ASX 200 slips 12 points to 5515 as results season continues to take the focus. Triumph (GWA) and disaster (APO) met, coupled with a thin start to the week. Asian markets mixed as usual. Japan up 0.32% and China down 0.30%. AUD 75.84c and Dow Futures down 38.
STOCKS AND SECTORS
- Banks and financials continued to wilt under further scrutiny. The big four basket down to $157 but has been eroded by the 222c CBA dividend recently. Steady and uninspiring. Clearview Wealth (CVW) +2.56% on thin volume ahead of its results later this week (August 24). Health insurers lost their mojo with NIB (NHF) -7.5% results, with Medibank Private (MPL) -4.23% following up Friday’s falls. Seems the cost cutting story isn’t enough with price rises not expected to last.
- Healthcare stocks slipped again with Regis Healthcare (REG) -6.94% and Japara Healthcare (JHC) -8.81% disappointing.
- Energy stocks fell with Santos (STO) -6.80% and Beach Energy (BPT) -6.61% following a conference call. Woodside (WPL) +1.45% bucking the trend and drawing fans following the results last week and generally upbeat analyst research.
- Materials were easier with BHP -1.60% and RIO -1.18% but Independence Group (IGO) -8.18%, Western Areas (WSA) -3.73% and Syrah (SYR) -4.50% all saw aggressive profit taking.
- Outdoor media a shocking sector to be in following the APN Outdoor (APO) -35.32% result. QMS Media (QMS) -13.14%, Ooh! Media (OML) -15.77%, Macquarie Media (MRN) -13.18% and APN News (APN) -2.46% also all feeling unloved. The excuse from the APO guys of election and Olympics seemed a little pathetic.
- The Chinese facing food stocks though had a good day with Treasury Wine Estates (TWE) +4.75% and Bellamy’s (BAL) +5.11% both continuing to bask in the results last week, along with A2Milk (A2M) +5.37% and DongFang Modern (DFM) +6.31%.
- Speculative stock of the day: Bass Metals (BSM) +60.00% after becoming the only ASX listed graphite producer following taking control of the Graphma graphite mine in Madagascar. The current rights issue at 1.2c and a free attaching option continues until 26 August.
- Loser of the day went to Migme Limited (MIG) -19.15% after a capital raising of $10m at 40c.
- APN Outdoor (APN) -35.32% reported a half-year profit of $19.5m, up 51.6% with the previous corresponding period. Revenue was up 10.4%to $150.6m. APN expects EBITDA between $79m and $84m. However, this compares to previous guidance of between $84m and $88m. Not a huge downgrade but a wishy-washy excuse of election and Olympics not helping either.
- Seek (SEK) -1.03% reported net profit of $357m, up 27% on pcp. However, this was affected by the sale of a 50% stake in education business IDP which gave SEEK a gain of $181.7m. Underlying profit was up 3% to $198.1m, compared with $193m in the pcp. SEEK will pay a final dividend of 19c.
- NIB Holdings (NHF) -7.50% reported a 47.9% rise in net profit to $120.8m boosted by customer growth and a slowdown in care costs. The gross margin improved to 14.3%, up from 13.3% last year. The board declared a fully franked dividend of 14.75c, up from 11.5c last year. Downgrades to come.
- Fortescue Metals (FMG) -2.43% has tripled its annual net profit, benefiting from lower production costs and stronger iron ore prices. The full-year dividend rose to 12 cents a share. Run hard and due for a pullback though it seems.
- BlueScope Steel (BSL) +5.70% underlying profit before interest and tax reached $570.5m which was well ahead of the forecast. The underlying net profit rose to $293.1m in the year, boosted by a strong second half contribution of $174.1m. A 3c a share final dividend has been declared.
- UGL +4.92%. Revenue flat at $2.3bn and has narrowed its full-year net loss to $106.3m from its $236.4m loss in the pcp. Net profit from its rail and defence, asset services, technology systems, engineers and construction and Asia divisions was up at $33.5m from $12.9m. No dividend again.
- Noni B (NBL) unchanged, said its net profit more than doubled to $21.1m. Revenue edged up 0.1% to $110.48m. No dividend.
- Japara Healthcare (JHC) -8.81% reported a 5.6% rise to $30.4m after it expanded its portfolio in the Queensland market. Japara expects its 2017 pre-tax earnings to “grow at a similar rate” to its fiscal 2016 earnings as the aged care sector absorbs reforms to the federal subsidy system. Full year dividend of 11.5c up from 11c.
- GWA +18.06% reported a profit of $53.68m up from a loss of $16.18m.
- Woolworths (WOW) +0.84% has confirmed it will revamp its loyalty program. Members earn one point for every dollar they spend in Woolworths supermarkets, BWS stores and Caltex Woolworths outlets.
- New Philippine President Duerte has threatened to pull out of the UN following his anti-drug campaign and the US police killings recently. More than 500 drug suspects have been killed in gun battles with police since Duterte was sworn in eight weeks ago. Duterte’s drug crackdown has left more than 4,400 arrested since he took office on June 30. Nearly 600,000 people have surrendered to authorities, hoping to avoid getting killed. The arrests have further overwhelmed the Philippines’ overcrowded jails.
- Pfizer Inc. is close to an agreement to buy Medivation Inc. for about $14bn.
- Urjit Patel has been named as the new governor of the Reserve Bank of India. Patel, currently deputy governor, is a one-time Yale University economist who worked at the IMF in the early 1990s.
EUROPE AND THE US
- Computer and software stocks have increased to almost 21% of the S&P 500 Index’s value, near a 15-year high. The Nasdaq Composite Index and S&P 500 Information Technology Index have both rallied 23% since markets bottomed in February. But unlike the boom in 2000 earnings are now around 20% of the recent earnings reports. In 2000 the group’s profits were 15% for 33% of the index. Looks like they are delivering and the financial influence is waning.
And finally….running out of quality material although my friend Hans is a gem in this regard.
Its long but worth it!!
On a chain of beautiful deserted islands in the middle of South Pacific, the following people are stranded:
* Two Italian men and one Italian woman.
* Two French men and one French woman.
* Two German men and one German woman.
* Two Greek men and one Greek woman.
* Two British men and one British woman.
* Two Bulgarian men and one Bulgarian woman.
* Two Japanese men and one Japanese woman.
* Two Chinese men and one Chinese woman.
* Two Irish men and one Irish woman.
* Two American men and one American woman.
One month later, on these absolutely stunning deserted islands in the middle of nowhere, the following things have occurred:
* One Italian man killed the other Italian man for the Italian woman.
* The two French men and the French woman are living happily together in a ménage e trois.
* The two German men have a strict weekly schedule of alternating visits with the German woman.
* The two Greek men are sleeping together and the Greek woman is cooking and cleaning for them.
* The two British men are waiting for someone to introduce them to the British woman.
* The two Bulgarian men took one look at the Bulgarian woman and started swimming to another island..
* The two Japanese have faxed Tokyo and are awaiting instructions.
* The two Chinese men have set up a pharmacy, liquor store, restaurant, and laundry, and have the woman pregnant in order to supply more employees for their stores.
* The two Irish men divided the island into north and south and set up a distillery. They do not remember if sex is in the picture because it gets somewhat foggy after a few pints of coconut whisky.. However, they are satisfied because the British are not having any fun..
* The two American men are contemplating suicide, because the American woman will not shut up and complains relentlessly about her body, the true nature of feminism, what the sun is doing to her skin, how she can do anything they can do, the necessity of fulfillment, the equal division of household chores, how sand and palm trees make her look fat, how her last boyfriend respected her opinion and treated her nicer than they do, and how her relationship with her mother is the root cause of all her problems, and why didn’t they bring a damn cell phone so they could call 911 and get them all rescued off this forsaken deserted island in the middle of freaking nowhere so she can get her nails done and go shopping.