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A snapshot of today:

 

What happened today?

ASX 200 closed up 13.5 at 5256.1 near its highs, after a stunning performance this week. Banks lead the charge with consolidation the theme of the day. AGMS and trading updates continue with some positive surprises (Myer). Asian markets lose ground after early gains ahead of the weekend. Dow futures up 11.

A mildly positive day with good gains in the banking sector continuing. After a very positive week with two triple digit gain days it was always going to be a day of consolidation. After some early weakness the buying in financials helped us back into positive territory. The banks have been the big winners in the last week with the sector rallying from $160 for the combined four big banks share price to nearly $170. The catalyst appears to have been the CBA AGM and the international traders coming back into the market. Headlines in the papers today scream big banks ‘Look bloody cheap’. Think we have been saying that for a while. The other big story this week has been the BHP AGM and the continuing tragedy at Samarco. The stock is up around 30 cents for the week massively underperforming the ASX200.

We finished last Friday at 5051 and started with heavy falls on the Paris attacks before a good rally has seen us close at 5256 for a massive 200-point rally or 4%.

  • Banks were up around 0.8% with Commonwealth Bank (CBA) +0.87% the best of the four. Wealth managers were mixed with Macquarie Group (MQG) +0.64% andMagellan Financial (MFG)+0.56% outstripping Henderson Group (HGG) -0.47% andPlatinum Asset Management (PTM)-0.62%. Insurers were a little mixed as QBE-0.93% continue to ease. AMP +0.86% and Suncorp (SUN) +0.22% squeezed out gains but IAG -0.53% eased.
  • Telstra (TLS) -0.37% staged a remarkable turnaround this week bottoming at 512.5c against the close of 540c. Other Telcos have been similarly well supported withVocus (VOC)+2.15%. Macquarie Telecom (MAQ) +5.85% and M2 Group (MTU) +3.31% all stand outs.
  • Consumer stocks were stronger following the positive updates from Myer (MYR) +4.57% and Kathmandu (KMD) +4.08%. Lovisa (LOV) +4.92%, RCG Corp (RCG) +6.38%, Harvey Norman (HVN) +2.02% and Premier Investments (PMV) +1.53% all looking good today.
  • Resources were truing really hard to lift with BHP +0.39%, Iluka Resources (ILU) +2.1%, Independence Group (IGO) +3.4% and Mount Gibson (MGX) +5.26% a stand out. Iron ore miners RIO -0.14% and Fortescue Metals (FMG) -3.69% despite exploration results from the Mulla Mulla JV.
  • Energy stocks remain at the whim of the oil price. Santos (STO) -4.39% was a big loser as the rights finish trading early next week. STOR -38.3% were especially weak given the leverage. One of the tiddlers of the sector and a past market darling Buru Energy (BRU) +15.56% issued a good solid update top their Laurel Formation in WA.
  • Speculative stock of the day: Datadot (DDT) +38.1% following an AGM and trading update of a revenue growth of 11% and sales pipeline up 400% over the last 12 months.
  • Icarus award of the day goes to 1-Page (1PG) -13.41% that has fallen from 460 cents to 350 cents over the last ten days.

Corporate News

  • Sydney Airports (SYD) +2.51% showed positive traffic growth with domestic numbers up 1.8% and international up 3.7%. Chinese nationals were up 16.4% alone due to the golden week demand in early October.
  • Slater and Gordon (SGH) -12.13% AGM today with the much anticipated update. Unfortunately, despite reaffirming guidance for the year they were unable to give any more information regarding the ASIC inquiry and the market seemed disappointed not to have this issue behind them. Also as a result of slower-than-expected start to the year, operating cash flow is expected to be negative A$30-40m in the first half of 2016, with ‘a strong recovery’ expected in the second half.
  • Myers (MYR) +4.57%held their AGM today in Melbourne. First quarter sales for the department store chain increased by 3.4 % to $714.8 million, supporting its full year net profit guidance of between $64 million and $72 million. Myer has added 300 new brands since July, including Seed Women’s, French Connection and Nine West. Sales beat expectations of like for like stores sales of 1%. The clearance of brands in early spring was the major driver.
  • Kathmandu (KMD) +4.08% issued a sales update today reporting strong sales growth of 8.6% to NZ$91.3m as Australian same stores growth was very strong at 6.5%
  • Primary Healthcare (PRY) -7.5% issued a profit warning today now that it expects its underlying earnings and net profit for 2015/16 to be around 5% below last year’s due to Medicare funding cuts and weak market conditions
  • AV Jennings (AVJ) -1.82% after the AGM today following bumper results in 2015 lifting 78% as they reaffirmed guidance of an expected 1800 to 2100 signings for 2016 up from 1737 in 2015 and 1400 in 2014.

Economic News

  • A speech today from the RBA head of economic analysis Alex Heath as he said that the long decline in the dollar had boosted net service exports to levels where they were adding as much to economic growth as its resources sector. “While current growth in the Australian economy is not as strong as we would like, the evidence from previous terms of trade cycles suggests that we have actually done quite well in aggregate.”

In Asia

  • Modest losses in China and Japan with -0.08% and -0.46% respectively
  • A good report out from Oxford Economics on the reliance of different economies to the Chinese. Sure tells a tale.

Ahead in European Markets

ABN Amro Group NV raised 3.3 billion euros (US$3.6 billion) in an initial public offering, allowing the Dutch government to recoup some of the funds spent bailing out the lender during the financial crisis. The bank sold 188 million shares at 17.75 euros apiece, valuing ABN Amro at 16.7 billion euros,the stock begins trading in Amsterdam today.

  • FTSE -4.50 points.
  • DAX +125 points.
  • CAC +9 points.

Clarence

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NT Markets

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