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

 

ASX 200 gains 7 points to 6507 in a directionless market. Results creating interest as index goes nowhere. US futures down 43. Banks were firmer today after a couple of session of being under pressure. US banking moves helping. MQG returns from suspension having raised $1bn at a canter. The stock fell 0.8%. Industrials meandered around although healthcare rose led by CSL up 1% and RHC up 0.6% on results. In corporate news, WOW upped the dividend but dialled back the optimism and rose 0.5%. APX failed to score a perfect 10 and dropped 11.3% after a good start. CWN has halted its share sale to Melco amidst continuing inquiries, falling1.8%. PGL did just that up 3.4% after beating prospectus forecast and new kid FCL up 15.3% after doing the same. LNK had a great day up 9.4% on results whilst VGL had a day to forget down 29%. In economic news new capital expenditure fell by 0.7% in June. Bond market were sidelined with 10-year yields at 0.87% and Asian market slightly weaker with Japan down % and China down %. AUD back to 67.25c

Today’s Highlights

  • ASX 200 up 6 points in directionless trade.
  • High 6511 Low 6475. Narrow range. Results dominate.
  • Banks turn positive.
  • Miners wilt in sunshine.
  • Gold miners back in fashion as AUD gold approaches $2300
  • Industrials mixed.
  • Healthcare better.
  • AUD slightly lower at 67.25c
  • 10-year yields 0.87%
  • Yuan is down almost 4% this month
  • Aussie gold rises to $2295
  • Bitcoin slightly lower to $9607
  • US futures down 43
  • Asian markets modestly lower with Japan down 0.01% and China down 0.17%

STOCKS

  • FCL +15.32% beats forecast.
  • GEM +5.83% change in substantial holding.
  • KGN +3.54% broker upgrade.
  • BYE +19.05% finds hydrocarbons.
  • APT +4.74% broker upgrades.
  • MFG -5.96% heat leaving stock.
  • PET -7.35% profit taking.
  • BAL -5.04% broker downgrades.
  • EHL -5.32% sell off continues.
  • BID +39.80% after deal with ORG.
  • OZL -4.67% broker downgrades.
  • NEA -4.64% selling continues.
  • CAT -7.75% high PEs unwind.
  • ALX +2.16% cuts US road value as traffic detours.
  • WZR -7.41% change in substantial holding.
  • EXL -5.37% results disappoint.
  • CWN -1.81% problems with Melco deal.
  • HUO +1.11% jellyfish bloom increases costs.
  • EDE +2.00% first international order.
  • Speculative stock of the day: Total Brain (TTB) +45.83% partnership with IBM which embeds its technology in IBM’s THRIVE360° of Mental Fitness platform as core functionality of its GRIT program. Financial terms between IBM and Total Brain will be contracted this quarter. Total Brain is a mental health and fitness platform powered by the world’s largest standardised brain database.
  • Biggest Risers: FCL, LNK, GEM, ASL, APT, SWM and KGN.
  • Biggest Falls: VGL, PET, APX, AMI, NXT, MFG and EHL.

TODAY

  • AP Eagers (APE) +2.61% report H1 underlying operating PBT of $56.8m, up 1.8% on a year ago. Revenue declined marginally to $2.06bn, while EBITDA ($103.7m) and NPAT ($42.4m) fell 5.4% and 17% respectively. A fully franked interim dividend of 14c has been declared.
  • Appen (APX) –11.33% report H1 underlying NPAT of $29.6m, ahead of the expected $25.2m. Revenue for the half came in slightly above expectations at $245.1m (vs $242.3m), as did adjusted EBITDA at $46.3m (vs $40.1m). An interim dividend of 4c has been declared. The company expects FY underlying EDITDA to be at the upper end of $85-90m guidance.
  • Cromwell Property Group (CMW) -1.61% Reports FY Operating profit $174.2m vs consensus of $163.0m. Statutory NPAT $159.9m vs consensus $189.0m. Operating profit 8.21 cps vs company guidance of not less than 8.00 cps. FY DPS 7.25 cps vs company guidance 7.25 cps. FY20 Guidance: Operating profit is affirmed at the upper end of previous guidance at 8.30 cps and distributions to at 7.50 cps.
  • Lynas Corp (LYC) – Reports FY NPAT $80.0m vs consensus of $58.5m. Revenue $363.5m vs consensus $365.8m. EBITDA $100.7m vs consensus $108.1m. Production Update: Lynas Malaysia is yet to receive approval for the uplift in the lanthanide concentrate processing limit for CY19. While the company continues to work with the regulator regarding approval, production will be at reduced rates during the second 6 months of CY19. If the approval is not received in time, total NdPr production for CY19 will be similar to CY18.
  • Link Group (LNK) +1.72% Reports FY operating NPATA $201.5m vs year-ago $206.7m. Revenue $1.40bn vs consensus of $1.40bn. Operating EBITDA $356.1m vs consensus $355.6m. A final dividend of 12.5c per share was declared. LNK also announced an on market share buy-back of up to 10% of issued capital
  • NextDC (NXT) -6.71% Reports FY statutory NPAT ($9.8m) vs consensus ($2.9m). Revenue $179.3m vs guidance $180-184M and consensus of $177.6m. Underlying EBITDA $85.1m vs guidance $83-87m and consensus of $84.4m. Underlying capital expenditure of $378m vs guidance $430-470m. Customers 1,184, +22%y/y. FY20 Guidance: revenue expected in the range of $200-206m. Underlying EBITDA expected in the range of $100-105m. Capital expenditure expected between $280-300m
  • Prospa (PGL) +3.45% report FY EBITDA of $6.8m, beating expectations of $6.1m. Revenue also came in ahead of estimates at $136.4m (vs $130.4m). Statutory NPAT came in at -$24.7m which included $22.3m of IPO costs. Loan originations came in 3.1% ahead of the prospectus numbers, up from $367.3m a year ago. The company is on track to deliver CY19 pro forma prospectus forecasts of $156m revenue, $10.6m EBITDA and $559m of originations.
  • Ramsay Health Care (RHC) -0.64% Reports FY core NPAT $590.9m vs consensus of $585.0m. Revenue $11.55bn vs consensus $11.39bn. Core EBITDA $1.59bn vs consensus of $1.56bn. Final dividend per share 91.5c, +5.8% y/y. FY20 Outlook: Core EPS growth on a like-for-like basis of 2-4%. EBITDAR growth of 8-10%.
  • Woolworths Group (WOW) +0.55% reports FY NPAT from continuous operations of $1.75bn vs $1.73bn expected. NPAT came in at $2.69bn vs $2.52bn expected. Sales from continuing operations $59.98bn vs $60.33bn expected. EBIT $2.72bn vs $2.70bn expected. The final dividend was 57cps (fully franked); record 4-Sep, payable 30-Sep. The CEO said “In F20, we expect headwinds from a challenged consumer environment, the cost impact of our new enterprise agreements and input cost pressures; however, we have begun the year with momentum.”

ECONOMIC NEWS

  • The trend estimate for total new capital expenditure fell by 0.7% in the June quarter 2019 while the seasonally adjusted estimate fell by 0.5%.
  • The trend estimate for buildings and structures fell by 1.8% in the June quarter 2019 while the seasonally adjusted estimate fell by 3.3%.

BOND MARKET

  • 2 – year bond yields unchanged at 0.71%
  • 3 – year bond yields unchanged at 0.67%
  • 10 – year bond yields down 1bps to 0.87%

ASIAN NEWS

  • The yuan is the worst-performing currency in Asia since May. It has plummeted by almost 4% in August — set for its biggest monthly drop since January 1994.
  • Chinese President Xi Jinping will deliver a major speech on October 1st  to mark 70 years since the official founding of the People’s Republic of China.There will also be a national day parade showcasing China’s advances in military technology. Sound like a country backing down?
  • Hong Kong police have banned a mass rally this weekend citing safety concerns.

EUROPEAN AND US NEWS

  • Mexico downgrades its growth forecasts again.
  • More ‘outrage’ and political shenanigans from Westminster.
  • Italian parties finally agree on a new government.

And finally………..

“I just deleted all the German names off my phone. It’s Hans free.”

“Surely every car is a people carrier?”

“Jesus fed 5,000 people with two fishes and a loaf of bread. That’s not a miracle. That’s tapas”

“The first time I met my wife, I knew she was a keeper. She was wearing massive gloves”

“Red sky at night. Shepherd’s delight. Blue sky at night. Day”

“Whenever I get to Edinburgh, I’m reminded of the definition of a gentleman. It’s someone who knows how to play the bagpipes, but doesn’t”

Clarence

XXX

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