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

 

ASX 200 up 41 to 6519 after a cautious start and weighed down by disappointing CBA results. US futures ticked higher following yuan fix at 11.15am. Gold miners were the standouts today as the AUD fell and the bullion price rose. NCM rose 3.8% and RMS had a stellar day up 13.3%. The Diggers and Dealers wound up today with many pretty happy with how the price is panning out. Materials turned negative led by BHP down 0.9% and FMG down 3.3% after early gains evaporated. Energy stocks under pressure but industrials, healthcare and consumer stocks all rose. CSL up 0.7% WES up 2.1% and WOW up 2.3%. In the banking sector, three out of four ain’t bad as Meatloaf would say. CBA results today concerned markets and fell 1.4% after earlier larger losses. In corporate news, CBA reported, TCL in a trading halt as it raised $500m to buy the remainder of the M5 in Sydney. SUN cheered with its results and kicked 4.8% higher. SMR also saw a takeover off and rose 16.5%. On the economic front, the RBNZ surprised the market with an aggressive 50bps cut to 1%, we also saw home lending numbers cheer. The AUD fell to a decade low against the Kiwi and the USD at 67.02c, while bond yields fell 8bps to 0.95% helping equities higher. In Asia, markets were weaker but not dramatically so. China down % and Japan down %.

Today’s Highlights

  • ASX 200 up 41 to 6519
  • High 6530 Low 6467. Solid volume.
  • RBNZ cuts rates by 50bps.
  • 10-year bond crashes to 0.95%.
  • Banks firm except CBA. Miners slip on iron ore.
  • Gold miners soar and industrials rally hard.
  • Tech misses out a little.
  • AUD hits 10–year low against USD at 67.02c.
  • Aussie gold rises to $2214.
  • Bitcoin steady at $11670.
  • US futures down 146.
  • Yuan fixed at 6.9996c
  • Asian markets mixed Japan off % and China down %.

STOCKS

  • PET +7.97% water clears. Presentation helps.
  • RSG +8.71% RMS +13.33% going gangbusters.
  • SUN +4.80% delivers as management changes helps.
  • DDR +1.60% some respite.
  • MGX -5.70% Diggers and Dealers presentation – iron ore slide sub-optimal
  • CIA -8.85% iron ore pricing.
  • APX -3.28% tech shares miss out.
  • SMR +16.47% takeover bid at 150c-170c.
  • BYE +6.82% SM58 011 spuds.
  • NST +5.71% EVN +5.49% Diggers and Dealers presentation.
  • AAC -0.97% Joe Lewis increases his holding in AAC to 45.8%.
  • AMP -0.29% results tomorrow. Could do anything.drop 5
  • PNI +8.43% kicks on from yesterdays result. Follow the money.
  • TCL – capital raising well supported.
  • RFF – crickets. Nothing from company.
  • Speculative stock of the day: Opthea Limited (OPT) +138.15% after meets Primary Endpoint in Phase 2b Study of OPT-302 in Wet AMD. Ongoing Phase 2a clinical trial of OPT-302 in patients with persistent diabetic macular edema, anticipated in early 2020.”
  • Biggest Risers: RMS, PRU, RSG, PNI, WGX and PET
  • Biggest Falls: CIA, MGX, FXL, FMG, APX and APX

TODAY

  • Transurban (TCL) – To acquire the remaining 34.62% of minority interests in M5 West for $468m via a $500m placement and share purchase plan. The transaction is immediately free cash flow and value accretive. Full-year results; proportional toll revenue up 10.25% to $2.58bn, statutory profit from ordinary activities down 63.7% to $170m. Proportional EBITDA ex-items up 12% to $2.02bn vs consensus of $2.01bn. A final distribution of 28cps was declared, inline with guidance. A distribution of 62cps is expected in FY20.
  • CBA -1.38% small miss on the cash NPAT level, coming in at $8.49bn versus $8.6bn expected. The pre-open share price shows a small rise, probably with the market rather than with the results. They announced a final dividend of $2.31 per share, taking the full-year dividend to $4.31 per share – flat on the prior year. Net interest margin was 210 bps – flat on 1H19. Home lending growth was a positive, coming in at 1.3x system growth. The board is talking about potential capital management initiatives, which could include getting rid of the dividend reinvestment plan or an off-market share buyback.
  • Suncorp (SUN) +4.80% Full-year results; cash earnings came in ahead of expectations at $1.12bn vs consensus of $1.09bn. A capital return of 39c per share has been proposed along with a share consolidation; every 1000 shares consolidated into 971 shares. A final dividend of 44c per share was declared.
  • AMP (AMP) –0.29% There are reports this morning that AMP is considering the sale of its banking division following the collapse of its life insurance sale. It is unclear if potentially interested parties will meet AMP’s price expectations of $2bn.
  • Galaxy Resources (GXY) +0.44% To recognise a non-cash impairment charge of around $150-185m in its first-half results. This comes after a review of its inventory on hand at its Mt Cattlin operations.
  • Lynas (LYC) +2.55% Has commented on media reports regarding the renewal of the Malaysia operating license, saying that shareholders shouldn’t rely on media speculation. LYS will continue to update the market.
  • Charter Hall Group (CHC) +3.05% Two of its managed wholesale funds have combined to partner with GIS, Singapore’s sovereign wealth fund, to acquire the leasehold tower in Sydney. The off-market transaction will lift CHC’s funds under management by around $1.8bn to over $33bn.

ECONOMIC NEWS

  • New mortgage lending rose by 1.9% to $16.82bn in June, according to seasonally adjusted data released by the ABS today. The value of new loan approvals rose by 2.4% to $12.45bn. the total value of new housing finance was still down 17.6% from the same month a year earlier. The bulk of that decline has come from new investor finance, which slumped 24.79%.
  • In the June quarter 2019, the living costs of pensioner and beneficiary households (PBLCI) rose 0.5%. Over the same period, the living costs of self-funded retiree households rose 0.7%, age pensioner households rose 0.6%, employee households and other government transfer recipient households both rose 0.5%. The LCI for employee households rose 0.5% in the June quarter 2019. The main contributor to the rise is transport (+3.6%), driven by automotive fuel.
  • RBNZ cuts rates by 50bps. Leads the world on an aggressive cut.

BOND MARKETS

  • 2-Year bond yields drop 5bps to 0.70%
  • 5-Year yields fall 6bps to 0.66%
  • 10-Year yields down 8bps to 0.95%

ASIAN NEWS

  • PBoC sets yuan fix at 6.9996. Close but no cigar. Anything below 7 helps.
  • South Korea is venting its anger with consumers boycotting Japanese goods as the ongoing dispute over wartime labour escalates. South Korea also faces a tough time in shipbuilding with China flexing its muscles.

EUROPEAN AND US NEWS

  • Trump’s top economic aid says he still wants to make a deal. Could have fooled us.
  • One US analyst has warned of a ‘Lehman-like’ shock to markets.
  • Denmark actually offers a government bond with a negative yield.
  • German June Industrial production -1.5% M/M versus 0.4%.

And finally…………

A passenger in a taxi leaned over to ask the driver a question and tapped him on the shoulder. The driver screamed, lost control of the cab, nearly hit a bus, drove up over the curb, and stopped just inches from a large plate glass window.

For a few moments everything was silent in the cab, and then the still shaking driver said, “I’m sorry but you scared the daylights out of me.”

The frightened passenger apologized to the driver and said he didn’t realize a mere tap on the shoulder could frighten him so much.

The driver replied, “No, no, I’m sorry, it’s entirely my fault. Today is my first day driving a cab. I’ve been driving a hearse for the last 25 years.”

Bill, the avid golfer, contacts a “Medium” and asks if there is a golf course in Heaven.
The Medium says that his request is a big order, but he will try and find out and get back to him in a few days.

After several days go by, Bill finally gets a call from the Medium.

“Well,” said Bill, “What did ya find out?”

“I’ve got good news and bad news for you,” said the Medium.

“OK, what’s the good news?” Bill exclaimed.

“Well, there is a beautiful 36 hole golf course in Heaven, and you’ll have 24 hour access with your own personal caddy,” blurted out the Medium!!

“And the bad news?” asked Bill.

“You’re due to tee-off this Sunday at around 10:30 in the morning,” the Medium said!

Thanks  to http://www.jokesoftheday.net/

Please send more material!!!

Clarence

XXXX

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

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About the author

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