ASX 200 up 2 to 5563 as bank rally peters out. Energy and miners the superstars but well off the highs on profit taking. Industrials falter again. Asian markets mixed, Japan up 0.36% though China gets hit hard down 2.37%. AUD steady at 74.47c with US Futures up 12.
Tell me why……I don’t like Mondays
Since July 2012, the All Ords has traded -579 on Mondays out of a total increase of +1480. Tuesday +634, Wednesday -24, Thursday +993, Friday +456.
STOCKS AND SECTORS
- Resources as usual the place to be. BHP +1.31% (is it an oil stocks or iron ore?) RIO +0.22%. Fortescue Metals (FMG) +2.40%, Independence Group (IGO) +0.93% and Iluka Resources (ILU) +5.04%
- Energy stocks understandably firm today on the non-OPEC supply cuts. Woodside Petroleum (WPL) +2.91%, Oil Search (OSH) +3.47%. Some stand outs in Liquefied Natural Gas (LNG) +11.72% and Karoon Gas (KAR) +3.22%.
- Gold miners not a happening thing again. Newcrest (NCM) -2.64%, Resolute Mining (RSG) -5.22%, Dacian Gold (DCN) -7.85% and Westgold Resources (WGX) -4.41%.
- Banks started out so well today but could not hang on to gains as Bendigo and Adelaide (BEN) -2.73% slid as profit takers moved in. The big four banks were also out of fashion after some very strong gains although closed slightly positive with Commonwealth Bank (CBA) +0.31%. The Big Bank Basket (BBB) to $172.74. Wealth managers did ok with Macquarie Group (MQG) +1.24% the best of the big ones.
- Great day for insurance stocks with a takeover bid for Cover–More (CVO)+42.21% and superstar Clearview Wealth (CVW) +6.30% also sprinting head on takeover hopes.
- Industrials sick again as A2Milk (A2M) -6.49% took their cue from Bellamy’s Australia (BAL). BWX -% joined in as did Bega Cheese (BGA) -3.61% and Freedom Foods (FNP) -3.15% with Chinese facing dairy souring. Domino’s Pizza (DMP) +1.95% made a beeline for the pepperoni this morning but gave up early gains to finish modestly higher. Casualties though in the tourism sector with Webjet (WEB) -2.58%, Ardent Leisure (AAD) unchanged after selling its D’Albora Marinas to a consortium including Goldman Sachs. Baby Bunting (BBN) -4.35% continues to experience tantrums and controlled crying.
- Air stocks slid back to earth on higher fuel prices with Qantas (QAN) -3.21% despite announcing direct flights from Perth to London. Not sure anyone in Perth can afford then now though.
- IT again sold off with Wisetech Global (WTC) -3.11%, Link Administration (LNK) -0.98% and Altium (ALU) -1.50%. Telcos weaker yet again Telstra (TLS) -0.80%, TPG (TPM) -1.48% and Spark New Zealand (SPK) -2.70%
- Healthcare in the dog house today with CSL -3.05% one of the biggest casualties together with Ramsay Healthcare (RHC) -3.15%, Impedimed (IPD) -3.33% and Lifeheathcare (LHC) -4.72%.
- Speculative stock of the day: Kneomedia (KNM) +40.91% after a shareholder update on the roll out of its educational software and app. The company has over 2000 licences ordered over seven schools with New York schools.
- Bellamy’s Australia (BAL) is set to issue another trading update just two weeks after the last one. Seems unlikely to be good news so soon after the downgrade.
- Estia Health (EHE) in a trading halt after launching a $137 million capital raising and dropping its interim dividend in a bid to bolster its beleaguered finances. The $136.8m raising is being offered at 210c, a 21.6% discount to its closing price last week. The operator’s leverage is currently running at 2.41 times. After the raising that will be cut to a more modest 1.62 times, well within a new target gearing of 1.5 to 1.8 times.
- APA Group (APA) +1.87% has taken its first firm step into solar power, signing a 12-year electricity sales contract that will underpin a $50 million project in Western Australia.
- Cover-More (CVO) +40.91% has agreed to a $741m takeover offer from Switzerland’s Zurich Insurance Group. Under the deal, Zurich will acquire Cover-More for 195c a share, a 48% premium to the target’s last closing price of 132c on Friday. The deal will be executed via a scheme of arrangement requiring the approval of 75 per cent of Cover-More shareholders at a meeting the insurer said was expected to be held in late March or early April 2017.
- Dow EDI (DOW) +1.81% another contract win for the company in Newcastle closing at a six-year high. The deal is worth $450m over ten years to operate an integrated public transport system for Newcastle.
- Bill English has replaced John Key as the PM of New Zealand bro.
- 5-Year bonds up 10 bps to yield 2.32%
- 10-Year bonds up 12 bps to yield 2.85%
- Chinese iron ore futures are flying, up over 5%.
- Shopping has overtaken gambling as the biggest earner in Singapore’s tourism industry for the first time since 2012, surging 44% in the six months through June from a year ago, official data show.
EUROPE AND THE US
- London home prices are having their worst December in six years, led by weakness in prime areas in the capital that is likely persist into 2017. Rightmove said on Monday that asking prices fell 4.3% from November to 616,160 pounds (US$775,500), with inner London dropping 6%.
- Boeing has agreed to sell a fleet of jets to Iran in a US$16.6bn deal. The US plane-maker will sell 50 of its workhorse 737 single-aisle airliners, along with 30 of its “mini-jumbo” 777 aircraft to carrier Iran Air. Sanctions have been lifted since the nuclear agreement last year.