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

 

ASX 200 drops 92 points to 6722 as bank sector craters on WBC/AUSTRAC civil case. US futures ease 45 points as Trump threatens more tariffs. Broad based losses with few signs of positive sentiment. ALL escaped the carnage rising 6% on a better than expected AGM update. Banks the clear casualties today with WBC dropping 3.3% and NAB in a similar boat down 3.1%. Other financials caught the disease and MQG fell 2% together with ASX down 1.7%. Consumer discretionary stocks , the roosters yesterday were feather dusters today, WES down 0.8%, WOW off 1.5% and TWE down 0.9%. Healthcare too under pressure as CSL took a breather down 1.5%. In the miners BHP fell 0.6% and RIO fell 0.8% on Mongolian issues again. Golds too under pressure as SAR returned to trade and fell 8.9% to close to the placement price. Energy stocks weaken with WPL down 1.3% and STO down 1.5% falling victim to the falling oil price. Bond proxies reversed yesterdays gains with SYD down 2.2% on traffic numbers and TCL down 2%. In corporate news, once again, AGMs were the focal point as many fund managers took the time to meet the boards. ALQ rose 12.1% after some good results, GMG dropped 2.4% on its AGM comments and general weakness, SVW down 1.8% on AGM comments and ALL spun the wheel running 6% higher on results. On the economic front, we saw the Westapc MI Index which had little effect but Trump talked tough on tariffs and sent buyers running for cover. 10year bonds dropped 5bps to yield 1.08%, a far cry from the 1.30% only a few days ago. Asian markets still on edge over HK with Japan down 0.75% and China down 0.49%. HK is down 0.6% and square for the year.

  • ASX 200 down 92 to 6722.No where to hide. Banks down over 2% as a sector.
  • High 6812 Low 6715. Volume picking up on the slide.
  • Trump threatens more tariffs if China doesn’t deal.
  • Banks collapse with WBC AUSTRAC issues.
  • Miners outperform but energy under pressure.
  • Reversal in consumer and bond proxies.
  • 10-year bond yields weaker at 1.18%
  • AUD higher at 68.16c
  • Aussie gold steady at $2163
  • Bitcoin falls to US$8122
  • US futures down 46 points.
  • Asian markets down with Japan down % and China down %.

STOCKS                                               

  • TNE +11.08% broker upgrades on AGM Update.
  • ALQ +12.13% half yearly results.
  • PME +4.33% broker upgrades.
  • A2M +3.52% brokers warm to milk margin story.
  • AAC+3.96% AGM positive comments.
  • SAR -8.87% ex-entitlement.
  • PPK -6.29% comes to a grinding halt.
  • APX -4.91% profit taking.
  • PNV -4.83% sell down continues broker downgrades.
  • APE -2.03% broker downgrades continue.
  • PGL -12.64% broker downgrades.
  • MLX -10.34% heading lower.
  • WEB +3.54% eyes earnings growth
  • MIN +0.41% 108m tonne mineral resource at its Yilgarn iron ore business.
  • VHT -5.50% disappointing update.
  • PTM -3.59% performance fees unlikely.
  • TWR +9.84% full year results.
  • QAN +1.12% MS raises PT.
  • ORG -0.60% lifts guidance
  • ISX – still suspended but merging its tech team in Cyprus.
  • Speculative stock of the day: MetalsTech (MTC) +500.00% after acquiring an option over a gold project in Slovakia. Resource of around 1m oz ar 2.05g/t Au equivalent.
  • Biggest Risers: ALQ, TNE, ALL, MP1, LOV, IFM  and PME
  • Biggest Falls: SAR, ASB, PPK, APX, PLS and PNV.

TODAY

  • Westpac (WBC) -3.31% Acknowledges commencement of civil proceedings by AUSTRAC. In a statement the bank sais it “had previously disclosed that it had failed to report a large number of international funds transfer instructions (IFTIs) to AUSTRAC and that AUSTRAC was also investigating a number of other areas relating to Westpac’s processes, procedures and oversight.”
  • ALS Limited (ALQ) +12.13% First half underlying NPAT came in ahead of guidance, up 5.3% to $98.2m. Revenue of $919.1m was up 11.3%, driven by revenue increase from acquisitions (mainly in the Life Sciences division) and a favourable currency impact. An interim dividend of 11.5c was declared. Underlying NPAT in FY21 is anticipated to be in the range of $185-195m.
  • Australian Agricultural Co. (AAC) +3.96% Reports H1 net statutory loss of ($14.1) vs year-ago ($68.4). Revenue was down 27% to $182.8m. Net operating cash flow was down 63% to $11.0m. One positive note for the company, it recorded the strongest half-year Wagyu meat sales to date, +9.5%.
  • Aristocrat (ALL) +6.01% Reports FY Normalised NPATA of $894.4m vs consensus of $873.3m. Operating revenue was up 22.7% to $4.40bn. EBITDA was 20.2% firmer to $1.6bn. A final dividend 34c was declared. Revenue growth in the America’s was around $900m compared to a year ago. Digital revenue also jumped $400m.
  • LiveTiles (LVT) -4.62% To acquire Switzerland-based intelligent intranet software provider, CYCL AG for $19.0m upfront plus earn-out of up to $13.2m.
  • Platinum Asset Management (PTM) -3.59% Notes at AGM that in the absence of a strong uptick in markets over the next five weeks, it is likely to receive little, if any, investment performance fee income.
  • Webjet (WEB) +3.54% Provides trading update at AGM; expects H1 EBITDA of at least $80m vs consensus of $79.0m. WebBeds continues to grow TTV, revenue, and EBITDA in all regions and remains on track to deliver profitability target by FY22. In FY20 Underlying EBITDA is expected to be in the range of $157-167m, corporate costs expected to grow between 5-10%, and operating cash conversion expected to be in line with guidance of 95-110%. “We see a long runway of future profitable growth from all divisions,” managing director John Gusic said.
  • Rio Tinto (RIO) -0.83% Is facing a lawsuit in Mongolia over its Oyu Tolgoi gold & copper mine with allegations from a local NGO that the planning & funding of the mine was illegal. RIO has strongly refuted the claims.
  • WorleyParsons (WOR) –3.61% A large block trade of 13.6m shares was transacted late last night by Citi at 1384c. There is speculation that DAR Group has unravelled its equity swap and this move will take it to 23%.
  • Saracen Minerals (SAR) -8.87% Completes placement and institutional component of entitlement offer, raising $701m.

ECONOMIC NEWS

  • The Westpac–MI Leading index, lifted from –1.01% in September to –0.91% in October. The reading is materially below trend and continues to point to weak economic momentum carrying well into 2020.

BOND MARKET

  • 2 – year bond yields unchanged at 0.74%
  • 3 – year bond yields down 2 bps at 0.76%
  • 10 – year bond yields down 5bps at 1.08%

ASIAN NEWS

  • Alibaba is poised to raise about HK$88 billion (US$11 billion) which represents a 2.9% discount to the last close of Alibaba’s ADRs in New York. Alibaba is selling 500 million new shares, 12.5 million of which are set aside for individual investors. The company has an over-allotment option to sell an additional 75m shares. Alibaba will commence trading in Hong Kong on Nov. 26.
  • China has cut interest rates. The one-year loan prime rate was lowered to 4.15% from 4.2%.
  • The US Senate approved a bill which included the imposition of sanctions on Chinese and Hong Kong officials who carry out human rights abuses.
  • India’s economic growth probably hit a new low last quarter, with early forecasts showing expansion below 5%..Economists at State Bank of India, Nomura Holdings Inc. and Capital Economics Ltd. lowered their growth forecasts for the quarter ended September to between 4.2% to 4.7%. The government is scheduled to publish the data on Nov. 29.

EUROPEAN AND US NEWS

  • The first TV debate between Boris and Jez faced off last night. And the winners are? Anybody that did not watch it.
  • Tata Steel is planning to cut 3,000 jobs across its European operations.
  • Every time you think you are having a bad day, think of Prince Andrew.
  • Could be an interesting night tonight.

And finally…

My grandfather’s last wish was that we convert his ashes into a diamond.

That’s a lot of pressure.

 

I’ve been charged with murder for killing a man with sandpaper.

To be honest, I only intended to rough him up a bit.

 

What do you call an apology written in dots and dashes?

Re-morse code.

Clarence

XXX

mt_tryforfree

Financial Markets and Political Commentary

 

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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