monday

ASX 200 up 9 to 5540 as early selling to 5510 shrugged off. Results the focus with NAB and Ansell (ANN) doing well. Asian markets mixed as Japanese GDP weighs with Tokyo down 0.3% whilst China is rampant, up 3.2%. AUD 76.62c and US futures up 32.

STOCKS AND SECTOR

  • Miners out of favour as BHP -2.51% hit the headlines on the upcoming historic loss after huge write offs. RIO -3.42% slid as did Fortescue Metals (FMG) -3.27%. In base metals Orocobre (ORE) -5.41% crumbled as lithium fever starts to wane, Magnis Resource (MNS) -10.53%, and Galaxy Resources (GXY) -4.88% also in the dog house. Sandfire Resources (SFR) 60%, Independence Group (IGO) -3.40% and Golds also well down, Evolution Mining (EVN) -4.48%.
  • Banks were in demand as National Australia (NAB) +0.93% soothed some nerves and completes the results and updates. Big bank basket now up to $159.87
  • Insurers modestly better as were REIT AMP Limited (AMP) +1.04%, QBE Insurance (QBE) +0.45% and Goodman Group (GMG) +2.68%.
  • Industrials firmed after results from Ansell (ANN) +17.74% and JB Hi FI (JBH) +9.90%. Amcor (AMC) +1.50% firmed as did Orora Limited (ORA) +9.78%.
  • Consumer stocks continued their ascent led by Nick Scali (NCK) +2.29% following results and upgrades. Adairs (ADH) +4.31% also doing very well. Together with Automotive Holdings (AHG) +3.00%.
  • Telecom stocks back in demand led by Telstra (TLS) +0.73% with Vocus Comms (VOC) +0.59%. Media stocks were also higher as Seven West (SWM) +1.92% bounced back as the Olympic effect continues. Fairfax (FXJ) +2.59% also firmer on auction results and the property market. REA Group (REA) +0.38%.
  • In Healthcare Mesoblast (MSB) +11.15% another meteoric rise on the promising test results from its RA P2 trials.
  • Speculative stock of the day: Dark Horse Resources (DRX) +25.00% after announcing a historic spodumeme mine in Argentina. Las Tapias has been a significant producer of beryl from 1938- 1965.

CORPORATE NEWS

  • National Australia Bank (NAB) +0.93% 3rd quarter profit fell 3% to $1.6bn. Charges for bad and doubtful debts jumped 21% to $228 million after an extraordinary low in the last quarter.
  • JB Hi Fi (JBH) +9.90% net profit rose a better than expected 11.5% to $152.2 million in 2016. Sales rose 8.3% to $3.95 billion, exceeding guidance of $3.9 billion, as new stores augmented like for like sales growth of 5.4%. Final dividend boosted by 6¢ to 37¢ a share.
  • Santos (STO) +1.06% has taken a $US1.5bn hit on the value of its new GLNG gas export project in Queensland, making a plunge into the red for the first half inevitable. This impairment, follows total write-downs of $2.8bn taken at the full-year results in February.
  • Ansell (ANN) +17.74% Full-year net profit fell 15.1% to $US159.1m, which was at the low end of its guidance range but above market expectations of $US153m.
  • Aurizon Holdings (AZJ) -6.00% Reported an 88% drop in full year net profit to $72m due to $528m of previously-announced asset impairments. Underlying EBIT fell 10% to $871 million, as flagged last month. AZJ has forecast flat rail haulage volumes and pledged deeper cost cutting, including reviewing its intermodal and bulk freight business.
  • Newcrest Mining (NCM) -4.00% with a dividend for the first time in 3½ years. underlying profits of $US323 million was in line with analyst consensus, Newcrest produced 2.43 million ounces of gold in the year to June 30, which was slightly higher than the previous year. Copper production was lower than the previous year at 83,070 tonnes. AISC was US$762 giving an average margin of $404.oHoldings (AZJ) -%

ECONOMIC NEWS

No local news

ASIAN NEWS

In Japan

  • GDP expanded by an annualised 0.2% in the second quarter, less than the median estimate of economists for a 0.7% increase. Pretty underwhelming again.
  • Business spending declined 0.4% from the previous three months (estimate +0.2%).
  • Private consumption increased 0.2% over the same period (estimate +0.2%).
  • Net exports subtracted 0.3 % from GDP.

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In China

  • IPO fever is gripping China with the 62 new stocks that have completed their first month of trading this year have soared 420% on average in that time, the steepest such rally on record.
  • The link between Hong Kong and Shenzhen, which expands on an existing connect program with Shanghai, will start in December. Shanghai markets have jumped to a seven month high as trading volumes surged 61% above the 30-day average for the time of day.

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EUROPE AND THE US

Big week for the UK.

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  • In Germany the first signs of what negative interest rates mean. Gmund am Tegernsee’s co-operative savings bank has decided to pass on the European Central Bank’s negative deposit rate to retail customers. Clients with more than €100,000 of savings will face the 0.4% annual charge.

And finally……………….

A husband and wife were golfing when suddenly the wife asked, “Honey, if I died would you get married again?” The husband said, “No sweetie.” The woman said, “I’m sure you would.” So the man said, “Okay, I would” Then the woman asked, “Would you let her sleep in our bed?” And the man replied, “Ya, I guess so.” Then the wife asked, “Would you let her use my golf clubs?” And the husband replied, “No, she’s left handed.”

A divorce court judge said to the husband,”Mr Geraghty,I have reviewed this case very carefully and I’ve decided to give your wife $800 a week.” “That’s very fair,your honour,” he replied. “And every now and then I’ll try to send her a few bucks myself.”

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