ASX 200 staged a good rally to close down only 30.5 points at 5197.5 after falling heavily at the open to test the 5150 level. Safe haven bargain hunting emerged as banks and resources suffered. Gold the standout again. AUD falls to 74.38 with Asian markets sliding with Japan down 2.47% and China virtually unchanged on the day. US futures down 66.
The speech by BOE chief Mark Carney did not help an already nervous and thinly traded local market as he stated the risks were starting to ‘crystalise’. Property funds being frozen in the UK on redemptions plus the Italian banking crisis were enough to unsettle us. Add in a glacial election count as the LNP limps towards government and it was enough to take us down to a test of the 5150 level before safe haven buying came back on stream. The usual suspects were in the shopping baskets, Telstra (TLS)+0.73%, Coca Cola Amatil (CCL) +4.55%, AGL Energy (AGL) +2.06%
STOCKS AND SECTORS
- Gold was the sector in the spotlight as AUD bullion hit $1841 a near new high with Newcrest Mining (NCM)+3.18%, Evolution Mining (EVN)+6.5% and Ramelius Resources (RMS)+9.78%.
- Defensive stocks helped the rally as cash upped bargain hunters bought up Telcos Utilities and some gaming stocks. Telstra (TLS) +0.73% led the charge back followed by Spark NZ (SPK)+2.06%. Cimic Group (CIM) +2.00% were a standout in the mining services and contractor sector.
- Financials were once again the biggest drag as the big four banks weighed with the big four basket trading near its recent lows of $147.60. Royal Commission and APRA capital requirement owes continue. Wealth management also on the nose led by Magellan Financial (MFG)-4.5%.
- Recent IPO Chimpchange (CCA)+21.05% to 57.5c bounced hard following a disappointing start to life after an issue price of 80c.
- Speculative stock of the day: Avalon Minerals (AVI) +100.00% following the successful completion of a capital raising of $1.9m to advance their Scandinavian lithium and copper projects.
- Virgin Australia (VAH) +2.5% are set to announce a big annual loss after the company said its restructure would cost as much as $450m. The company reaffirmed guidance of between $30m-$60m for pre=tax profits.
- Godfreys Group (GFY) -0.95% new CEO Kathy Cocovski, has departed from the ailing vacuum cleaner group after just five months in the job.
- St Barbara (SBM) +4.49% on a positive production update at Gwalia and Simberi. Key results for the Q4 2106 with Gwalia production at 65,098 ounces and Simberi at 26,935 ounces.
- Some rare good news for Lynas today (LYC) +17.24% after exceeding production targets with 3,911 tonnes of NdPr. The company also annou8nced they had reduced the interest rate on their JARE facility from 6.5% to 5.75% due to the production increase.
- Beadell Resources (BDR) +19.28% released some high grade drilling results from the Tucano mine in Brazil with grades confirming up dip potential and growing resource.
- Urbanise (UBN) +6.25% have signed a deal with Prudential Investment that will deliver a revenue number of $16m over the next decade. Urbanise has the country’s leading strata management company and Prudential will use its platform across 50,000 lots by early 2017.
- Cover-More group (CVO) +11.29% finalised an underwriting agreement with Great Lakes Australia based on generalised linear modelling.
- Downer EDI (DOW) +1.81% announced they had signed a two year contract a to provide mining services at the Stanwell Corp’s Meandu Mine in SE Queensland.
- Onthehouse (OTH) +15.49% after the Macquarie Group (MQG) -% led consortium announced they would pay a cash consideration of 85c for the remaining shares they do not own.
- Despite fears that the funding mechanisms for local banks is drying up, National Bank (NAB) -0.57% raised $US4 billion in the US bond market with demand around US$10bn at around 120 bps, over five-year debt.
- Kogan (KGN) lists tomorrow.
Nothing major today.
- 10-year Australian Commonwealth Government Bond yields have hit a record low 1.841 % less than 24 hours after 10-year United States Treasuries hit a record low 1.38 %.
- The MNI China Car Purchase Indicator, a measure of conditions in the China auto market, rose 0.5 % to 92.0 points in June from 91.5 in May.
- Car ownership levels were stable in June at 38.1 % while a slightly reduced portion, at 17.6 %, said they were planning on buying a car in the next 12 months.
- Japanese 20-year bond yields fell below zero today.
- Gold has jumped to a 2 year high and silver a level not seen since 20113 as volume soared on the Shanghai futures exchange. It seems that silver is the new speculators plaything. Volume at mid-morning was 1.6m contracts nearly eclipsing the volume of 1.9m contracts for the whole of Tuesday’s session.
- Open interest, a tally of outstanding contracts in gold futures on the Comex in New York, climbed to the highest on Friday since November 2010.
EUROPE AND THE US
- FBI has referred no charges against Hillary Clinton.
The five biggest risks to the UK economy according to the BOE Financial Policy Committee:
- Household indebtedness
- Current account deficit
The UK Pound has fallen to fresh lows in Asian trading at 1.2798 against the US dollar.
Men Are Just Happier People
If Laura, Kate and Sarah go out for lunch, they will call each other Laura, Kate and Sarah. If Mike, Dave and John go out, they will affectionately refer to each other as Fat Boy, Bubba and Wildman.
When the bill arrives, Mike, Dave and John will each throw in $20, even though it’s only for $32.50. None of them will have anything smaller and none will actually admit they want change back.
When the girls get their bill, out come the pocket calculators…YEP!!!
A man will pay $2 for a $1 item he needs.
A woman will pay $1 for a $2 item that she doesn’t need but it’s on sale.