The week in stocks

The major banks and the supermarkets took centre stage this week.

The ASX 200 spent another week edging up to to five-year highs, finishing the week 0.4 per cent higher. Soft economic news coming from the US saw markets cheer as the expectation is quantitative easing will continue in its current form for some time yet, and the Federal Reserve confirmed this after their two-day meeting.

Big Four

Once again, regulator Australian Prudential Regulation Authority (APRA) has warned banks to limit dividend payouts. The front page commentary hit the financial sector with force on Thursday, shaving 1.23 per cent from the market value of the Big Four and the two regional banks.

Reporting on the same day as APRA’s comments in the press was National Australia Bank. Concerns over future dividends overshadowed National Bank’s results, which were broadly in line with analyst expectations. The market could have also been hoping for a better result from the National as the share price had risen over 40 per cent this year alone – expectations were high.

Investor concern over future dividends was not an issue on Friday, with the banks nudging back to gain 0.2 per cent.

Woolworths

Woolworths’ supermarket arm achieved total sales growth across food and liquor greater than Coles for the first time in years, confirming they are still a strong competitor in the hotly contested segment. The numbers were helped along by Woolworths attracting an additional 1.1 million customers on average per week shopping in its stores.

Across the board, Woolworths delivered robust September quarter sales numbers, reigniting investor interest in the supermarket giant. All up, sales for the group increased 6.1 per cent for the quarter.

The solid numbers sent Woolworths shares up 1.4 per cent against a broader market decline. 

Macquarie and Sydney Airport

Posting a net profit of $501 million, a 39 per cent jump on the previous corresponding period for the half year and announcing plans to pay a $1 dividend and a return of capital by giving each shareholder one stapled security in Sydney Airport sent Macquarie soaring Group soaring over 4 per cent on Friday.

The past five years have been a test for Macquarie investors as the share price collapsed and dividends were slashed. Consequently, the increased dividend and capital return was favourably received by the market.

There is the possibility Macquarie’s plans to give capital back is supported by an improving outlook for its business operations, which have gained traction in the past half year as equity markets have gained.

Unfortunately for Sydney Airport the market wasn’t as excited about Macquarie’s proposed capital return, sending the stock down over three per cent.