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

 

ASX 200 rose 29 points to hit 6501 after a tentative start. Results once again dominating as ex dividends took some of the gloss off. US futures up 81. Banks were under pressure as MQG went to the market taking $1bn out of circulation for the financial sector and the big four weakened on US bank falls. CBA dropped 0.5% whilst ANZ fell 0.5%. Miners were better led by BHP bouncing back 1.3% and FMG up 1.5%. Gold miners too were enjoying a day in the sun after some profit taking earlier this week, NCM up 2.9% and EVN up 3%. Healthcare was mixed with CSL down 0.4% and SHL up 1.3%. Corporate news dominated, APT rose 10.8% after good numbers and a UK and US update. BAL finished down 1.4% after bigger losses earlier and OZL rose 5.7% after its results beat expectations. On the economics front, construction activity fell 3.8% worse than expected. 10-year yields rose 2bps to 0.90% and Asian markets mixed with Japan up 0.18% and China down 0.23%

Today’s Highlights

  • ASX 200 up 29 points to 6501 in  firm trade
  • High 6501 Low 6462. Narrow range good volume.
  • TLS ex dividend.
  • Banks miss out on rally. MQG raises $1bn at $118.
  • Miners and energy stocks lead the way.
  • Results continue top dominate with large moves.
  • Infrastructure stocks gain despite rising yields.
  • AUD steady at 67.40c
  • 10-year yields 0.90%
  • Aussie gold rises to $2285
  • Bitcoin slightly lower to $10139
  • US futures up 81
  • Asian markets mixed with Japan up 0.18% and China down 0.23%

STOCKS

  • ISX +17.96% fires up on results.
  • FXL +17.67% ‘Bundll’ rally continues.
  • PNV +11.11% soars to a new record.
  • GEM +8.60% broker upgrade and bargain hunting.
  • BLD +6.63% bargain hunting. Bottom in?
  • CVN +5.48% Dorado – 3 update.
  • JIN +5.49% winner takes home $96m. A great advert for the product.
  • ING -4.18% still looking fowl after results.
  • HVN -2.52% results beckon.
  • SDA -33.19% question marks on survival.
  • AJL -30.56% fracking issues in UK.
  • GGG +7.41% buying continues on country focus.
  • SYR +6.25% miracles happen.
  • SZL +16.10% BNPL back in vogue on APT results.
  • STX -5.45% WGO -4.84% profit taking.
  • Speculative stock of the day:OneMarket (OMN) +19.40% AGM address following by a trading halt. Strategic review to close up the discount to cash assets seems to have worked.
  • Biggest Risers: ISX, FXL, PMV, OPT, APX, APT and PME
  • Biggest Falls: VAH, SGF, ALG, FNP, BIN and EBO

TODAY

  • Afterpay (APT) +9.32% Results – Pro forma EBITDA (excluding significant items) stable at $35.5m, notwithstanding international start-up investment. Gross losses reduced to 1.1% in FY19 from 1.5% in FY18. Global underlying sales of $5.2bn in FY19, a 140% increase compared to the previous corresponding period. Stable merchant income margins were achieved during FY19 at 3.9% pro forma. Late fee income as a percentage of total APT statutory income of 18.7%, declining materially from 24.4% in the pcp. US underlying sales continued beyond expectations, increasing to almost $1 billion in the first full year of operations. Run-rate in excess of $1.7bn. UK startup going well better than US at same point in time. Currently on-boarding over 12,500 new customers per day. This is a $6.5bn company making EBITDA of $35.5m.
  • Bega Cheese (BGA)+5.79% Reports FY normalized NPAT $38.3m vs consensus $38.5m. Revenue $1.42bn vs year-ago $1.25bn. Normalised EBITDA $115.4m vs guidance of $113-117m and consensus of $116.0m. Final dividend declared of 5.5c per share (fully franked). Outlook: The competition for milk has never been stronger than in Q4 of FY19 and in setting the FY20 milk price. Whilst global dairy commodity prices remain strong Bega Cheese will continue to monitor milk supply expectations across Europe, the US and New Zealand which may impact pricing in H2 of FY20.
  • Macquarie Group (MQG) – Trading halt-  Outlook – The 1H20 result is expected to be up approximately 10% on the 1H19 result but down on a strong 2H19, which benefited from increased contributions from the markets-facing businesses. $1.0bn institutional placement at 11800c. An SPP also offered post completion of the Institutional Placement. Placement Price will be determined via a bookbuild process. Placement represents approximately 2.5% of total existing Macquarie shares on issue. The SPP will be done either at the placement price or a 1% discount to the volume-weighted average price traded during the five ASX trading days immediately prior to and including the SPP closing date
  • Adelaide Brighton (ABC) +0.96% Reports H1 underlying NPAT $55.3M vs consensus $52.9m. Revenue $755.7m vs consensus $724.2m. Underlying EBIT $85.2m vs consensus $83.3m. As previously announced will not declare interim dividend. Repeats FY Guidance: underlying NPAT, excluding property, is anticipated to be in the range of $120 -$130m.
  • Aveo Group (AOG) – unchanged – Reports FY underlying NPAT $50.1m vs consensus $52.8m. Revenue $274.8m vs $313.7m. Adjusted EBITDA $71.1m vs consensus $72.6m. A final dividend of 4.5c per share was declared.AOG recorded a statutory loss after tax of $213.4m largely due to a decrease in investment property valuation of retirement portfolio.
  • Bellamy’s (BAL) –1.37% Results- FY normalised NPAT $30.1m vs forecasts $35.4m FY19 was a challenging period, impacted by regulation, a lower birth rate and increased competition for Chinese demand. FY19 net revenue of $266m and normalised EBITDA was $47m (17.6%). Revenue $266.2m vs guidance of $275-300m10-15% group net revenue growth at an EBITDA margin consistent with last year. EBITDA margin 17.6% vs guidance of 18-22%. BAL remains confident in its growth strategy and medium-term target of $500m revenue but has deferred this target beyond FY21 given the ongoing SAMR registration process.
  • National Storage REIT (NSR) +1.34% reports FY underlying earnings $62.4m vs $62.4m. Total Revenue $152.2m vs $135.3m a year ago. NPAT $144.7m vs $154.8m. Distribution 5.1c. Record 28-Jun, payable 5-Sep. Numbers OK with nice revenue growth, and FY20 guidance looks positive, with the company forecast underlying earnings growth of greater than 25%, with underlying EPS of greater than 4%.
  • Oz Minerals (OZL) +5.72% reports H1 underlying NPAT $43.9m vs $90.7m expected. Revenue $419.2m vs $487.8m expected. Underlying EBITDA $162.5m vs $215.3m expected. Interim dividend of 8 cps (fully franked). FY production guidance is unchanged, while the outlook for revenue is positive. 2019 production tonnes are committed for the remainder of the year and smelter demand rebounding strongly in H2. Underground production rates at Prominent Hill continue to improve and C1 costs are currently expected to finish the year at the lower end of guidance.
  • Virgin Australia (VAH) -6.06% reports FY underlying PBT ($71.2m) vs ($43.4m) expected. Revenue $5.83bn vs $5.75bn expected. Statutory NPAT ($315.4m) vs ($653.3m) a year ago. Loss includes non-cash impairment of Tigerair and VA International business units, derecognition of deferred tax assets, and restructure costs. EBITDA $460.8 vs $467.3m expected. Poor numbers and a soft outlook with the company noting challenging trading conditions have continued into Q1; FY20 fuel and foreign exchange headwinds of approximately $100m when compared to FY19 anticipated.
  • Australian Ethical Investment (AEF) +5.77% reports FY UPAT attributable to shareholders $6.5m vs guidance $6.4-6.6m. Revenue $41.0m vs year-ago $36.0m Final div 3c. Ongoing growth in FUM and strong inflows expected to drive continued profit growth.
  • LiveHire (LVH) – Full-year results; NPAT up 37% to ($13.8m) vs consensus ($13.1m). Revenue up 57% to $2.6m vs consensus $1.9m. Management EBITDA ($13.3m) vs year-ago ($9.1m). No guidance was provided.

Fisher & Paykel Healthcare (FPH) +5.60% FY20 guidance upgrade; expects operating revenue of NZ$1.17bn vs prior NZ$1.15bn. NPAT expected to be in the range of NZ$245-255m vs prior NZ$240-250m.

ECONOMIC NEWS

  • Construction work done Australia (June quarter): -3.8% (consensus -1%).

BOND MARKET

  • 2 – year bond yields up 3bps to 0.72%
  • 3 – year bond yields up 3bps to 0.68%
  • 10 – year bond yields up 2bps to 0.90%

ASIAN NEWS

  • Asian governments are fighting back with stimulus measures.

EUROPEAN AND US NEWS

  • In the UK, the new Treasurer is preparing a new spending plan in anticipation some say of a general election. Health, schools and the Police to get a lot more money. In the meantime, the Labour party has joined with other No Deal Brexit parliamentarians to fight Boris’s plan to take the UK out of the EU come what may.
  • Finally in the UK, the banking regulator is drawing a line under the PPI(Payment Protection Insurance) issue that has plagued banks and others for years. In total lenders have set aside £45bn to pay out in compensation with around £35bn having been paid out to claimants so far. The deadline is 29th August for applicants to get in their compensation claims. This issue has cost CYB a fortune over the years.
  • Bury has been expelled from the English Football league. Has been around for 131 years. One of the oldest clubs. For all the glamour of the Premier league, the smaller clubs are really struggling. Bolton Wanderers have been given 14 days to restructure or face the same fate. Football is a microcosm of the global economy. The have do exceptionally well but the have nots fall by the wayside.

And finally…..

A man and woman were having marriage problems, and decided to end their union after a very short time together. After a most brief attempt to reconcile, the couple went to court to finalise their break-up.

The judge asked the husband, “What has brought you to this point, where you are not able to keep this marriage together?”

The husband said, “In the six weeks we’ve been together, we haven’t been able to agree on one thing.”

The wife said, “Seven weeks.”

The rain was pouring and there was a big puddle in front of the pub.

A ragged old man was standing there with a rod and hanging a string into the puddle.

A tipsy- looking, curious gentleman came over to him and asked what he was doing.

‘Fishing,’ the old man said simply.

‘Poor old fool,’ the gentleman thought and he invited the ragged old man to a drink in the pub.

As he felt he should start some conversation while they were sipping their whiskey, the gentleman asked,

‘And how many have you caught?’

‘You’re the eighth.‘

Clarence

XXX

mt_tryforfree
Financial Markets and Political Commentary
 

Tags

, , , , , ,

Related Posts

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