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ASX 200 up 5.8 points at 5387.9 after a high of 5426 as selling on close hurts. China devalues again. Mainly ignored. AUD at 73.80 Telstra and News Corp amongst results today. US futures up 35 points.

  • The ASX200 has had a better performance today after yesterdays’ sea of red, however the market sagged late in the day as profit taking took its toll. CBA may return tomorrow.. Resources led the rally on the back of better commodity prices and even iron ore put on 3% in local trade as a huge explosion hit one of China’s major port areas in Tianjin. Banks were firmer as the CBA issue gets put to bed although the stock itself remains in a trading halt. Once again we saw the PBOC move the goalposts on the Yuan with yet another Yuan off 1.1% devaluation bringing the move this week to 4.6%.This time though the market was ready and largely ignored the movement unlike the trouble it caused yesterday.
  • Gold shares powered ahead following big gains in other overseas markets. Canadian gold stocks have risen 20% in the last five days and with positive price moves in gold we saw Newcrest (NCM) +2.98%, Evolution Mining (EVN) and OceanaGold (OGC) +7.17% very strong. In the big end of town BHP +1.23% and RIO +0.60% led Fortescue Mining (FMG) +1.68%. Still early days though for any sustained rally in the resource space and the moves in base metal stocks was more muted as Sandfire (SFR) +0.73%, Sirius (SIR) +2.21% and Independence Group (IGO) +1.81% managed smaller gains.
  • Energy stock also powered ahead led by Woodside (WPL) +1.82%, Oil Search (OSH) +1.76% and Origin (ORG) +2.95%. Liquefied Natural Gas (LNG) +5.36% also had a very strong day as they recovered from around 280c yesterday.
  • In the industrials today gaming stocks were a little weaker on the Crown Resorts result (CWN) -3.18% together with Tabcorp (TAH) -1.28% but Echo Entertainment (EGP) +3.41% rose after the fall yesterday. Volatility continues across the industrials as stocks like JB Hi Fi (JBH) -.43% gave up Wednesdays gains and Flight Centre (FLT) +6.92% rose after the loss yesterday. Some winners in the tech and media space were REA Group (REA) +6.43%, Seven West Media (SWM) +1.18% after the success of their new cat show and APN News and Media (APN) +2.27% but Computershare (CPU) -5.75% as the spill from the results yesterday continued.
  • Telstra (TLS) -2.24% was a disappointment today as the forward guidance seemed didn’t impress. Scores on the doors were a profit of $4.23bn and an increase in dividend to 15.5c. Whilst the result showed a 1% fall in net profit and a 0.9% slide in revenue, this was due to the sale of overseas business units. Continued growth in the mobile market is crucial where its mobile base grew by 298,000 to hit 16.7m as of June 30, 2015. By comparison, Vodafone Hutchison Australia has 5.255 m customers while Optus has around 9.43m. Mobile revenue was up 7%, the most in three years. This was the first outing for new CEO Andy Penn and he looks to be steering the company on a very similar course to David Thodey. Looked like no surprises and a focus on growth initiatives in Asia and data. There was some disappointment though as new man Penn said that surplus funds would be invested in the company rather than given to shareholders. He is looking at mid-single digit growth with the guidance seen as conservative. Interestingly for a phone company they generated just $3.75bn in revenue from fixed-voice services, less than 15% of its total revenue of $26.6bn. How times have changed.
  • Sirtex (SRX) +9.69% shares up after it lifted its full year profit 70 % thanks to increased sales of its liver cancer drug. Sirtex made a net profit of $40.3m for the year to June 30, up from $23.9m a year ago, while the company upped its final dividend six cents to 20 cents per share, fully franked. The result was driven by a nearly 20% increase in sales of its SIR-Spheres, a radiotherapy treatment for inoperable liver cancer.
  • News Corp (NWS) +4.76% revealed a full-year loss of $US149m ($202m) from the year-earlier net profit of $US237m thanks largely to a non-cash write-down in its education business, Amplify. Adjusting for impairments, News Corp reported a profit of $US272m for the year ended June 30, a 1.5 % increase from the previous in line with forecasts. They said full-year revenue edged up 1% to $US8.63bn from the year-earlier, EBITDA rose 11% to $US852m from the year-ago $770m.
  • Fairfax Media (FXJ) +4.91% beat expectations although underlying net profits fell 3.9% to $143.4m after tax and revenues 5.3% lower at $1.88bn. The final dividend is 2c per share, 50% franked.
  • Tabcorp (TAH) -1.28% has reported close to consensus with its annual net profit from continuing operations before significant items rising 14% to $171.3m from $149.4m. Net profit for the year ended June 30 jumped to $334.5m from $129.9m the previous year. Revenue rose 6% to $2.156bn from $2.04bn.
  • In other big news today Jamie Packer announced that he was stepping down as Chairman of Crown Resorts (CWN) -3.18%. He will still stay on the board but is going to be spending more time with his US asset. The company reported a 41% drop in profits as a result of the slowdown in their Macau operations. Melbourne looks to be doing well with growth of 17% but Perth at only 5.3% suffering as did the Chinese operation. He is now focussed on improving the online business and the upcoming casino in Sydney Barangaroo.
  • In Asia the PBOC devalued again but in a press conference stated that the rumours of a 10% move were ‘Nonsense’. This certainly went someway to calm the market as they said that they would ‘keep the yuan stable at a reasonable, equilibrium level’. To the markets and Shanghai was unchanged while Tokyo up 1% and Hong Kong up 0.4%.

And finally European markets are set to bounce back from the big losses yesterday. But expect volatility to continue as currency is the big story. Maybe we will see some news from the ongoing Greek debt situation too.

Clarence

xxx

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