ASX 200 up 54 smashing through 5800 to close at 5809. Financials lead but materials add spice and results add interest. Fanfare for the Commonwealth Bank (CBA) +%. Asian markets positive with Japan up 1.10% and China +0.17%. AUD firm at 76.76c and US Futures up 3.

STOCKS AND SECTORS

  • Miners had a positive day with BHP +1.26%, RIO -0.16% and Fortescue Metals (FMG) +1.45%. Even Lynas Corp (LYC) +9.09% had a promising day as the rare-earth rally continues. Base metal stocks were mildly positive as residual buying helped hold them up. OZ Minerals (OZL) +0.61%, South32 (S32) +0.00% and Independence Group (IGO) +1.41%.
  • Energy mixed after write downs at Origin Energy (ORG) -0.68%, Santos (STO) -0.51% though WorleyParsons (WOR) +3.48%. Paladin Energy (PDN) -6.25% gave up some recent gains as did Senex Energy (SXY) -5.33%
  • Gold stocks mixed with Westgold Resources (WGX) +4.05% continuing to power ahead with Oceanagold Corp (OGC) -5.84% remaining very volatile as it battles with the Philippine authorities on the proposed mine closure. Newcrest (NCM) +0.94% and Saracen Minerals (SAR) +0.79%
  • Banks and Financials were the go today as Commonwealth Bank (CBA) +2.30% produced a record profit and an increased dividend. Ian Narev is a polished performer and his conference drew more buyers. The whole sector rallied on the US moves and the CBA sentiment. National Bank (NAB) +2.43% powering up with the Big Bank Basket back to its recent highs at $.179.40. Macquarie Group (MQG) +2.07% also doing very well. Insurers were firm Insurance Australia (IAG) +1.01%, Suncorp (SUN) +0.74%, QBE Insurance (QBE) +1.33%
  • Industrials were mixed and dominated by results. Good to see Treasury Wine (TWE) +3.62% popping corks, as were Metcash (MTS) +1.82% although slightly cheaper version perhaps.
  • IT and telcos mixed Aconex (ACX)-5.41% slumped after days of good gains., Freelancer (FLN) -2.86% continued to fall with other industrials playing second fiddle to results today. Monadelphous (MND) +3.65% one of eth winners with Downer EDI (DOW) -1.58%
  • Speculative stock of the day: Sundance Resources (SDL) +57.14% ASX price query. The company pointed out the proverbial obvious. The iron ore price has risen to its highest price since August 2014. Plenty of reasons to buy SDL it seems.

CORPORATE NEWS-Overload today

  • Commonwealth Bank (CBA) +2.30% another record profit of $4.9bn. Dividend was better than expected at 199c.
  • Boral (BLD) +6.12% first-half profit has risen 12.3% to $153.4m, helped by higher construction activity in Australia and improved earnings from its US operations. Boralmaintained its guidance for 2016-17 earnings to be higher than the previous year. Dividend of 12c.
  • CSL +2.90% net profit grew 12% to $US806 million as forecast by the company only a few weeks ago. Sales revenue grew 18% at constant currencies to $US3.68bn, and operating profits (before interest and tax) were up 38% to $US1,095m on the same basis.
  • Computershare (CPU) +4.86% said its first-half net profit jumped 78.2% to $150. Revenue climbed 7 per cent to $999.12m. Partly franked dividend of 17c.
  • Orora (ORA) -1.66% lifted interim net profit by 4.8% to $92.1m despite what it described as “flat” economic conditions and “escalating power prices in Australia”. Orora says it expects full-year earnings to surpass those of the last financial year. Revenue rose 4.1% to $1.98bn. The board declared a partially franked dividend of 4.5c. The company will also acquire The Garvey Group and Graphic Tech businesses, to add to its North American “point of purchase” packaging display business, for $US54m.
  • Domino’s Pizza (DMP) -14.36% expects full-year profit to grow by 32.5% from 30%. Seemed the market had ‘zero tolerance’ on the slightly disappointing result. Pizza sliced. With a PE in nose bleed territory still there could be more pain to come for shareholders. Looks like the Kosec men are bailing out. Everybody listens.
  • Wesfarmers (WES) +2.85% is looking at either a trade sale or a float of the very successful Officeworks business. Earnings in the business had doubled since 2009 and Officeworks was delivering a 13.9% return on capital. There are 163 Officeworks stores across Australia. Total revenue in the network jumped 6% in the six months to December 31 to $927m.
  • Origin Energy (ORG) -0.68% will cut $1.9bn off the value of its assets, primarily its gas export project in Queensland, ahead of the release Thursday of its earnings. It has sought to soften the blow by signalling an underlying profit, as measured by earnings before interest, tax, depreciation and amortisation of $2.4bn to $2.6bn for the year to June.
  • Primary Healthcare (PRY) -11.89% said underlying net profit after tax (NPAT) was $41.9m for the six months ended December 31. PRY expects underlying net profit for fiscal 2017 to be in the range of $92m to $102m, subject to trading conditions. Underlying profit for the half year period after tax from continuing operations fell 5.4% to $41.9m, on revenue that was down less than 1% to $808.7m. The company is still looking for a new CEO after the resignation of Peter Gregg to fight legal action.
  • Sonic Healthcare (SHL)+0.59%has reaffirmed its full-year guidance for 5% earnings growth after posting a strong first-half performance in its German and Swiss units which helped offset a struggling Australian business. The company reported statutory net profit for the half year ended 31 December of $197m, up 5%, on revenues which grew just 1% to $2.48bn.
  • Seven West Media (SWM) -5.77% first-half profits fell 91 per cent to $12.4m due to a write-down in the value of its Yahoo7 digital business, the sale of several youth magazines and the news channel on Sky News, and exiting the Presto on-demand movie channel. Seven television network profits fell 23%, despite a 5% increase in revenue, after increasing costs.
  • Mount Gibson (MGX) +4.30% has returned to the black in the December half, with a net profit of $22.9m from a $15.4m loss a year ago.
  • IOOF (IFL) -7.71% after its half-year profit fell  to $74m as the company struggles under a restructure. underlying net profit after tax was also down 17% to $79.4m for the 2017 half year financial result. Revenue fell 2% to $457.4 million.
  • A2 Milk (A2M) -2.48% Interim net profit rose 290% to $NZ39.4m. The company said it is anticipating lower infant formula sales in China in the second half of 2016-17 due to fewer “major selling events”, such as ‘Singles Day’.

ECONOMIC NEWS

  • The Westpac-Melbourne Institute Index of Consumer Sentiment jumped 2.3% to 99.6 points in February, from 97.4 points in January, remaining just below the 100-point level at which optimists outnumber pessimists.
  • NAB has revised its call for two rate cuts by the middle of this year, with the bank now predicting the RBA will remain on hold for large parts of 2017.Economic growth in the fourth quarter is likely to print at a strong 0.9%, NAB predicts, following the surprise 0.5% quarterly contraction in the preceding three months.

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  • Former RBA head Glenn ‘coolhand’ Stevens has taken a new job advising the NSW premiere on how to make housing affordable.

BOND CORNER

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ASIAN NEWS

  • Japanese Real GDP expanded for a fourth consecutive quarter at the end of 2016, the best run in more than three years at 1%. Exports rose in December for the first time in more than a year, and in the fourth quarter industrial production gained the most in nearly three years.
  • For Chinese mainland households, being rich means earning 136,000 yuan (US$19,800) or more annually. With more wealth comes more choice. And 11m new affluent consumers are being created every year and they want better health outcomes and more luxury goods. 56% of Chinese consumers say one motivation for buying premium products is to show off their success.

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Growth of yoghurt sales a sign of this new luxury buying.

EUROPE AND US

  • 23% of investors expect an outright “boom,” according to a survey released Tuesday by Bank of America Merrill Lynch, while the number predicting negligible growth over the next 12 months has fallen by more than half to 43%.

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Goldman Sachs all-time high. Buffett’s Berkshire Hathaway now US$250,000. No comment necessary.

Greek economy going backwards. Fell by 0.4% against expectations of a 0.4% GDP growth. Jeroen Dijsselbloem, the head of the Eurogroup of finance ministers, said that the Greek debt situation was not an “acute crisis”. They have until July to save for eth big payments coming up.

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Good luck. Suspect as its peak holiday season the credit card machine will not be working.

 

No joke tonight Clarence is off to the Open Air Cinema!!

 

XXX

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NT Markets

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