ASX 200 Henry Jennings, Australian Market Wrap. Headlines, Stocks, Bonds, Economic & Asian Market News – END of DAY REPORT.

 

ASX 200 tumbles 37 points to 6338 as banks get hit by downgrades. Late rally but decent volume today. US futures down 1 afetr Fed. NAB set the tone from the outset with its 16% dividend cut and left the shares down 0.31% with ANZ down 2.43% reversing yesterday’s gains. MQG up 0.65% and due to report tomorrow. Miners too under pressure as metal prices slid. FMG down 1.51% and BHP down 1.23%. Energy shares too yunder the pump with WPL down 0.73%The big news was WES bidding for KDR in a 190c cash takeover over the lithium miner. Helped revalue the sector with PLS up 9.09% and KDR leading up 44.96%. TLS slipped 1.18% again as its potential plan to sell some exchanges seemed to to spur selling. CSL up 0.43% one of the few bright spots. TCL also in the green up 0.52% and AMC too up 0.56% as it cements its Bemis takeover. Asian market closed for May Day. AUD steady at 70.21c.

Today’s Highlights

  • ASX 200 down 37 to 6338
  • High 6361 Low 6323.
  • Banks flop on NAB div cut.
  • Miners foillow banks lower.
  • CSL and MQG some bright spots.
  • WES bids for KDR.
  • DXS raises money as does BVS.
  • AUD weaker at 70.21c
  • Aussie Gold steady at $1814 on lower dollar.
  • Bitcoin steady at $5317.
  • US futures down 1.
  • Asian markets mostly shuttered for holidays.

STOCKS

  • KDR +44.96% 190c cash from WES.
  • PLS +9.09% lithium bump.
  • PNV+4.39% million dollar month.
  • NEA +5.57% broker upgrade.
  • SHV+5.59% state of the almond market.
  • Z1P +0.58% broker upgrades.
  • KGN+0.34% tech sector jump.
  • PDL -12.99% nasty fee performance.
  • IFL -5.20% FUN update.
  • AMP -2.60% cashflows and AGM escape for Murray.
  • ATL -25.00% profit guidance.RVs turn down.
  • CRD +13.58% US student loan comparisons going well.
  • NXS +10.03% broker upgrade.
  • AJM +9.09% lithium bump.
  • DXS -launches capital raising.
  • BVS -capital raise.
  • Speculative stock of the Day: FinTech Chain (FTC) +53.85% rollout of its T-Linx platform in rural banks in ShanXi Province. Good volume again. Very volatile.
  • Biggest Risers: KDR, HSN, PLS, ZIM, SHV NEA and ORE
  • Biggest Falls: AMI, PDL, ASL, MGX, IFL. SLR and JIN.

TODAY

  • Wesfarmers (WES) -0.39% Has announced plans to buy Kidman Resources(KDR) in a $776m deal. Board and SQM are supportive. 4 weeks due diligence.
  • NAB (NAB) -0.31% reported 1H cash NPAT of $3.28bn, meeting expectations. Statutory profit of $2.69bn. A further $525m in post-tax customer-related remediation costs has been announced. 1H dividend has been cut to 83c from 99c. NAB is on sees costs will be broadly flat in FY19 and FY20, while MLC is on track for a FY20 IPO, with a trade sale not out of the question.
  • Pendal Group(PDL)  -12.99% Report 1H cash NPAT of $84.5m, missing expectations of $92.0m. Revenue of $243.0m also missed estimates, with $253.0m expected. The closing FUM at March 31st was $100.9bn, up slightly from the $99.0bn from a year ago. A 10% franked interim dividend of 20c has been announced. Going forward the company expected FY19 fixed costs to grow by 5-7% on FY18. However, the opening FUM for 2H19 is higher that the average for 1H and the balance sheet contains no debt.
  • Woolworths (WOW) +0.81% Q3 sales up 4% on last year at $14.90bn. Each sector (Australian Food, Endeavour Drinks Group, New Zealand Food, Big W and Hotels) saw a YoY increase in Easter adjusted comp growth.
  • GUD Holdings (GUD) -0.17% Provide a trading update at the Macquarie conference. The company expects improvement in 2H19 performance thanks to the Narva Catalogue release in Q4, FY contribution from other new automotive products, anticipated increase in cash conversion and an improved Davey result following a push in sales initiatives in 1H.
  • AMP(AMP) -2.60% Q1 cashflows update. Australian wealth management AUM up 5%, with net cashflows down 11.5% on last years number to $1.77bn. AMP Capital AUM grew 4% while NZ wealth management AUM increased 7%. The rises were mostly attributable to stronger investment markets. AMP Bank’s total loan book rose $127m up to $20.1bn during the quarter, and the deposit book grew by $218m up to 13.5bn. AMP CFO Gordon Lefevre is set to retire, to be replaced by the current AMP Capital CFO and COO John Patrick Moorhead effective June 1st.

ECONOMIC NEWS

  • Nothing much today locally.

BOND MARKETS

  • 2-Year bond yields up 1bps to 1.31%
  • 5-Year yields up 1bps to 1.38%
  • 10-Year yields unchanged at 1.78%

ASIAN NEWS

  • China has suspended two Canadian pork exporters from their permitting. Looks like an escalation in the current spat over Huawei with Canada.
  • Southeast Asian manufacturing picked up in April, with a leading survey of purchasing managers showing its highest reading in five months.
  • Taiwan’s manufacturing sector contracted further in April as output and new orders fell more quickly on subdued demand.
  • South Korean manufacturing production showed signs of stabilising in April. Inflation has picked up from a three year low.
  • A human rights group has revealed how authorities in China tracjk their citizens using mass surveillance. They use an app using facial recognition to match faces to ID and cross check documents. The app also takes a host of other data points — from electricity and smartphone use to personal relationships to political and religious affiliations, to flag suspicious behavior, the report said.

EUROPEAN AND US NEWS

  • Beyond Meat has raised US$240.6m from its IPO on strong appetite for its meatless burgers.
  • UK PM has sacked the defence minister for leaking details of Huawei from a security briefing.
  • Venezuela starting to look interesting. Fox Business news has a great take on the crisis in the mornings!

And finally…………..

An Arab Sheik was admitted to the Hospital for heart surgery, but prior to the surgery, the doctors needed to have some of his blood type stored in case the need arose. As the gentleman had an extremely rare type of blood that couldn’t be found locally, the call went out around the world. Finally, a Scotsman was located who had the same rare blood type. After some coaxing, the Scot donated his blood for the Arab. After the surgery, the Arab sent the Scotsman a BMW, a diamond necklace for his wife, and $100,000 US dollars in appreciation for the blood donation. A few months later, the Arab had to undergo a further corrective surgery procedure. Once again, his doctor telephoned the Scotsman who was more than happy to donate his blood. After the second surgery the Arab sent the Scotsman a thank-you card and a box of Quality Street chocolates. The Scotsman was shocked that the Arab did not reciprocate his kind gesture as he had anticipated. He phoned the Arab and asked him: “I thought you would be more generous than that. Last time you sent me a BMW, diamonds and money, but this time you only sent me a lousy ‘thank-you’ card and a crappy box of chocolates?” To this the Arab replied: “Aye laddie, but I now have Scottish blood

in me veins.”

Clarence

XXXX

mt_tryforfree
Financial Markets and Political Commentary
 

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Henry Jennings Contact: henryjennings@mac.com // @henryj007 Has been involved in Investment Banking and Stockbroking since the early 1980's. Stockbroker - Camerons Stockbroking Macquarie Bank - Equity Capital markets Macquarie Group - Divisional Director