the last four years have been unusual," says Mr Baker. "With resources and banks rarely outperforming together."
Prior to 2011, they beat the market together 25 per cent of the time, but in the last four years they've only managed 5 per cent.
"Normalisation may be due," says Mr Baker, who points out that the two sectors' share of the market, while still large, has only been lower during the tech boom. This makes it easier for investors to be positioned in both, and rotations into these sectors could drive share prices.
While investors fret over lofty valuations of shares worldwide, Mr Baker suggests Australian resources and banks look less extended than, say, industrials.
"Resources and banks look cheaper than the rest of the market with their trailing price-to-book ratios sitting below long-run average," he says. "In contrast, the price-to-book ratio for the rest of the market is 10 per cent above average."
Worldwide wine production is expected to fall this year to its lowest since 2012, chiefly due to adverse weather that sharply cut output in France and South America, according to wine body OIV.
Global wine output is set to decrease by 5 per cent compared with last year to 259.5 million hectolitres (mhl), one of the three smallest volumes since 2000, the Paris-based International Organisation of Vine and Wine (OIV) said in preliminary estimates for this year.
An expected 12 per cent drop in French production, to 41.9 mhl, and steep declines in Chile (-21 per cent to 10.1 mhl), Argentina (-35 per cent to 8.8 mhl) and Brazil (-50 per cent to 1.4 mhl) accounted for most of the projected global fall, the OIV said.
South Africa was also expected to see a sharp decline in output, losing 19 per cent to 9.1 mhl.
A hectolitre represents 100 litres, or the equivalent of just over 133 standard 75 cl wine bottles.
In contrast, Australia is forecast to produce 5 per cent more or 12.4mhl and New Zealand output is poised to surge 34 per cent to 3.1mhl, which is near the record high it set in 2014.
A plunge in French production has been widely anticipated after vineyards endured frost and hailstorms in spring and then drought during summer.
The smaller French output should allow Italy to maintain its position as the world's largest wine producer with an expected 48.8 mhl, although this would be slightly below an estimated 50.0 mhl last year, the OIV said.
Qantas says it will keep a tight focus on costs and ensure capacity matches demand as intense competition on international routes means travellers are benefiting from cheaper fares than a year ago.
Speaking at the annual meeting, Qantas chief executive Alan Joyce told shareholders that the airline would "stay disciplined on cost, manage our capacity to match demand, and secure the benefits of cheaper fuel through careful hedging".
"Like most other global carriers, intense competition on international routes means we're seeing air fares below where they were 12 months ago," he said at the meeting in Sydney.
"And the economic transition in Australia and broader geopolitical issues in the northern hemisphere continue to have an impact on aviation markets globally."
In what has been termed a "golden era of travel", Flight Centre has also said airlines have been chasing market share on international routes, leading to record low fares to London and other top destinations.
Qantas chairman Leigh Clifford said the global economic recovery and geopolitical environment remained volatile, while the domestic economy had been subdued in the wake of the end of the mining boom.
"Beyond immediate challenges, the long-term growth trend for aviation is positive. Globally, the number of air travellers is forecast to double by 2034, reaching 7 billion," he told shareholders. "Qantas is well-placed to capitalise on these opportunities."
Last week Qantas announced that it will resume flights between Sydney and Beijing in January, more than seven years after it axed services to China's capital.
The return to the route comes ahead of Virgin Australia's plans to launch services to Beijing and Shanghai next June. Australia's two largest airlines are eager to tap into opportunities in China, which is Australia's fastest-growing inbound travel market.
Macquarie analysts also said on Friday that Qantas stood to benefit from strong growth in visitors from Japan and the US. About 40 per cent of Qantas and Jetstar's combined international capacity is devoted to routes to those two markets.
Qantas shares are down 0.6 per cent to $3.24.
Santos has advised it has started to hedge its oil production to reduce the impact of volatile prices as it reported a lift in September quarter sales thanks to higher volumes.
A surge in LNG sales has helped Santos to more than offset the impact of softer prices in the three months to September, while spending has again been ratcheted down in line with the depressed commodity market.
The oil and gas producer lifted revenues in the September quarter to $US650 million, 11 per cent higher than a year earlier, boosted by a 31 per cent jump in volumes sold.
RBC analyst Ben Wilson described the quarter as "solid".
Meanwhile, full-year guidance on both costs and capex have been reduced, as new chief executive Kevin Gallagher gets to work to refit Santos for a low oil price environment.
Guidance on full-year production has been narrowed to 60 million-62 million barrels of oil equivalent.
"We are taking the right steps to ensure Santos becomes a strong and sustainable business, and that mindset guides our decision making as we continue to reduce costs and maintain a strong capital discipline," Mr Gallagher said in this morning's quarterly report.
Production costs for the full year are now expected to be $US9-$US9.50 per barrel. The capex budget for 2016 has been reduced to $US700 million, from $US750 million.
Mr Gallagher noted Santos's decision to start oil price hedging in order to reduce the impact of price volatility, as anticipated by many in the market.
RBC analyst Wilson said the market would like Santos's initial foray into the oil hedging market, but noted that some would think it "too little too late".
He noted that at RBC's forecast price for Brent for 2017 or $US58 a barrel, the hedging program would have no impact, but said that most "will see the hedging move as more signs of capital stewardship" under Mr Gallagher.
Santos's LNG sales volumes more than doubled from the third quarter last year, to 755,000 tonnes, reflecting the ramp-up of its $US18.5 billion GLNG venture in Queensland and the outperformance of the ExxonMobil-managed Papua New Guinea venture, as revealed earlier this week by Oil Search.
Santos shares are 0.4 per cent higher at $3.84.
Australia just found out the price of blocking foreign investment.
The NSW state government announced on Thursday it had sold a 50.4 per cent stake in Ausgrid to two local superannuation funds in a deal valuing the entire company, including debt, at about $20.8 billion. Two months earlier, the federal government barred NSW from accepting an offer from State Grid Corp of China that was said to value the power network at about $25.1 billion, citing national security concerns.
The difference shows the cost to the nation of limiting ownership of sensitive infrastructure to local buyers, amid public opposition to overseas investment, particularly by state-owned Chinese firms. The Ausgrid sale has also raised doubts about Australia's openness to foreign investment and caused confusion about its regulatory regime.
The process "was not run as well as it could have been," said Hans Hendrischke, a professor at the University of Sydney Business School who specialises in Chinese investment in Australia. "It possibly has cost the government a considerable sum of money."
AustralianSuper, the nation's biggest super fund, and IFM Investors, the largest manager of infrastructure assets, agreed to pay about 1.4 times Ausgrid's regulated asset base value, according to Brett Himbury, the chief executive officer of IFM.
StateGrid offered a multiple of 1.7 times, according to people familiar with the bid. The power network's regulated asset base stood at $14.75 billion in the 2016 financial year, according to the state government.
Federal Treasurer Scott Morrison blocked the State Grid offer and a separate bid from Hong Kong-based Cheung Kong Infrastructure Holdings in August. CKI, controlled by billionaire Li Ka-shing, issued a statement at the time saying it was perplexed by the ruling, while China said the decision would "severely" reduce the appetite of Chinese companies to invest in Australia and hurt bilateral trade ties.
NSW, which is selling assets to fund investment in schools, hospitals and roads, received an unsolicited offer from AustralianSuper and IFM last month, and opted not to run a second public tender process.
Shares are struggling to keep their head above water, as a plunge in Healthscope weighs on what was already a cautious start.
The 20 per cent slump in the hospital operator's shares is just about the difference between a flat and marginally lower ASX 200, which has shed 3 points to 5439. The healthcare sector is the morning's clear loser, with CSL lower by 1.3 per cent and Ramsay Healthcare has dropped 6.2 per cent, likely due to some of the worries around Healthscope.
And it's not just Healthscope, casino operator SkyCity Entertainment is off a hefty 11 per cent and headed for its biggest decline since listing 20 years ago.
The catalyst was a quarterly revenue fall as high-roller spending at Auckland casino dropped. The company also said it expects short-to-medium term adverse impact on its international business from events relating to detention of Crown Resorts employees in China.
The big miners are performing well, and BHP is up 1.8 per cent in defiance of a slump in the oil price overnight. BHP's chairman revealed at the company's annual shareholder meeting in London overnight that he will step down next year.
Rio is up 0.6 per cent, South32 1.9 per cent and Fortescue 1.8 per cent.
The big banks are enjoying some support, with CBA the only one of the Big Four to not climb in early trade. Continuing their divergent trend of recent days, Woolies is up 0.6 per cent while Wesfarmers is down 0.4 per cent. Telstra is up a touch.
Healthscope has warned that reduced patient visits in the first quarter of 2016-17 have caught the country's second largest private hospital operator by surprise.
Ahead of the $5 billion company's annual meeting today, Healthscope said if the trend in the first three months of the year continued operating earnings before interest, tax, depreciation for the hospital division - the majority of the business - would be flat for the full-year.
Investors dumped Healthscope shares, with the stock slumping 22 per cent in early trade to $2.27.
Managing director Robert Cooke noted "a heightened level of public commentary" about healthcare affordability and consumer confidence in health insurance over the past 12 months.
The proportion of Australians with private hospital cover dropped to 47 per cent in the June quarter, from 47.4 per cent a year earlier.
"Various data points across the industry tell us that the average rate of hospital volume growth generally has slowed," Mr Cooke said in a statement.
"We have seen this impact a number of our hospitals resulting in increased variability in volumes and case mix month-to-month in the first quarter and particularly in September."
Operating EBITDA for the hospital division rose 8.3 per cent to $354.8 million in 2015-16.
Group operating EBITDA was up 7.1 per cent to $407.9 million. The consensus among 12 analysts surveyed by Bloomberg was for EBITDA of $452.5 million in 2016-17 - suggesting growth of 10.9 per cent.
The company said it remained "confident that the industry fundamentals have not changed and the long term demand outlook for the hospitals division remains strong".
Mr Cooke and Healthscope chief financial officer will conduct an analyst briefing at midday after the AGM.
An Australian is among 22 people charged by Brazilian prosecutors over their roles in the collapse of a tailings dam at the Samarco Mineracao iron ore mine last November that killed 19 people.
Of the 22, 21 have been charged with qualified homicide. The charges follow what is now considered to be the largest environmental disaster in Brazil's history.
The dam collapse released millions of tonnes of muddy mine waste, wiping out several small communities.
Samarco, its co-owners Brazil's Vale and BHP Billiton, and Brazilian engineering company VOGBR Recursos Hidricas e Geotechnica which certified the dam's safety, were charged with environmental crimes.
BHP, Vale and Samarco officials said in statements they rejected the charges. Prosecutor Jose Adericido Leite Sampaio told reporters on Thursday (local time) at a briefing in Belo Horizonte, broadcast live by Globo News, that executives at Samarco had clear awareness the dam could fail but ignored the risks and prioritised profit.
If convicted the accused, who include 16 Brazilians, two Americans, a South African, an Australian and a French citizen, could face sentences of up to 54 years, prosecutors said.
The former chief executive of Samarco, Ricardo Viscovi de Aragao, is among the accused. Under Brazil's criminal code, qualified homicide is homicide aggravated by certain factors.
The only accused not charged with qualified homicide is VogBR engineer Samuel Paes Loures.
Following the dam collapse, thick red sludge flowed into one of Brazil's main rivers, the Rio Doce, killing fish and fouling water supplies for hundreds of kilometres before reaching the Atlantic ocean.
Before the case goes to trial, the charges need to be approved by a judge. Prosecutors filed the charges with a judge in Belo Horizonte, Brazil earlier in the day.
If you're wondering what was up with last night's reversal in the Aussie, yesterday's soft jobs figures played their part.
The ABS employment data, which is a volatile release, showed a loss of 10,000 jobs in September. The unemployment rate held at 5.6 per cent, but only because of a drop in the participation rate.
Worse, was an acceleration in the shift from full-time, which lost 53,000 jobs over the month and which is now shrinking at an annual rate of 0.4 per cent, to part-time jobs, which jumped 43,000 in September to grow at an annual rate of 5.4 per cent.
Underemployment is getting more attention - people who say they want to work more but can't. The data is available only quarterly, but Morgan Stanley analysts point to the record-high level of 9.3 per cent marked in August. The chart below tells the story.
"In short, the labour market looks to be weakening even further, when composition is taken into account," the economists write.
"Today's data plays into our out-of-consensus call that the RBA will be pushed to cut another 50 basis points [half a percentage point] in 2017."
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The local currency slipped overnight in what IG strategist Chris Weston calls "a key day reversal":
The big mover has been the Aussie dollar and clearly my bias yesterday to "modestly positive" was ill-timed and the fairly terrible September employment report has seen a wave of capital leaving Aussie dollars and repositioning back into US dollars.
AUD/USD is looking to close the session 1.3 per cent lower and after trading above Wednesday's high, it is set for a firm close below Wednesday's low - this is commonly referred to in price action analysis as a bearish key day reversal. We now need a lower low in price today and the probability would suggest lower levels in the near-term for our currency against the greenback.
Putting my fundamental hat on, where price goes will be determined by the outcome of Wednesday's third-quarter CPI number, and we will need to see a core inflation (trimmed mean) print of +0.2 per cent (quarter-on-quarter) or lower to get the market excited about a lower cash rate. The consensus is currently calling for 0.4 per cent which shouldn't trouble the RBA's current inflation estimates. The swaps market currently places an 18 per cent chance of a cut in the November meeting.
Turning to the Asian market open and we see the ASX 200 opening largely unchanged with SPI futures down a whopping 3 points. BHP's ADR (American Depositary Receipt) indicates an open around 18c lower, in line with lower oil prices, while spot iron ore has put on 0.8 per cent at $US58.85/tonne. CBA's ADR is up around 10c.
Given moves in energy we may see some selling in the space, although the S&P 500 energy sector is largely unchanged. Santos release sales and production data today.
Jac Nasser will step down as the chairman of BHP Billiton next year with the resources giant likely to consider appointing a woman for the first time in its 130-year history.
On the same day the Melbourne-based company adopted one of the most ambitious gender targets of any large company by pledging to make half its workforce women in just nine years, Mr Nasser told shareholders at the London annual meeting that he would not seek re-election in 2017.
Mr Nasser, who made his name during a 33-year career at Ford Motor Company, has been chairman of BHP since 2010 and a director since 2006. He told shareholders that he wanted to announce his retirement last year but was convinced to stay on as the company responded to the Samarco dam disaster in Brazil that claimed 17 lives.
"Now that the basic structure of the Samarco response is in place, the findings of the expert panel have been published, the compensation and remediation programs have been initiated, and with BHP Billiton in robust shape, I have decided that I will not seek re-election at next year's AGM," he said on Thursday.
The company did not name a successor for the $US1 million-a-year position but it will be under pressure to underline is newfound commitment to gender equality by appointing a woman. There are currently three women - Anita Frew, Carolyn Hewson and Shriti Vadera - sitting on BHP's 11-person board.
BHP will launch a global search and is not required to chose an Australian for the role. But the company's tax disputes with Australian federal and state governments over the past ten years means it is unlikely to weaken its political position by choosing a candidate from overseas.
Mr Nasser chairmanship coincided with a sometimes turbulent time for BHP and the mining industry in particular. Aside from the catastrophe at Samarco, which is a joint venture with Brazilian group Vale, BHP has been criticised by some shareholders for its handling of a severe slump in commodities prices over the past three years.
While BHP has fared better than many of its peers such as Anglo American and Glencore, it has been forced to write down the value of its onshore shale gas assets in the US by billions of dollars.
Stocks halted a two-day rally as traders assessed earnings from some of the world's largest companies. The euro fell after ECB boss Mario Draghi said the region's central bank hasn't discussed extending or tapering stimulus.
Equities slumped as lacklustre forecasts from Nestle to EBay outweighed optimism with American Express and Deutsche Lufthansa projections. The European currency slid against most major peers and German bond yields dropped on speculation traders will have to wait until at least December for news on policy changes. Crude sank as Russia's largest oil company said the country could boost production, while Nigeria lowered prices.
Traders weighed a batch of corporate results, a final US presidential debate and the European Central Bank's decision to leave its quantitative-easing program unchanged.
The 25-member Governing Council reaffirmed that asset purchases will continue to run at the pace of 80 billion euros per month until March 2017, and in any case until policy makers see a sustained pick-up in inflation toward its goal of just under 2 percent. Officials left the main refinancing rate unchanged at zero and the deposit rate at minus 0.4 per cent.
While Draghi reiterated that officials will extend the institution's unprecedented stimulus if needed, he refrained from talking about the future of asset purchases. That left investors guessing at a time when the global economy keeps showing signs of uneven growth.
"It seems like Draghi wants to say as little as possible," said Mark Dowding, a fund manager at BlueBay Asset Management in London. "Market reaction suggests some slight disappointment that further easing measures were not discussed. However, moves were tempered by Draghi fudging everything else and wanting to push the focus to the December meeting."
"Markets took the combination of the comments of 'no abrupt end to QE' and a 'brief' discussion of negative rates as an indication the ECB will be extending QE come next March at the same unchanged €80bn-per-month levels," NAB senior economist David de Garis said.
"There's no doubt that investors interpreted Draghi's comments to mean that the central bank is still considering more stimulus in December," agreed BK Asset Management currency strategist Kathy Lien. "This view was shared by bond traders who took German and French yields lower after the rate decision."
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