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

 

ASX 200 closed unchanged at 6547 in once again low volume trade, Dow futures set the tone from the opening falling 300 points on reports the Chinese delegation was heading home after a day. At the close, the futures were down 33 points.  Initial optimism evaporated but the market did well to hold up in a see-saw day. Clearly, we are not expecting much from the trade talks. Banks slipped slightly with CBA down 0.1% and NAB down 0.14%. Big miners too under a little pressure led by BHP down 0.2%. Industrials though fared better as BXB gave an optimistic trading update and rose 3.5%. ORA galloped away by 14% after selling its fibre business to Nippon Paper for $1.7bn. Bond proxy stocks eased as TCL fell 0.4% after its investor day. In economic news, promising signs for the housing market with investor loans picking up 5.7% (highest in three years) as low rates and risk aversion to equities take their toll. In other corporate news, AMP has merged its banking and wealth mismanagement group and hit record lows down 0.3%. Asian markets were mixed despite the trade negotiation rumours with China up 0.47% and Japan down 0.12%. Locally 10-year bond yields were little changed at 0.89c and the AUD was becalmed.

Today’s Highlights

  • ASX 200 closes unchanged at 6547.
  • High 6571 Low 6530. Volumes well below average.
  • Banks soggy again so too miners.
  • Industrials mixed. BXB better.
  • ORA sells fibre unit to Japanese.
  • AMP hits record low.
  • Housing investment loans rise.
  • AUD steady at 67.42c.
  • 10-year yields steady at 0.89%.
  • Aussie gold steady at $2236.
  • Bitcoin rallies hard to US$8585.
  • US futures down 35, were over 300 down at one stage.
  • Asian markets mixed. Japan down 0.12% and China up 0.47%.

STOCKS

  • PNV +11.89% continues to march higher.
  • AVH +4.55% annual report.
  • NWL +3.14% FUM jumps.
  • ING +1.69% signs of a bottom.
  • CUV -14.76% profit-taking.
  • HVN -5.00% Ex-Div.
  • AMP -0.31% confirms merger of banking and wealth business.
  • CDD – shareholder approval to demerge.
  • PME -4.11% sector profit-taking.
  • ORA +13.92% sells fibre and will reward shareholders.
  • MTS -4.14% 7 – Eleven contract issues.
  • KGN -5.66% broker downgrade and ‘Shonky’ Award.
  • AX1 -4.27% change of director’s interest.
  • CTD -3.33% FLT +0.14% WEB +0.1% travel stocks under pressure.
  • ALC +6.12% quarterly results.
  • NAB -0.14% two shareholder resolutions to be put to AGM.
  • RDY +8.72% strategic acquisitions.
  • PO3 -13.21% thin as water.
  • SKT -19.23% loses the NZ cricket spark.
  • LCK +15.38% energy conference highlights gas supply issues.
  • Speculative stock of the day: Alice Queen (AQX) +27.50% after an ASX query following its Horn Island JV soil and rock chip sample report on 7th October.
  • Biggest Risers: ORA, PNV, AVH, BXB, CYB, NWL and SXY.
  • Biggest Falls: CUV, RSG, KGN, EQT, HT1, CIA and FXL.

TODAY

  • Orora (ORA) – the company has sold its Australiasian Fibre business to Nippon Paper for $1.7bn. The estimated net gain after costs and tax is around $225m, which will be recognised as a Significant Item.ORA intends to return in the vicinity of $1.2bn, being the majority of the net proceeds, to shareholders, in the most efficient way through capital management initiatives.
  • Bank of Queensland (BOQ)+ 0.21% has appointed Ewen Stafford as CFO and COO. Stafford is currently a partner at Deloitte, with a focus on strategy within the banking and capital markets sector. Deputy CFO Racheal Kellaway will act as interim CFO until Stafford takes his post.
  • Transurban (TCL) -0.40% Chairman Lindsay Maxsted has reiterated FY20 distribution guidance of 62c at the companies AGM. A Q1 update has also been provided, showing average daily traffic (ADT) up 1.8% on last year’s number, having increased across each of the Groups locations.
  • Viva Energy (VEA) -2.46% are free to acquire the remaining 50% stake in Liberty Oil Holdings wholesale business after the ACCC announced they won’t oppose the proposed acquisition.
  • Brambles (BXB) +3.54% provide Q1 update at AGM. Sales revenue from continuous operations up 5% on last years number in constant currency terms, up to $1.16bn. FY20 guidance is unchanged, with the company continuing to expect sales revenue growth to be at the lower end of the mid-single digit objective, underlying profit to be in line with or slightly above that level and US margin to improve by 1% annually in each of FY20, FY21 and FY22.

ECONOMIC NEWS

  • The value of new lending commitments to households rose 3.2% in August 2019, seasonally adjusted, according to the latest Australian Bureau of Statistics (ABS) figures.
  • The rise in new lending commitments to households in August follows a 4.3% rise in July and a 1.8% rise in June 2019.
  • The rise in lending to households was driven by refinancing of household loans (up 7.7%), followed by investment dwellings excluding refinancing (up 5.7%) and owner-occupier dwellings excluding refinancing (up 1.9%).
  • The Bad News: Personal finance excluding refinancing fell 2.2% in seasonally adjusted terms in August 2019 and is down 17.8% on August 2018. In trend terms, the value of lending commitments to businesses fell 2.0% in August 2019 and is down 5.3% in August 2018.

BOND MARKET

  • 2 – year bond yields unchanged at 0.61%
  • 3 – year bond yields unchanged at 0.61%
  • 10 – year bond yields up 1bps to 0.89%

ASIAN NEWS

  • The US is weighing a currency pact with China as art of a trade deal.
  • Hong Kong is on the verge of its first recession.

EUROPEAN AND US NEWS

  • Cautious opening for European markets.
  • Guess who’s coming to dinner? The Chinese, or will they leave early as the Chinese media says? Trump has ordered pizza just in case. Maybe not Chinese takeaway.
  • US may announce some Huawei concessions.
  • Merde! The England v France game has been cancelled as a result of an impending typhoon.
  • The hits just keep on coming as the US administration is considering a crackdown on shipments of contraband from China.
  • Turkey launches offensive against Syria.
  • Brexit update: Not looking any better with increased chance of a delay and election. EU playing hard ball and issues ultimatum to Boris.
  • Links of London collapses with 350 jobs to go.
  • Greece has issued bonds with a negative yield. No typo.

And finally…keep those jokes coming…

Jill goes home one night with a guy she met at a club.

He’s tall, super hot, and seems different than most guys she meets. They arrive at his place and head straight to his room. Jill can’t help but notice a shelf full of teddy bears. On the bottom are small teddy bears, on the middle are medium-sized teddy bears, and finally, on the top are large teddy bears, all lined up beside each other. She begins to think that he is sentimental and sweet, and isn’t afraid to show it.

Her heart melts and she want to give him the best night of his life. They make mad passionate love all night and  in the morning, she slowly gets dressed, and smiles at him and asks, “How was that?”

He nods and says, “Not too bad at all. Help yourself to a prize on the second shelf!”

A Texan walked into a barbershop, sat on the barber’s chair and said, “I’ll have a shave and a shoe shine.” The barber (using a straight razor by the way) began to lather his face while a woman with the biggest, firmest, most beautiful breasts that he had ever seen knelt down and began to shine his shoes. The Texan said, “Young lady, you and I should go and spend some time in a hotel room.” She replied, “I’m married and my husband wouldn’t like that.” The Texan said, “Tell him you’re working overtime and I’ll pay you the difference.” She said, “You tell him.  He is the one shaving you ?!?.

Clarence

XXX

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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