Buyers back in charge

In a continuation of recent stock market volatility, the buyers have been firmly in charge over the past 24 hours.

While, stability in China’s stock market may have been a catalyst and a minor circuit breaker, it’s hard to believe it featured heavily in the list of investor reasons for buying. More likely the surge in world share markets over the past 24 hours reflects the fact that many see relative value in current prices. This creates a situation where those who have been waiting on the sidelines are quick to follow once buying starts. This is reflected in yesterday’s news that Woodside now sees enough value to have made a move on Oil Search while the dividend yield on the ASX 200 index now exceeds 5%.

The potential Oil Search takeover is likely to be a market focus for some time. After the dust has settled and the numbers have been run, it seems likely that Woodside will need to improve its offer to succeed.

While a positive opening looks likely for the index this morning it will be swimming against the tide more than 16 points of dividend losses today. BHP and Woolworths, amongst others, trading ex-dividend.