Markets Live: Shares pull back 1:27pm: Corporate watchdog ASIC is taking a closer look at the share purchases by two David Jones directors a few weeks ago - at a time when they were aware of the retailer's third quarter sales figures but the public was not. When the better than expected sales numbers were released, the shares immediately jumped by 6 per cent and have since risen by another 6 per cent. The Australian Securities and Investments Commission is understood to have already begun interviewing some David Jones directors and examining emails between the directors and chairman Peter Mason. Mason stands by his explanation that he did not consider the quarterly sales information as price sensitive and gave his permission to two directors, Steve Vamos and Leigh Clapham to buy the David Jones shares. At best the three men are guilty of an error of judgement and a lack of an understanding of the retail industry. 1:12pm: With property dominating headlines in Australia in recent weeks, Markets Live has been reading around and taken particular interest in Canada. This piece from The Financial Times takes a closer look at what analysts in Canada believe to be a housing bubble. As home prices rally and construction projects proliferate - particularly in Toronto, Montreal and Vancouver - industry analysts say the country's property sector is perched precariously at its peak. David Madani, economist at Capital Economics, believes the nation is on the verge "of what will prove to be a prolonged correction." "Canada's housing market exhibits many of the symptoms that preceded disruptive housing downturns in other developed economies, namely overbuilding, overvaluation and excessive household debt," he adds. Mr Madani's comments chime with a chorus of policy makers, rating agencies and hedge fund managers who have warned of the risks posed by Canada's overheated housing market. Alongside Norway and New Zealand, Canada's overvalued property sector is most vulnerable to a price correction, according to a recent OECD report. It is especially at risk if borrowing costs rise or income growth slows. Read the full article at FT.com 1:00pm: A bit more on the home loan numbers that came out earlier today: A jump in the number of new home loans in September is another sign that interest rate cuts are starting to work, but first-home buyers are being priced out of the market. The number of owner-occupier mortgages approved rose by 4.4 per cent in September, which followed a 4 per cent drop in August, official figures show. ""Interest rate cuts do take time to work their way through the economy so that's what we're seeing,"" Commonwealth Bank associate economist Diana Mousina said. ""Even though we might get some volatility month by month, the overall trend has been quite a sustained upturn in housing activity."" Total housing finance by value rose 5.3 per cent in September, seasonally adjusted, to $25.151 billion, the Australian Bureau of Statistics said this morning. 12:47pm: What the Reserve Bank really said in its quarterly monetary policy statement: RBA eyes the Aussie What the Reserve Bank really said in its quarterly monetary policy statement on Friday. PT4M50S http://www.smh.com.au/action/externalEmbeddedPlayer?id=d-2xb4r 620 349 November 11, 2013 - 12:47PM 12:36pm: While the share market rallied on the back of a strong US payrolls report, the long-end of the bond market was hit as investors pulled out. Yields on 10-year Treasuries jumped from about 2.6 per cent to 2.75 per cent. In Australia, yields on 10-year Commonwealth Government Securities eased slightly this morning after jumping following the release of the US jobs data. Ten-year Australian government bond yields rose from 4.14 per cent on Friday afternoon to 4.25 per cent this morning. Yields then slipped slightly and were trading at 4.22 per cent about mid-day. 12:26pm: On December 6, S&P is due to rebalance its indices. UBS has given its clients a quick run through on likely ins, and outs: Potential Additions: Ramsey, Tatts, James Hardie Potential Deletions: Qantas, Toll Potential Additions: J-B HiFi, Super Retail, REA Group, IOOF Potential Deletions: PanAust, Whitehaven Coal, UGL, OZ Minerals Potential Additions: ARB, Slater and Gordon, Kathmandu, Village Roadshow, Virtus Health, Steadfast Group, BC Iron Potential Deletions: Linc Energy, Virgin Australia, Fleetwood, OceanaGold, Boart Longyear, Kingsgate Consolidated, St Barbara Mining, Perseus Mining Stocks not considered: Ausbroker, because it is too illiquid. 12:17pm: Rural services company Elders expects to report a loss of more than $500 million for its recently concluded fiscal year. ""It is now clear that there will be a number of impairments, particularly to intangibles and the de-recognition of tax assets and other non-recurring items,"" Elders said in a statement on Monday. Elders shares were down one cent, or 7.5 per cent, at 12.5 cents. 12:07pm: The shift in sentiment on the US stock market on Friday could reflect optimism that there has been a fundamental improvement in the US economy, which would be supportive of earnings, says JBWere executive director Mike Kendall. But with the current earnings season quietening down, focus will turn to economic data, which could see a period of volatility in financial markets as each figure is closely analysed, Kendall adds. In particular, all eyes will focus on Janet Yellen, the candidate appointed by the White House to succeed Ben Bernanke, as she testifies in the US at her confirmation hearing (Friday AEST). Every single word will be dissected. [Investors] will be looking for a view on [tapering] timing, whether Yellen actually gives that remains to be seen. But it will be eagerly anticipated. 11:56am: Australia is set to become a more mining-focused economy, not less, despite a peak in the resources investment boom, a new report says. The report, released by economic forecaster BIS Shrapnel today, said that mining activity as a share of Australia's GDP was set to increase from 18.7 per cent to 19.8 per cent. "With respect to the mining boom, it's probably fair to say that this is not the beginning of the end, but the end of the beginning," BIS Shrapnel's infrastructure and mining senior manager Adrian Hart said. Over the next five years, the strong boost from mining production, led by LNG and iron ore, will more than offset the economic negatives from falling mining investment which will flow through to construction and manufacturing. But the boost to Australia's growth will not be matched by a sharp increase in mining jobs, the report says, with resources firms continuing to keep a tight rein on costs as the Australian dollar continues to remain at elevated levels and amid lower commodity prices. "We expect that mining operations employment will rise only 11 per cent over the next five years, mainly in oil and gas and iron ore, whereas mining construction employment will slump 40 per cent," Hart says. On Friday, the Reserve Bank said in its quarterly Statement on Monetary Policy that it was expected a faster drop-off in mining investment than expected. The central bank cut forecasts for Australia's growth in 2014 by 0.5 percentage points to 2 to 3 per cent. 11:43am: Hotel Property Investments, formerly Redcape Property Services, is to float on the ASX at an initial value of up $285 million. In the initial public offering the new pub real estate investment trust will offer units at between $2 to $2.15 and will have a portfolio of 41 pubs and 7 detached bottle shops and some specialty stores, most of which are located in Queensland with the remainder in South Australia. The group derives close to 75 per cent of its income from Coles-run outlets and will look to source other assets once listed. Analysts said it will be similar to the ALE Property Group, which owns a large amount of pubs leased to Woolworths. The joint advisors, Goldman Sachs and JP Morgan will lodge the prospectus on Thursday, November 21, with a listing date of December 12. JP Morgan analysts valued HPI above $500 million, of which half will come from the float, said the company should come to market with a 7.8 per cent distribution yield. It reckons HPI investors could expect a 12 per cent internal rate of return The pub float is the first in the sector for at last five years after the now-defunct ING Entertainment Fund. It also comes two months before the planned float of John Singleton/Carnagie-backed Australian Pub Fund. 11:20am: The Australian dollar is lower after a surprisingly strong US jobs report increased the likelihood that the Federal Reserve's quantitative easing could be wound back sooner rather than later. The local unit was trading at 93.72 US cents, down from 94.65 cents on Friday. Investors bought US dollars aggressively on the back of the figures, BK Asset Management managing director Kathy Lien said. 11:11am: A Qatari sovereign wealth fund was among a small group of investors who recently contributed $US1 billion ($1.06 billion) to Canadian smartphone maker BlackBerry, US securities filings show. Qatar Holding joined the group led by BlackBerry's largest shareholder Fairfax Financial Holdings Inc in making the cash infusion after the company abandoned hopes of finding a buyer earlier this month. Fairfax Financial Holdings had offered to buy the rest of BlackBerry and take it private but backed off at the last minute, opting instead for new management and cash to give it breathing room to restructure. BlackBerry helped create a culture of mobile users glued to smartphones. But it has lost its lustre as many have turned to iPhones or devices using Google's Android software. 10:49am: Volkswagen is planning its first issue of Australian car bonds after record-low borrowing rates spurred a surge in sales and demand for vehicle finance. It's the first new entrant to the market in three years. The Audi manufacturer, which arranges finance for 28 per cent of its vehicles globally, is slated to start marketing $459 million of notes backed by car loans as soon as today, according to a company presentation. Fleet Partners Pty was the last new issuer of such debt in September 2010, data compiled by Bloomberg show. Loans to retail customers by Volkswagen's Australian finance unit are forecast to be more than four times what they were in 2008 by year-end, according to an investor presentation, driven by declining central bank benchmark rates. Supply of debt backed by non-mortgage assets has lagged behind lending growth, with issuance slumping 17 per cent this year. ""We're seeing more entrants into the auto loan space, through leasing as well as through fleet services,"" said Sarah Hofman, head of securitization for Asia Pacific at Royal Bank of Scotland Group Plc. ""There are about a million new car sales in Australia every year so it's an interesting market that lots of other financial institutions are looking to get into."" Asset-backed securities contribute 9 per cent of funding for VW's finance unit, known as Volkswagen Financial Services, according to its presentation. The unit's global profit before tax was 993 million euros ($1.3 billion) last year, compared to 554 million euros in 2009, the presentation shows. 10:38am: Anton Billis isn't bragging, BusinessDay's Michael West tells us why: You could be forgiven for thinking that a chief executive who had just delivered a 150 per cent rise in profit and had $170 million of bullion stacked at the Perth Mint might be trumpeting his triumphs from the rooftops. Not the bashful Anton Billis. You could also be deluded into thinking that the chief executive of a company trading on a PE ratio of just three - ostensibly the best value in the sharemarket - would be doing a song and dance about it. After all, it is customary for a public company to spread its good news in order to inflate its stock price; equally to spin its bad news as good news to stop its stock price from falling. Not Anton Billis. When it comes to the former prospector in charge of gold mining twins Rand and Tribune Resources, there is no one more demure, no one more reclusive in corporate Australia. When Tribune filed its annual report the other day, an alert reader had to trudge through 11 pages of "stoping" and "graphitic phyllites" before noticing this furtive observation: "The profit for the consolidated entity after providing for income tax and non-controlling interest amounted to $27,775,577." 10:15am: It seems good news is good news again, at least on the US share market. Stronger-than-expected October payrolls data saw the US stock market rally on Friday, with the local market set to follow this morning. But why are financial markets suddenly optimistic again about signs of improvement in the US economy, after months of fears that such gains could bring forward the US Federal Reserve's plans to wind-back its $US85-billion-a-month bond-buying program, which has boosted share markets? "I think one of the reasons is that we've had a couple of upside surprises now, so it's more of a global growth story," says FXCM market analyst David de Ferranti. In particular, we had the US GDP figures come out a lot better-than-expected last week as well, and the improvements in the labour market - while they suggest that Fed tapering may occur sooner than March 2014, as previously anticipated, it is bullish for the global growth story, which is bullish for equities, and that's one reason why we saw a big rally in the S&P500. At the same time, it is still not clear if the optimism on the markets would be sustained, Ferranti says. For one, the US could still face headwinds from another fiscal impasse early next year. 9:58am: Concerns that a surge in US gas exports to China could undermine prospects for further expansion of Australian gas sales may be overblown, with the Chinese likely to be wary of sourcing gas from America. A paper by the National Bureau of Asian Research in the US highlights political concerns in Beijing about relying on the US, which will prompt China to look instead to Australia and Canada for additional supplies of gas in volume. Australia will overtake Qatar as the largest exporter of liquefied natural gas, which is transported by ships to end markets, from 2017, thanks to burgeoning demand, mainly in north Asia. By that time, Australia will have the capacity to export an estimated 88 million tonnes of LNG annually, which could rise to 130 million tonnes since many projects being developed have ready expansion prospects. However, a cost blowout in developing gas projects in Australia, coupled with access to cheap gas in the US on the back of the shale oil boom there, has opened the door to new suppliers emerging. Will the flame go out on Australian gas because of US sales to China? 9:54am: Because we know you love a good property story here on Markets Live: 9:46am: Transurban is moving towards a possible purchase of Sydney's Cross City Tunnel (CCT) by buying the toll road's senior debt. Transurban today announced it would buy all of the toll road's senior debt from the Royal Bank of Scotland for $475 million. The tunnel has proved to be a troubled asset for its owners, having twice been placed into receivership since opening in 2005. The debt purchase is subject to regulatory approval but Transurban said it and RBS had instructed the tunnel's receivers to continue to work towards the sale of the asset while the deal was being finalised. Transurban chief executive Scott Charlton said the company intends to bid for the road during the sale. ""The acquisition of the senior debt in the CCT will allow us to work with the receivers to examine restructuring options for the asset and, ultimately, if successful in the sale process, put the asset onto a sustainable footing,"" the company said in a statement on Monday. Transurban already owns or part-owns of number of major toll roads in Sydney - the M2, M5, M7 motorways, the Eastern Distributor and the Lane Cove Tunnel. 9:39am: Chemicals company Orica has lifted its full year profit back above $600 million, despite soft earnings growth due to weak demand and pricing in some of its key divisions. Orica's net profit of $602 million for the 12 months to the end of September, is up more than 49.4 per cent from last year's $403 million, which was skewed by $247 million in writedowns. However, the 2012-13 profit was $48 million lower than the previous year once the 2012 writedowns are excluded. Total 2013 revenue was up 3.4 per cent to $6.9 billion, despite weakness in the company's ground support business and subdued demand for chemicals. Orica said it expected to lift its profit above the current level over the next 12 months. The company announced a fully-franked final dividend of 55 cents per share, taking the full year dividend to 94 cents, up two cents, or two per cent, from last year. 9:30am: Here's what you need2know today: SPI futures +55 points AUD fetching 93.84 US cents, 93.12 yen, 70.26 euro cents, 58.64 pence In the US on Friday, Dow jones +1.1%, S&P500 +1.3% In Europe, Eurostoxx -0.3%, FTSE100 +0.2%, CAC -0.4%, DAX flat Spot gold fell to $US1288.60 per ounce Brent oil jumped to $US105.12 per barrel Iron ore slipped to $US135.90 per tonne On the local corporate front, Orica is scheduled to report earnings. Both CSG and NRW Holdings are to host annual meetings. In economic news, Australian home loan data for September is expected at 11.30 AEDT from the Australian Bureau of Statistics. 9:25am: Good morning. Contributors: Max Mason, Jens Meyer