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ASX 200 rises 9 points to 5478 as rally fades into the close. Muted gains across the board with banks, healthcare and materials back in favour. Asian markets mixed as Japan slips 0.05% and China rises 0.23%. AUD 75.60c and US Futures up 3.

STOCKS AND SECTORS

  • Solid bounces today in resource stocks despite the UK commodity markets closes last night. Fortescue Metals (FMG) +3.89%, Evolution Mining (EVN) +5.99% and Magnis Resources (MNS) +20.31%. Seems lithium was back in fashion with Orocobre (ORE) +2.93% and Galaxy (GXY) +5.41% all doing well.
  • Energy stocks all on the podium today with quasi energy stocks WorleyParson (WOR) +4.08%, Oil Search (OSH) +1.62% and Whitehaven Coal (WHC) +5.42%
  • Banks modestly higher with the big four basket back to $157. REITS felt the love today with Dexus (DXS) +1.56% and Scentre Group (SCG) +1.21%. Gateway Lifestyle (GTY) -13.03% was the exception on very disappointing results.
  • Telco stocks were ignored led by falls in Telstra (TLS) -0.75%, TPG (TPM) -1.64% and Vocus Comms (VOC) -1.93% with Chorus Limited (CNU) -3.69% the worst hit.
  • Consumer stocks mixed as Woolworths (WOW) -2.35% slipped on moves from Lowe’s to sabotage the Masters Coca Cola Amatil (CCL) +2.06% continued higher after upgrades. Select Harvest (SHV) +6.47% had a very strong day as did US Navy ship builder Austal (ASB) +14.02% as the brokers warmed to the story following the results. Discretionary stocks slipped away with Flight Centre (FLT) -1.64%, Mantra Group (MTR) -3.59% and Billabong Group (BBG) -4.85% in sympathy with Surfstitch (SRF) -54.35%
  • IT Stocks also back in demand with Aconex (ACX) +4.64%, Nearmap (NEA) +8.41% and Hansen Technologies (HSN) +4.08%.
  • Speculative stock of the day: Stanmore Coal (SMR) +30.00% on a solid breakout on very good volume. No specific announcements but probably to come.

CORPORATE NEWS

  • Ramsay Health Care (RHC) +7.76% reported its full-year net profit rose 16.8% to $450.3m, on the back of strong growth in patient visits, acquisitions and cost control. Revenue rose 18.1% to $8.7bn, which missed the consensus estimate of $9.0bn. The board declared a dividend of 72c, up 19% on the prior period.
  • Flexigroup (FXL) -7.49% after announcing NPAT of $97.0m up 8% and a fully franked dividend of 7.25c. Seems it was enough to satisfy the market with FY17 forecasts for between $90m-$97m.
  • Sandfire Resources (SFR) – 1.49% after announcing full-year net profit down 30% to $48m. A final, fully franked dividend of 9c a share. The company gave full-year 2017 production guidance of 65-68,000 tonnes of copper and 35-40,000 ounces of gold at a C1 cash cost of US$0.95-1.05/lb.
  • Slater and Gordon (SGH) -15.18% after announcing a $1.02bn loss. The loss was a result of a $876.5. impairment on the goodwill of United Kingdom assets.
  • The report is in for the Samarco mine disaster and was caused by drainage and design issues. The report released by BHP +0.86% did not assign blame or highlight specific errors in corporate or regulatory practice.
  • Wipe out for Surfstitch (SRF) -54.35% after announcing a $154m loss following a $99m hit to the value of its goodwill and other assets. The company lost $18.8 million before interest, tax, depreciation, amortisation, asset write downs and restructuring costs, in line with its revised June guidance.
  • iSelect (ISU) +10.57% reported a net profit jump of 34% to $12.9m. The company also posted revenue jump of 9% to $171.9m. iSelect currently has $87.6m of cash and no debt. Fully-franked final dividend of 1.5c.
  • Fortescue Metals (FMG) +3.89% Fitch Ratings has affirmed FMG’s long term issuer default rating at ‘BB+’ and revised the Outlook to Stable from Negative.
  • The ‘Trying to catch a falling knife’ award goes to Estia Health (EHE) -15.12% after it continued the sell-off following the recent results as brokers wade in with downgrades. The new focus on the company from acquisition to organic growth is worrying analysts who are not sure it will keep the company on a growth trajectory and the 10,000 bed by 2020 target looks a stretch to say the least.
  • Resolute Mining (RSG) +6.8% has broken the mould literally as the first gold company to offer shareholders dividends paid in gold bullion. If you own more than 5000 shares, the company will deposit gold into your Perth Mint account.

ECONOMIC NEWS

  • ANZ-Roy Morgan consumer confidence fell 2.8% in the week ending 28 August. Looking through the weekly volatility, confidence remains on a clear upward trend, with the headline index up 1.9% m/m in August.

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Building approvals- Apartments lead the way

  • A surge in new apartment plans has offset a decline in house approvals and driven the number of new building permits up by 11.3% in July.
  • It was the biggest jump in monthly approvals in two-and-half-years and 21,000 approvals was the second-highest recorded since the Australian Bureau of Statistics started reporting the data in 2001.
  • Year-on-year, approvals rose 3.1%, in contrast to the consensus estimate of an 8.3% fall. They slipped 5.7% over the year to June.

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ASIAN NEWS

  • Shares in Hanjin Shipping, South Korea’s largest, have fallen by 29% amid reports the creditors of South Korea’s largest shipping group will stop supporting the company, raising the prospect of it entering receivership.
  • Typhoon Lionrock is projected to make landfall in the northern region on Tuesday afternoon
  • Tough school: In North Korea, two senior officials have been executed with anti-aircraft guns. One official was executed for dozing off in a meeting with Kim Jong Un. This is the second exe3cution for dozing off after his defence minister nodded off during a rally and lived just long enough to regret it.

EUROPE AND THE US

  • Oreo maker Mondelez has dropped its bid for Hershey after the improved offer fails to tempt the Hershey Trust. The Trust, which controls about 81% of Hershey’s shareholder votes, is in the midst of overhauling its own board of directors after investigations by regulators.
  • On the eve of the iPhone 7 Apple faces a multibillion dollar tax bill from Brussels. The final result is due to be handed down today after a three-year probe.
  • In a sign that the oil market may be set for a renaissance, oil explorers in 2015 discovered only about a tenth as much oil as they have annually on average since 1960. New finds at lowest since 1947.

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And finally………..

A guy is driving around the back woods of Montana and he sees a sign in front of a broken down shanty-style house: ‘Talking Dog For Sale ‘He rings the bell and the owner appears and tells him the dog is in the backyard.
The guy goes into the backyard and sees a nice looking Labrador retriever sitting there.

‘You talk?’ he asks.

‘Yep,’ the Lab replies.

After the guy recovers from the shock of hearing a dog talk, he says

‘So, what’s your story?’

The Lab looks up and says, ‘Well, I discovered that I could talk

when I was pretty young. I wanted to help the government, so I told the CIA.

In no time at all they had me jetting from country to country, sitting in rooms with spies and world leaders, because no one figured a dog would be eavesdropping.’

‘I was one of their most valuable spies for eight years running…

But the jetting around really tired me out, and I knew I wasn’t getting any younger so I decided to settle down. I signed up for a job at the airport to do some undercover security, wandering near suspicious characters and listening in.

I uncovered some incredible dealings and was awarded a batch of medals.’

‘I got married, had a mess of puppies, and now I’m just retired.’

The guy is amazed. He goes back in and asks the owner what he wants for the dog.

‘Ten dollars,’ the guy says.

‘Ten dollars? This dog is amazing! Why on earth are you selling him so cheap?’

‘Because he’s a Bullshitter.  He’s never been out of the yard’
Clarence

XXXX

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NT Markets

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