ASX 200 raced ahead another 52 points to 5873.5 as the buyers return in droves. Fund managers are being forced to deploy cash as M&A activity surges. Banks once again the big winners as industrials in the spotlight. Asian markets modestly higher with japan up 0.02% and China up 0.27%. AUD 76.44c and US Futures up 20 points.
STOCKS AND SECTORS
- Banks and financials another stand out day with the Big Bank Basket continuing to push higher at $186.82. Interestingly the basket high its all-time high back in March 2015 of around $211. The pricing power of out of cycle rate rises is causing analysts to reassess the growth potential of the banking franchises and bringing the buyers back. Insurers also felt the love as Suncorp (SUN) +0.84%, Insurance Group Australia (IAG) +1.00% and QBE Insurance (QBE) +0.63%. Seems the insurers are unphased by the recent Tropical Cyclone Debbie.
- Miners were better but not racing away. BHP +0.29%, RIO +0.70% and Fortescue Metals (FMG) +0.33%. Base metals were better too with Syrah Resources (SYR) +4.81% continuing the bounce from a very oversold position. Metals X (MLX) +4.20% also put in a good day finally with Alumina (AWC) +2.55% and BlueScope (BSL) +2.21%.
- Gold stocks not a happening thing today. Seems this sector continues to underperform as the rest of the market heads higher. Oceanagold Corp (OGC) -3.73%, Westgold Resources (WGX) -3.72% and Northern Star (NST) -2.17%.
- Energy stocks firm Woodside Petroleum (WPL) +0.98%, Origin Energy (ORG) +2.16% and even Santos (STO) +1.05% managed a small gain.
- Industrials were the hot spot again today. Infrastructure stocks gaining ground as Transurban (TCL) +1.38%, Sydney Airport (SYD) +1.66% and Aurizon Holdings (AZJ) +0.56%. Consumer stocks also rallied with Harvey Norman (HVN) +2.07%, Flight Centre (FLT) +2.31% and JB Hi-Fi (JBH) +3.05% (see todays’ Midweek Macro). Quintis (QIN) -9.60% after the US research house answered the rebuttal from the company and reiterated its valuation of zero cents for the company.
- Healthcare brimming with vigour today with Ramsay Health Care (RHC) +2.47%, CSL +1.08%, Sonic Healthcare (SHL) +1.23% and Mayne Pharma (MYX) +2.88% continuing to enjoy the Obamacare result.
- IT and Telcos a tale of two sectors. Telcos going nowhere fast with Telstra (TLS) +0.22% continuing to struggle, Vocus Group (VOC) +0.93% and TPG Telecom (TPM)+0.58% eking out small gains. IT stocks though in favour as the buyers have come roaring back for oversold and over shorted stocks like Aconex (ACX) +7.28%. Link Administration (LNK) +2.79% and Computershare (CPU) +1.58%.
- REITS too were bid with Westfield Corp (WFD) +0.91% and Goodman Group (GMG) +1.04% to the fore.
- Speculative stock of the day: Capital Mining (CMY) +69.23% after updating the market in its dispute with Canadian cannabis company Broken Coast Cannabis. CMY will get C$250,000 plus importantly the right to negotiate an investment in BCC. A leading expert in the sector Cameron McDonald-Stuart has been appointed a non-executive director of CMY.
- Long standing Sydney Airport (SYD) +1.66% CEO Kerrie Mather has somewhat unexpectedly resigned, believing the time is right for moving on. This comes as the company must put up or shut up in the building of Badgerys Creek airport due May 8th. The company will conduct a global search for a new CEO.
- Cooper Energy (COE) has announced a $151m equity raising to help fund its new Sole offshore gas project in Victoria’s Gippsland Basin. The Sole gas project is expected to cost $355 million, and Cooper says the project will increase the company’s proven and probable reserves by 43 million barrels of oil equivalent. It is a one for two non-renounceable entitlement offer at 31.5c.
- Thorn Group (TGA) -11.71% responded to media speculation on a potential class action on its past lending practices from Maurice Blackburn worth $50m over misleading contracts.
- Nearmap (NEA) +13.64% issued a business update with a record quarter in the US and significant growth in both their key markets. The company reaffirmed its FY17 guidance of $4.5m-$6.5m.
- Atlas Iron (AGO) +11.11% announced Pilbara Minerals will farm in to its lithium assets. Atlas will be free carried to a decision to mine.
- Late this afternoon Premier Investments (PMV) announced it had bough the 10% stake in Myer (MYR). Game on!
- World trade is recovering with trade volumes increasing by 2.9% in January to a three-month average year on year growth compared with 1.3% as a whole in 2016.
- Toshiba board has approved a Chapter 11 bankruptcy filing in the U.S. for its Westinghouse Electric unit after the Japanese company warned of a possible US$6.2 billion writedown on the nuclear energy business.
EUROPE AND US
- Tesco pays GBP129m to settle Serious Fraud Office probe into accounting scandal.
- The UK PM Theresa May has signed the letter to formally divorce the EU. According to some sources it was brief, ‘it’s not you it’s us. Sorry. It’s over.’