ASX 200 up 70 points to 5461 in a solid start to the week. Australian Market Wrap. Headlines, Stocks, Bonds, Economic & Asian Market News. END of DAY REPORT with Henry Jennings.

 

The ASX 200 up 70 points to 5461 in a solid start to the week.  Dow futures showing small gains, up 35. Broad rally kicks off the week as hopes of an early opening and a V-Shaped recovery, fuelled buyers. Talk too of a thawing of US/China relations and a further stimulus package for the American economy helped sentiment. Banks were better generally with CBA up 0.9% and MQG doing very well on broker upgrades, the fifth Beatle up 6.0%. The Big Bank Basket rose to $107.56. Miners were bid too with BHP up 0.5% and FMG up 0.6%. Even gold miners rose with NCM up 0.7% and EVN up 2.2% despite falls in the AUD bullion price. Tech stocks and fintechs in particular were rallying hard, APT hit a record at one stage before fading to be up 5.7%, EML up 2.0% and WZR up 2.8%. The All Tech Index up 1.5%. Retail stocks back in fashion too, MYR up 8.6%, KMD up 15.43% and payments provider TYR had a great day up 8.8%. Travel stocks also in demand led by WEB up 19.4% and FLT up 4.3%. REITs and bond proxies better, GMG up 1.5% and SYD up 3.7% as hopes for some runway use at Sydney grew. Energy stocks rallied too as the oil price is looking better again. June WTI expire May 19th. In corporate news, MSB is raising $100m at 320c, ELO is tapping the market too, ANO up 20.3% on a business update. The 10-year yield rose to 0.95%. AUD rallying to 65.46c.Asian markets mixed with Japan up 1.5% and China down 0.1%.

  • ASX 200 up 70 to 5461.
  • High 5489 Low 5406. Solid start to the week.Average volume.
  • Across the board rally. Off highs at close as Dow futures wane up 35.
  • All Tech up 1.5%
  • 10-year bond yields rise to 0.95%
  • AUD rallies to 65.46c
  • Aussie gold slips to $2604
  • Bitcoin falls to US$8680 after flirtation with $10,000.
  • Asian markets mixed with Japan up 1.5% and China down 0.1%. HK firms 1.6%

STOCKS                                               

  • WEB +19.45% reopening hopes.
  • KMD +15.43% everybody’s gone surfing.
  • EOS +11.37% capital raising clears air.
  • BUB +9.30% no kidding heading higher.
  • TYR +8.85% another positive business update.
  • IGL +20.92% kicks on a reopening economy.
  • ECX +17.83% credit funders back in fashion.
  • SXL +18.52% broker upgrades.
  • HSN +9.43% tech stocks rally.
  • APT +5.74% record high at one point
  • FLT +4.28% travel stocks are back, maybe a little premature.
  • KGN -3.91% some profit-taking.
  • CDA -2.26% profit-taking.
  • LTR -4.17% Kathleen Valley resource increase.
  • SLC +13.14 starting to gain some momentum.
  • GNC -4.17% China playing hardball on Barley.
  • ANO +20.26% profit update.
  • MSB – raising $100m at 320c.
  • SCG +3.64% says 57% of retailers now open. No dividend though.
  • SUN +4.15% surprise executive resignation.
  • ELO -% $90m Mr Blue Sky raise.
  • REH +1.95% new CFO
  • Speculative stock of the day: TNT Mines (TIN) +193.48%. Acquisition of high- grade US uranium and vanadium project.
  • Biggest Rises: WEB, KMD, NWH, EOS, APR, HSN, BUB and TYR.
  • Biggest Falls: GNC, CSR, KGN, JMS, CGF, PAT, RMS and YAL.

TODAY

  • Scentre Group (SCG) +3.64% All 42 Westfield Living Centres have remained open and trading throughout the March quarter. 57% of retailers are now open and trading, with significantly more retailers to reopen over the coming weeks. Targeting more than a 25% reduction in operating expenses during the pandemic period. In April, the group increased liquidity to $3.1bn. Comp-store sales for March (for retailers that traded in March) specialty stores (25.9%), majors (2.3%).
  • Incitec Pivot (IPL) – Raising $600m via institutional placement at 200c/share and up to $75m through a SPP. Reports H1 NPAT $64.6m vs consensus $59.4m. Revenue $1.85bn vs consensus $1.83bn. EBIT $159m vs consensus $147.9m. No dividend declared. The fertiliser business was weighed down by record low commodity prices, as well as drought conditions in the first four months. Improved weather conditions have driven record demand over the last three months.
  • Reece (REH) +1.95% CFO Gavin Street will move to the role of CEO – Australia and New Zealand. To be replaced by Andrew Cowlishaw.
  • Cochlear (COH) +5.14% A significant decline in surgeries across major markets has materialised, as expected. Sales revenue across the business declined by 60% in April vs year ago. Cochlear implant unit sales have fallen by 80% across developed markets; its services business has also been hit with April sales declining by 30%. Continues to expect that many of the delayed surgeries will progress once hospitals resume normal operations. Longer-term COH sees a significant, unmet, and addressable clinical need for cochlear and acoustic implants.
  • CIMIC Group (CIM) +0.52% Q1 NPAT $166.0m vs year-ago $181.1m. Revenue $3.31bn vs year-ago $3.41bn. EBITDA $521.3m vs year-ago $502.3m. Work in hand $36.07bn. New work $2.5bn. Unable to provide FY20 profit guidance, previous guidance was for FY NPAT between $810-850m. Outlook across the group’s core markets remains positive.
  • Suncorp (SUN) +4.15% Announces $133m COVID-19 related provision and a $90m non-cash impairment charge. Expects reduced motor claims volumes, increased landlord loss of rent claims, and negative mark-to-market movements on its investment portfolio. GWP to be impacted by lower economic activity as well. FY20 Group costs to be slightly above $2.7bn. Notes it remains well-positioned with sound capital, funding, and liquidity. Final dividend to be considered through its year-end process. Lending portfolio expected to contract in Q4. Net interest margin forecast towards the top end of the 1.85–1.95% range. CET1 ratio at 9.02% vs target operating range of 9.0% to 9.5%.
  • Pendal Group (PDL) +5.22% H1 cash NPAT $86.6m vs consensus $75.7m. Revenue $243.3m vs consensus $226.4m. Average FUM $98.9bn vs year-ago $97.4bn. Interim dividend of 15cps vs year-ago 20cps.
  • Charter Hall Long WALE REIT (CLW) +4.19% 45% of portfolio revalued, with net valuation flat. Portfolio 99.8% occupied with a portfolio WALE of 14.2 years. The entire portfolio will be independently valued on June 30.

ECONOMIC NEWS

  • Results from the first ABS Household Impacts of COVID-19 Survey show that in the first week of April, around 12% of Australians aged 18 and over with a job were working more hours than usual due to COVID-19, and around 24% were working less hours.
  • 2.2m Australians aged 18 and over have had a flu vaccination this year with another 12.2m intending to be vaccinated. However, 4.9m do not intend to have a flu vaccination this year.
  • Two-thirds (68%) still remain concerned or very concerned about their health due to the spread of COVID-19.
  • An ABS survey found that the proportion of people who had a job fell by 3% between early March and early April.

CV19 NEWS

  • NZ Prime Minister Jacinda Ardern said the nation will start a staged move down to Alert Level 2 on May 14.
  • Saudi Arabia ordered government spending cuts and austerity measures for about $26.6bn and a tripling of the value-added tax to alleviate the impact of the pandemic. Finance minister Mohammed Al-Jadaan said VAT will be increased to 15% from July 1.
  • Shanghai Disneyland reopens but no hugging Mickey.

BONDS

ASIAN NEWS

  • China announces more measures to stimulate and support economy. PBoC cuts short term SLSF loan rates.
  • Chinese car sales are rebounding. Car retail sales fell at a slower pace of 5.5% in April, following a 40% drop in March and a 79% plunge in February, PCA said.
  • Japan is set to impose foreign investment limits on around half of its listed companies. The new Foreign Exchange and Foreign Trade Act will require some foreign investors to report in advance if they buy more than a 1% stake. The previous threshold was 10%.

EUROPEAN AND US NEWS

  • Modest positive opening for European markets. UK resumes trade after holiday Friday.
  • Brussels and the UK resume Brexit negotiations.
  • France set to come out of lockdown Country divided into green and red zones.
  • UK finally, finally quarantines all arrivals except those from France. Too little too late.
  • As 20m American now hitting the jobs market, health insurance is lapsing. Bit concerning

And finally………………

Two foreign immigrants have just arrived in the United States by boat and one says to the other, “I hear that the people of this country actually eat dogs.” “Odd,” her companion replies, “but if we shall live in America, we might as well do as the Americans do.” Nodding emphatically, one of the immigrants points to a hot dog vendor and they both walk toward the cart. “Two dogs, please,” she says. The vendor is only too pleased to oblige, wraps both hot dogs in foil and hands them over the counter. Excited, the companions hurry to a bench and begin to unwrap their “dogs.” One of them opens the foil and begins to blush. Staring at it for a moment, she turns to her friend and whispers cautiously, “What part did you get?”

A man is getting into the shower just as his wife is finishing up her shower, when the doorbell rings.

The wife quickly wraps herself in a towel and runs downstairs. When she opens the door, there stands Bob, the next-door neighbour.

Before she says a word, Bob says, “I’ll give you $800 to drop that towel.” After thinking for a moment, the woman drops her towel and stands naked in front of Bob.

After a few seconds, Bob hands her $800 and leaves.

The woman wraps back up in the towel and goes back upstairs. When she gets to the bathroom, her husband asks, “Who was that?” ”

It was Bob the next door neighbour,” she replies. “Great,” the husband says, “did he say anything about the $800 he owes me?”

Clarence

XXXX

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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