ASX – signs of a few bargain hunters emerging. Australian Market Wrap. Headlines, Stocks, Bonds, Economic & Asian Market News. END of DAY REPORT with Henry Jennings.

 

The ASX 200 has posted a 25-point rise to 6949 following a positive lead from Wall Street. It is tentative but signs of a few bargain hunters emerging, although some enthusiasm was tempered following the RBA upbeat economic assessment and a stronger dollar. Miners continue to splutter as commodity prices fall with BHP up 0.2% though FMG up 1.45%. Banks though saw some reshuffling of the deck chairs with some broker recommendations driving a mixed sector performance. CBA fell 0.3% as one broker moved to underperform after the recent run, ANZ and NAB gained slightly as money flowed on a relative value basis. Elsewhere CSL resumed its rise up 0.6% and the healthcare sector in general rose, with RMD up 2.7% on a broker recommendation. Bond proxies remain in demand with SYD rebounding 2.1% as fears ease, TCL up 1.1%. Energy stocks under pressure still with WPL down 1.5% and OSH copping some PNG related downgrades and falling 2.5%. Having very positive days today were Z1P up 12.4% on broker upgrades, HVN up 5.9% on some short covering perhaps and OEC racing ahead by 35.7%. APT had a positive day up 4.8% after announcing its results timetable. In corporate news, TPW rose 23.3% after its results and ARB fell slightly down 2.4%, on an update pointing to Thai Baht issues. In economic news the RBA kept rates unchanged as expected with very little commentary on bushfires, droughts, or the emerging virus in China. The 10-year yield steady at 0.92%. In Asian markets, a slight recovery underway as Japan rose % and China up %

  • ASX 200 rallies 25 points to 6945. Cautious rally.
  • High 6963 Low 6915.
  • 10-year bond yields steady at 0.92%
  • Banks mixed. Miners under pressure.
  • Healthcare stocks better. Energy fades.
  • RBA leaves rates unchanged but still positive on economy.
  • AUD firms to 67.14c
  • Dow futures up points.
  • Aussie gold hovers around record highs of $2343
  • Bitcoin steady at US$9272
  • Asian markets feeling slightly better with Japan up % and Chian recovering %.

STOCKS                                               

  • JBH +3.47% short covering?
  • HVN +5.87% uptick on consumer confidence.
  • CMW unchanged- strategic review.
  • A2M -0.78% downgraded on virus issue.
  • TPW +23.32% good trading update.
  • Z1P +12.40% broker upgrade?
  • CDA +6.89% quiet rally continues.
  • TYR +3.63% finding new fans
  • PLS +8.77% bargain hunters.
  • BKL +7.59% broker says could win from virus.
  • PGH -5.20% selling continues.
  • OSH -2.53% PNG disappointment continues.
  • ARB -2.38% Thai takes away profit.
  • FDV +7.98% Bell Potter report.
  • LVT +6.25% Microsoft deal
  • Speculative stock of the day: Orbital Corp (OEC) +35.71% another stunning day following investor presentation. Liquidity still a slight issue.
  • Biggest Risers: Z1P, HVN, GMA, PAR, BKL, CDA and DTL
  • Biggest Falls: PGH, SM1, IFL, OSH, ORG and ARB

TODAY

  • BWP Trust (BWP) +0.49 reports H1 total revenue of $76.2m vs estimates $77.0m. LFL rental growth was up 2.2% y/y. BWP said it is well-positioned to deal with any changes in the macroeconomic environment pointing to low gearing, sustainable cash flow and good access to funding. FY20 distribution expected to be up 1% y/y.
  • SCA Property Group (SCP)+3.85% reports H1 funds from operations (FFO) per unit 8.44c vs year-ago 8.10c. FY20 FFO guidance lifted to 16.9c vs prior 16.7c. Distribution maintained at 15.10c per unit. NPAT was up 130% to $90.2m. EBIT was $109.9m vs year-ago $58.7m. An interim distribution of 7.50c per unit was declared.
  • Bubs Australia (BUB) +2.76% Expects disruption to outbound logistics due to coronavirus given the cancellation of many flights between Australia and China. No change to sales demand or outlook has been issued.
  • Australian Ethical Investment (AEF) +12048% Appoints John McMurdo as CEO and Managing Director.
  • Paladin Energy (PDN) – CEO Scott Sullivan to leave the company; Ian Purdy appointed as his replacement.
  • ARB Corp (ARB) -2.38% preliminary H1 revenue came in at $234m, up 7.1% y/y. Expects to report a reduction in net profit after tax of around 7.4%, reflects the significant strengthening of the Thai baht which has caused an increase in costs on a range of products manufactured in ARB’s Thai factories.

ECONOMIC NEWS

  • ANZ Roy Morgan Weekly Consumer Confidence Index last week lifted 0.5% to 108.5 points.

RBA Leaves rates unchanged

At its meeting today, the Board decided to leave the cash rate unchanged at 0.75%.

  • Global growth is expected to be a little stronger this year and next than it was last year, and inflation remains low almost everywhere.
  • With interest rates having already been reduced to a very low level and recognising the long and variable lags in the transmission of monetary policy, the Board decided to hold the cash rate steady at this meeting.
  • The Board will continue to monitor developments carefully, including in the labour market. It remains prepared to ease monetary policy further if needed to support sustainable growth in the economy, full employment and the achievement of the inflation target over time.

Coronavirus gets a mention, but bushfire impact seems to be a non-issue at the moment. This is it. In the short term, the bushfires and the coronavirus outbreak will temporarily weigh on domestic growth.

Tomorrow we will get to hear from Governor Lowe with his address ‘The Year Ahead’ – at the National Press Club, Sydney.

Future Fund chief executive David Neal will leave the organisation to join IFM.

BOND MARKET

ASIAN NEWS

  • A death from the coronavirus was reported in Hong Kong in what would be the second fatality outside mainland China, where the number of cases has topped 20,000.
  • The People’s Bank of China pumped 400 billion yuan (US$57 billion) into the banking system with reverse repurchase agreements on Tuesday, marking the largest single-day addition since January 2019. It set the yuan’s reference rate at 6.9779 per dollar,
  • Second day of stimulus helps Chinese markets.
  • President Xi Jinping called on all officials to quickly work together to contain a deadly new virus at a rare meeting of top leaders, saying the outcome would directly impact social stability in the country.

EUROPEAN AND US NEWS

  • Iowa Democrats said the results of their presidential caucus would be delayed due to a glitch.
  • Alphabet (Google) stock under pressure after results.
  • Tesla is now worth more than Volkswagen and has rallied nearly 30% in a week. The stock is up nearly US$360 this year. Shorts are getting crushed.
  • The search for yield continues as global junk bond issuance hits a record. Mike Milken would be happy.
  • Not quite so long suckers and thanks for the fish but it has been revealed that the EU Croatian envoy said Thanks and good riddance to the UK as Boris starts to talk tough on negotiations. Johnson cites EU/ Australia trade deal as the blueprint. Trouble is there is none.

And finally…

A blind man enters a bar and find his way to a barstool.

After ordering a drink, and sitting there for a while, the blind guy yells to the bartender, “Hey, you wanna hear a blonde joke?”

The bar immediately becomes absolutely quiet. In a husky, deep voice,the woman next to him says, “Before you tell that joke, you should know something. The bartender is blonde, the bouncer is blonde and I’m a 6′ tall, 200 pound blonde with a black belt in karate. What’s more, the fella sitting next to me is blonde and he’s a weightlifter. The woman to your right is a blonde, and she’s a pro wrestler. Think about it seriously, mister. You still wanna tell that blonde joke?”

The blind guy says, “Nah, not if I’m gonna have to explain it five times.”

 

Clarence

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