ASX 200 up 30 points in quiet trade to 5483 as the consumer and energy stocks perform. Telcos again in the downdraft. Banking inquiry continues. Trade data disappoints but AUD clings to 76c. Asian markets push higher with Japan up 0.59%, China closed. US futures down 11.
STOCKS AND SECTORS
- All eyes were once again on the riveting banking inquiry. Sky business devoted the whole day to it. The sector ground higher with the big four up around 0.3% to 0.75%. Bank of Queensland (BOQ) -2.71% though in the dog house on their results. Elsewhere in financials, Insurance giant QBE +2.77% put in a good show following the appointment of Margaret Murphy as CHRO and other insurers and fund managers also did well. Blue Sky (BLA) +5.43% reacted favourably to an update from their new MD.
- REITs were mixed with Westfield (WFD) +0.63% recovering somewhat after the recent falls. Scentre Group (SCG) +% and Goodman Group (GMG) +1.13% also in the same vein.
- Telcos have been a crowded trade for some time based on defensive and growing earnings but all that has collapsed following the TPG (TPM) results recently. Telstra (TLS) -1.75% as Vocus (VOC) –1.19% continued their 30% tumble since August as another broker downgraded the company to a sell. Issues with integration and the headwinds from the NBN are the main concerns. Another crowded trade much like TPG (TPM) +1.36% pre the figures.
- Energy stocks continued to perform with Woodside (WPL) +1.87% leading the charge higher. Whitehaven Coal (WHC) +0.39% once again in demand as were Santos (STO) +3.63%.
- Miners were a mixed bag with BHP +1.18% an oil stock for the day but base metals stronger led by South32 (S32) +2.42% though gold miners were once again unloved on thoughts of higher US rates. Evolution Mining (EVN) -4.29% and St Barbara (SBM) -4.48% some of the walking wounded.
- In the industrials, Healthcare was the sector to be in with a positive sentiment emanating from Australian Pharma (API) +4.75% spreading out to Ansell (ANN) +4.57%, Sigma (SIP) +2.12% and even Japara Healthcare (JHC) +2.43%. Consumer staples were also better with Wesfarmers (WES) +1.28% and Woolworths (WOW) +2.62% doing well.
- Speculative stock of the day: Quantum Resources (QUR) +50.00% following the acquisition of an advanced lithium project in Manitoba Canada. The company has the rights to a 95% interest in the project and is now set to ramp up drilling and exploration activity.
- Bank of Queensland (BOQ) -2.71% announced full year profits of $360m in line with consensus but the market worried about the net interest margin (NIUM) falling by 3bps to 1.94% plus the outlook statement which focussed on lower growth and declining ROE for the entire banking sector.
- Estia (EHE) -3.03% after lowering its guidance yet again. The company announced underlying EBITDA would be between $86m to $90m down from the $105m forecast 37 days ago. The problems appear to stem from lower than projected occupancy rates and a rethink on non-labour operating expenses.
- Australian Pharmaceutical (API) +4.75% upgraded its full-year profit guidance and picked a successor to long-standing chief executive Stephen Roche. The company now expects underlying net profit for the 12 months to August 31 of $51m up 17% on 2014/2015 numbers.
- Mesoblast (MSB) +12.11% after a results from a phase two diabetic kidney disease trial were published showing some promising results on renal function and the treatment was ‘well tolerated’.
- Australia’s trade gap has defied predictions of a rise falling deeper into the red. The August trade balance came in at $2.01bn, following $2.10bn in July. Economists had tipped a widening in the trade gap to $2.30bn.
- Exports were flat in the month at $26.856bn, and there was also no growth in imports which came in at $28.866bn.
- Walt Disney said that visitors to the company’s new Shanghai park have “exceeded our expectations,” playing down a recent media report that park attendance was below estimates.
- The Trump equivalent in the Philippines, new President Duterte has have an eventful 100 days in office with his hard line war on drugs and now the Philippine government has set out a timetable for the final stages of its review of metallic miners in the world’s largest nickel producer, and aims to decide which suppliers will be suspended for failing an environmental audit before the end of this month.
- Feeling well below par were golden golf club maker Honma Golf which listed today, sliced into the rough and had to take a drop. Of around 8.5% on its first day. Bogeys all round. They hold the record for making the most expensive clubs in the world at around $100,000.
EUROPE AND THE US
- Hurricane Matthew is heading for Florida with losses estimated at around $US$15bn as it hits the coast. Twelve U.S. power generators, including two nuclear plants, are in the storm’s path. Oranges will be spared as they are grown inland. If it does hit land, it will be the first major strike since 2005.
- The war between ETF providers in the US continues with BlackRock cutting its fees to attract more interest from US pension advisers. They cut expense ratios on 15 US-listed iShares ETFs by up to 5bps, reducing annual fees to between 4 and 14bp from a previous range of 7 to 16bp. The gloves are off between ETF providers BlackRock, Vanguard, Charles Schwab and State Street Global Advisors.
- In shock news the blood testing startup Theranos will close its laboratories and sack 40% of its staff after a year of damaging revelations about its revolutionary cheap, quick and accessible blood testing. Seems it was all too good to be true.
And finally…Beeks has been travelling in Europe and when he gets over his jet lag he may even give some insights on the state of things in the UK following the Brexit vote…
An older couple, who were both widowed, had been going out with each other for a long time. Urged on by their friends, they decided it was finally time to get married. Before the wedding, they went out to dinner and had a long conversation regarding how their marriage might work. They discussed finances, living arrangements, and so on. Finally, the old gentleman decided it was time to broach the subject of their physical relationship. “How do you feel about s*x?” he asked, rather tentatively. “I would like it infrequently “, she replied. The old gentleman sat quietly for a moment, adjusted his glasses, then leaned over towards her and whispered, “Is that one word or two?”