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

 

 

ASX 200 sees a late surge as the computer traders fixed the prices at 5000. Well nearly, a huge 100-point rally in the match out saw the ASX 200 rise 262 to 4998.1 (+5.5%) market jumped out of the box at the opening up over 300 points before drifting backwards in the the early afternoon before once again, we saw buyers emerge at the close keeping momentum up after the bounce back and news emerged on an agreement on stimulus in the US.

Dow futures continue to be volatile down 50 points, swinging from negative to positive. Banks were a solid performing sector with the Big Bank Basket up to $110.61. CBA leading the charge up 9.5% and WBC up 9.2%. Other financials geared to market moves jumped with MQG up 5.8% and MFG up 18.9%. Insurers too rallied with QBE up 13.3% and IAG up 8.5%. In the miners, we saw good gains for BHP up 10.2% and FMG up 5.0% as iron ore prices bounced back. Gold miners too in demand with NCM up 6.9% and RSG up 22.2% together with GOR up 9.2%.

Energy stocks firmed in quality places. WPL up 7.4%, ORG up 6.2% though STO was more muted at a 4.3% gain. In the industrials, the defensives that have held up well during the rout were swapped for more leveraged stocks. CSL finished down 0.35%, RHC down 4.1% on surgery cancellations, FPH lost 8.2% as punters rotated to other names, WOW up 0.67% after NZ locked down, TLS too under pressure unchanged and it seems nothing is certain as IVC fell 12.1% after warning the market on implications for the funeral sector.

Tech stocks mixed, APT rose 33.8% whilst WTC fell 8.5%. The All Tech Index up 4.2%. As far as corporate news goes, QAN rallied 26.2% after finding some funding options, COH was the big news as it hit the market with a $850m capital raise at a 17% discount to effectively fund the lawyers in the now lost patent case in the US and shore up its balance sheet.

The 10-year yield rose to 0.91%, WTI crude futures up 5% and Gold off slightly. The AUD trading at 59.79c. Asian markets rallied on US markets, Japan up 5.7% and China up 2%.

  • ASX 200 up 262 to 4998.
  • High 5024 Low 4797. Volume drop again despite late surge of buying..
  • Dow up 100 points. Agreement reached perhaps?
  • Banks rally hard. Big Bank Basket up to $.
  • Miners bounce. Healthcare under some pressure COH in raise.
  • 10-year bond yields up to 0.91%
  • AUD bounces to 59.79c.
  • Aussie gold rises to $2695
  • Bitcoin rallies to US$6583
  • Asian markets stronger with Japan up 5.7% and China up 2%.

STOCKS                                               

  • APT +33.81% credit markets ease.
  • COH – capital raising.
  • TYR +34.11% approach to trading updates.
  • MFG +18.92% geared for rises.
  • BRG +19.64% coffee at home now?
  • ALL +22.24% bargain hunters still has online gaming.
  • NUF +18.48% HY results.
  • CLV -27.81% Results briefing.
  • IVC -12.15% PFP -5.22% death industry not so certain to benefit.
  • QAN +26.25% debt funding secured.
  • MVF +6.25% patients deferred.
  • WTC -8.49% profit taking as world closes down.
  • BAP -3.67% guidance withdrawn.
  • DMP -8.24% NZ closures.
  • SGR +0.31% Rien ne va plus. 90% of staff stood down.
  • WES +5.46% NZ Closures.
  • CIM +2.56% Hola. Spanish continue buying up to 74.9%.
  • CBR +7.95% hit by Italian lockdowns.
  • FAR -10.00% delays to Senegal project. Not a surprise really.
  • Speculative stock of the day: Nothing special on any volume.
  • Biggest Rise: TYR, APT, QAN, ALL, RSG, BRG, SCG and MFG
  • Biggest Falls: IVC, ONI, WTC, DMP, FPH, WGX and APE.
TODAY
  • Domino’s Pizza Enterprises (DMP) -8.24% to close NZ stores for four weeks. Notes the company’s balance sheet remains strong with significant headroom in its committed facilities and covenants.
  • Nufarm (NUF) +18.48% reports H1 underlying EBITDA $65.6m vs guidance of $55-65m. Revenue $1.48bn vs consensus $1.48bn. Underlying NPAT ($85.2m) vs consensus ($66.0m). Continues suspension of interim dividend. While the outlook for H2 is obscured by the uncertainties created by COVID-19, NUF expects stronger demand following the recent improvement in weather conditions.
  • Sigma Healthcare (SIG) –2.14%reports FY underlying NPAT $12.6m vs consensus $15.2m. Revenue $3.24bn vs consensus $3.15bn. Adjusted EBITDA $46.7m vs guidance $46-47m. No final dividend with the interim dividend in respect of FY21 also suspended. Expects strong growth for the year ahead following abnormally high demand. However, given the current uncertainty, no full-year guidance is provided for FY21.
  • Wesfarmers (WES) +5.46% To close Kmart NZ stores in response to COVID-19, Bunnings to remain open. Revenue from Kmart New Zealand represents less than 3% of the group’s total annual revenue. Confirms that the group will pay its previously declared fully-franked interim dividend of 75c/share.
  • Perenti (PRN) +9.38% defers interim dividend until 20-October.
  • InvoCare (IVC) -12.15% beginning to see an impact on core business from COVID-19 measures. IVC said the inability to provide a full range of services will impact performance. Unable to quantify the impact at this point. Deferring non-essential capex, including Protect & Grow investment. Hiring freeze.
  • Bapcor (BAP) -3.67% Has been performing in line with expectations since the start of the year, on track with FY guidance. However, business closures in Australia, New Zealand and Thailand due to the Covid-19 pandemic have made it impossible to currently make a forecast for the full-year.
  • Virgin Australia (VHA) +14.52% domestic capacity to be reduced by 90%, VAH has also temporarily grounded 125 aircraft. 10% of domestic capacity has been retained for transportation of essential services, critical freight and logistics. Approximately 80% of the workforce to be temporarily stood down.
  • Reliance Worldwide (RWC) +11.49% withdraws FY20 guidance & defers dividend. January and February sales were in line with expectations. RWC manufacturing facilities and distribution centres in Australia, USA and the UK remain fully staffed and operational. All non-essential capital expenditure has been halted, funding lines remain strong.
  • Cochlear (COH) – the company has launched a huge $800m capital raising as the impact of CV19 is expected to be worse than thought. The board has decided that the effects of the virus, together with the recent court judgement going against it, exposes the balance sheet and so it is raising cash. A $800m placement and a $50m SPP at 14000c.
  • The Star Entertainment Group (SGR) +0.31% announced it would be closing operations in Sydney, Gold Coast and Brisbane. Temporarily standing down over 90% of approximately 9,000 employees. Unable to reliably advise of the impacts on financial performance due to the uncertain duration of the current circumstances.
  • Qantas (QAN) +26.25% secures $1.05bn in additional debt funding. The funding increases the group’s available cash balance to $2.95bn with an additional $1bn undrawn facility remaining available. QAN’s net debt position remains at the low end of its target range, at $5.1bn, with no major debt maturities until June 2021.

ECONOMIC and CV19 NEWS

  • The RBA has provided another US$10bn via a US swap line. This is US dollar funding for domestic companies. The RBA will buy $2bn of state or ‘semi’ government bond. The central bank had bought $5bn of bonds last Friday, and $4bn of bonds each on Monday and Tuesday. This is the first time it will buy bonds issued by state governments.
  • New Zealand has declared a state of emergency.
  • The Federal Government has cancelled all elective surgery. PM has announced a new CV19 Coordination Commission led by Nev Power (ex-CEO FMG).
  • WA is starting to ration alcohol sales. The horror.

BOND MARKET

ASIAN NEWS

  • Hong Kong Chief CEO Carrie Lam has closed all bars and restaurants and they stop them stop selling alcohol in an attempt to dissuade residents from gathering in large groups.

EUROPEAN AND US NEWS

  • European markets look to be opening weaker by early futures quotes.
  • Trump is hoping for an Easter miracle with back to normal by then. Happened before.
  • Hydroxychloroquine, a medicine for malaria that President Donald Trump has proposed as a treatment for coronavirus, was no more effective than conventional care, a small study found. Bugger. The study involved just 30 patients. Of the 15 patients given the malaria drug, 13 tested negative for the coronavirus after a week of treatment. Of the 15 patients who didn’t get hydroxychloroquine, 14 tested negative for the virus.
  • NYSE has two more positive cases from trading floor. Closed now anyway.
  • Trump has stopped calling it a Chinese virus, but Navarro has said no roll back in tariffs.
  • Only in the US could crucial medical supplies be auctioned off on the web. Companies had commissioned a web site to sell masks, disinfectant wipes, cleaning solutions and hand sanitiser, all items in high demand. More than 750,000 medical-grade masks also went up for online auction in Texas. The health-related products pulled in $154,000 in sales, according to Houston-based website owner. The owner of the site made around $40,000 and his mum is very proud of his initiative.

  • The writer of Asterix has died. Albert Uderzo was 92. He wrote ‘Asterix and The Chariot Race’ in 2017 and got plenty of attention as his charioteer  who was set to win the big race, was called Coronavirus. Strange but true.
  • Goldman Sachs says its time to buy gold.

And finally….

I bought some shoes from a drug dealer. I don’t know what he laced them with, but I was tripping all day!

What’s black and white and goes around and around? A penguin in a revolving door.

5/4 of people admit that they’re bad with fractions.

What do you call a bear without any teeth? A gummy bear!

Clarence

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mt_tryforfree

Financial Markets and Political Commentary