ASX 200 closed up 34 points to 5442 as some good AGM commentary pushed the bears to cover shorts. Resources doing well as iron ore up 6% in China. Banks in demand. Asian markets mixed as Japan rises 0.70% whilst China slips 0.17%. AUD slightly higher at 76.26c and US futures up 20.
STOCKS AND SECTORS
- Resources better in the big miners Fortescue Metals (FMG) +6.46% after an investor day, BHP +0.43% and RIO +2.44% on higher Asian ore prices, though gold miners saw more selling Evolution Mining (EVN) -2.69% and Perseus Mining (PRU) -3.36%
- Banks stronger today by around 0.5% to 1.0% as we count down the days until the results starting Thursday. Financials got a lift from news that Sony is buying into Clearview Wealth (CVW) +10.42% with Challenger (CGF) +1.35%, Platinum (PTM) +3.03% and Magellan Financial (MFG) +1.62%. Bank of Queensland (BOQ) +1.88% had a decent rise today as it starts to play a little catch up with its older siblings. REITs also had a positive day following comments from Mirvac (MGR) +0.97%.
- Industrials mixed although IPH Limited (IPH) +6.67% and Brambles (BXB) +1.35% and Cleanaway Waste (CWY) +2.94%. Good gains too for some of the other recently unloved like Domino’s Pizza (DMP) +1.88%, Ardent Leisure (AAD) -7.84% as a massive sell off at the open whacked the stock 20 cents on media reports that 4 people have been critically hurt at Dreamworld. Seems the shock from the better than expected commentary from Aconex gave the shorters a reason to cover the recent shooting stars fall from grace. Skycity Entertainment (SKC) +3.69%, The Star Group (SGR) +2.01% and even Crown Resorts (CWN) +0.94%
- Healthcare finally saw some bottom picking after the fall out from Healthscope (HSO) +1.79%. Ramsay Health Care (RHC) +1.47% also found some new friends together with Resmed (RMD) +0.48% and Ansell (ANN) +1.61%. We also saw some buying creeping back in for infrastructure stocks led by Macquarie Atlas Roads (MQA) +2.96% and Transurban (TCL) +1.98%.
- Speculative stock of the day: Deep Yellow (DYL) +80.00% after the company returned to trading yesterday having appointed John Borshoff as MD and formed a key partnership with Sprott Gp and raised $1.42m
- Aconex (ACX) +13.10% updated the market with a bullish outlook forecast and recent negativity evaporated as shorts ran for cover. The construction software company says revenue will grow at 39.4 % to 45.9 % in the 2017 financial year, well ahead of its medium-term forecast of 20% to 25% each year. Revenue will fall in a range of $172m to $180m this financial year.
- Clearview Wealth (CVW) +10.42% has been a great success story this year and now Sony Life Insurances has bought the 14.9% stake from Crescent Capital at a very bullish 148c. Seems the Japanese have an appetite for Australian Insurance assets as Dai-chi Mutual paid $375m for a key stake in Tower Australia in 2008, while NAB last year sold 80% of its life insurance business to Nippon Life for $2.4bn.
- WorleyParsons (WOR) -3.38% AGM commentary from the company as it is yet to see a recovery in trading conditions. Underlying earnings will be more biased to the second half than in previous years the company said.
- Tabcorp (TAH) -0.61% came close to a strike against the remuneration policy after CEO David Attenborough saw an increase in his pay from $2.73m to $3.19m despite a falling share price and reduced profits.
- Bega Cheese (BGA) -16.80% on the nose today as the company revealed it is battling a ‘super down cycle’ with the global glut and a push into China with infant baby powder, regulation changes and discounting.
- Sirtex (SRX) +1.85% on AGM news that global dose sales rose 16.4% to 11,931 units with a mere 2% market penetration so far giving the company significant upside. Three clinical studies are due to report next year.
- APN News and Media (APN) in a trading halt as it seeks to raise $271m to fund the purchase of the remaining 50% in Adshel and Conversant Media. Adshel has 22,000 outdoor panels across Australia and New Zealand and represents a 12.7% multiple on historic EBITDA.
- Mirvac (MGR) +0.97% has seen higher default settlement rates over the 1% average but has sold the units subsequently. 667 residential lots settled in the first quarter and on track for 3300 in 2017.
- Greencross (GXL) +4.55% confident of delivering another year of double-digit profit growth after a tick-up in trading over the last two months. Sales strengthened in September and October lifting same-store sales across the group in the year to date by 3.9%
- Consumer confidence fell 3.6% in the week ending 23 October. The fall was largely driven by deterioration in consumers’ views toward future financial and economic conditions.
- Consumers’ views towards their current finances were relatively stable, edging down just 0.2%while views towards finances over the next 12 months dropped 7.1%, bringing the index down to its lowest level since September last year.
- China’s overnight money rate climbed to the highest level in 18 months at 2.39% as the USD continues to appreciate against the yuan.
- Southeast Asia is now biggest buyer of steel exports by China
- Global shipments more than quadrupled since the 2008 financial crisis, reaching a record last year, and prices dropped as much as 64%.
- Iron ore futures in China have soared 6% to the highest level in two years playing catch up to the coking coal price.
- The most-traded January ironore on the Dalian Commodity Exchange climbed 6% to hit the exchange-set ceiling of 471.50 yuan ($US70) a tonne. The most-active January coking coal rose 4% to a contract high of 1288 yuan a tonne.
EUROPE AND THE US
- CETA is dead thanks to the Wallonia region of Belgium. This shows how hard it is going to be for the UK and others to conclude a trade deal with the EU. It took 7 years to get to this point for Canada before the 3.2m good people said nee. UK negotiators take note. It is going to be impossible to get agreement from all 27 members. Might as well forget it.
- Canada is often compared to Australia in terms of the economy at least. Here are some scary numbers. Nation of 36 million owes US$4.4 trillion, triple the economy’s size. Canada boasts the lowest government debt load among Group-of-Seven countries, household debt is the highest of its peers.
- Chicago Fed President Charles Evans told reporters after a speech in the US “My growth forecast is such that I can imagine that appropriate policy would have three rate increases” by the end of 2017. Median forecast by the Fed’s 17 policymakers at their most recent meeting, suggested short-term rates will be between 1% to 1.25% by the end of next year, up from a range of 0.25% to 0.5% currently.
- In the UK, the government is expected to green light an expansion to Heathrow.
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