ASX 200 finished stronger up 30 points to 5228 after two days of falls and S&P tried to spoil the party earlier. Materials and energy stocks the standouts. Bank and industrials mixed. Asian markets weaker with Japan down 0.67% and China down 0.23%. AUD took a hit on ratings news to 75.08. US futures down 9.

STOCKS AND SECTORS

  • Materials and Energy stocks firmer with BHP +1.98% a standout and divorcee South32 (S32) +3.13%.
  • Western Areas (WSA) +3.33% continues to be volatile as the most leveraged play on the improving nickel price.
  • Gold miners pushed higher again with Brazilian miner, Beadell Resources (BDR) +3.03% a big winner with Dacian Gold (DCN) +5.76%.
  • Financials powered out of the blocks this morning as the LNP crept closer to a government majority but reversed as the credit downgrade was announced. Finally, they recovered to close around 0.5% firmer although National Bank (NAB) -0.24%. Insurers were in demand led by IAG +2.00% and QBE +1.68%. Wealth Managers mixed with Perpetual (PPT) +0.65% and Henderson Group (HGG) -0.29%.
  • Big winner today was Audio Pixel (AKP) +9.22% on thin volume. Fleet Group (SGF) +5.56% also doing very well.
  • IPO watch: Two new ones today with Kogan (KGN) -16.67% and Michael Hill (MHJ) unchanged, a NZ dual listed jeweller.
  • Speculative stock of the day: MEO Australia (MEO) +180.00% after announcing a significant update to its Cuban oil acreage with assessments of up to 8.183bn barrels of oil-in-place, leading to recoverable resource estimate of 395m barrels. The Varadero oil project lies 140km east of Havana.

CORPORATE NEWS

  • Kogan (KGN) -16.67% following a disappointing debut today after raising $50m in an IPO at 180c. The company has a market cap of $150m with 30% of the company sold to investors with the issue four times oversubscribed.
  • Cimic Group (CIM) -16.53% after a broker downgrade from Morgan Stanley on thin volume. Analysts say the company faces slowing spending on engineering and construction projects in Australia and increased competition. Late company announcement after ASX query says they know of no reason for the fall apart from the broker report.
  • Tabcorp (TAH) -4.36% after the NSW government banned greyhound racing from July 2016. The company which derives 5% of its gambling revenue from the dogs expects a ‘significant level of substitution will occur to other racing products’.
  • AGL Energy (AGL) -2.07% has warned the market that it faces softer than expected earnings growth as it taps the spot market and other short term sources for a higher proportion of wholesale gas supplies. The company will provide official guidance for FY17 on September 28 at its AGM, while they reiterated that its yet to be announced FY2016 earnings would come in at the upper end of its $650m-$720m forecast range.
  • Regis Resources (RRL) +2.84% has increased their group ore reserves by 6% from 2.01m ounces to 2.13m ounces. The JORC resource estimate is now 261.7m tonnes at 0.95g/t for 8.01m ounces compared to 249.1m tonnes and 7.63m ounces.
  • Perseus Mining (PRU) unchanged, has released a quarterly update ahead of their full report due around 25th July. Improved operating performance at Edikan in Ghana with head grades increasing to 1.01g/t up by 19% during the quarter. Gold production totalled 40,058 ounces in the quarter up 8% on March and 24% on December quarter.
  • Fantastic Furniture (FAN) -10.85% after clarifying its SA announcement yesterday with FY16 EBIT being around 50% above FY15 EBIT.

ECONOMIC NEWS

  • Standard & Poor’s has cut the outlook on Australia’s coveted AAA credit rating from ‘stable’ to ‘neutral’ after the federal election result coupled with high levels of external and household debt. The ratings agency says there is a ‘one in three’ chance the rating will be downgraded within two years.

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  • UBS raises short-term gold target to $1,400oz from $1,250. Fund managers are the most bullish on gold futures since at least 2006, U.S. data shows. Gold assets in ETFs rose to 1,997.3 metric tons as of Tuesday.

IN ASIA

  • Bank of Japan Governor Kuroda said in a speech to his bank’s branch managers Thursday that the country’s CPI is likely to remain slightly negative for the time being. He also said he is monitoring risks and will add stimulus should it be required.
  • Japan’s two-year bond yield fell 1bps to an all-time low of minus 0.345%. The nation’s 10-year rate was minus 0.275%.
  • Samsung Electronics gained as much as 2% in Seoul after the world’s largest maker of phones and memory chips reported better-than-estimated earnings. It reported operating income of 8.1 trillion won (US$6.9 billion) in the latest quarter, exceeding the 7.38 trillion-won average of analysts’ estimates and 6.9 trillion won a year earlier.
  • The GBP is not the only currency that has been seriously devalued this year with the yuan down 6.7% YTD.

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EUROPE AND THE US

  • IEA warns of ever-growing reliance on Middle Eastern oil supplies. Agency says rise in demand amid price slump has given region biggest market share since 1970s. Mission accomplished Saudi Arabia.
  • Danone nears $10bn deal for health-focused WhiteWave Foods. The acquisition by world’s biggest yoghurt maker would be its biggest in a decade.
  • China is making noises about a possible trade deal with the UK following any Brexit. China has continually been frustrated by the EU on a potential free trade deal.
  • Trade deals with both China and the US have been bogged down with the EU for years.
  • Marks and Spencer (UK) results today.

And finally…..sorry not very PC so turn away if you are offended….

I was devastated to find out my wife was having an affair but, by turning to religion, I was soon able to come to terms with the whole thing. I converted to Islam, and we’re stoning her in the morning!

– The wife suggested I get myself one of those penis enlargers, so I did …. she’s 21 and her name’s Lucy.

My wife has been missing a week now. The police said to prepare for the worst. So, I had to go down to Vinnies to get all of her clothes back!

I said turn away ….didn’t I…too late!!

My thanks to Hans for the great jokes..keep ’em coming sportsfans.

 

Clarence

XXXX

mt_tryforfree

NT Markets

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