ASX 200 staged an afternoon rally to close down 16 points at 5876 $ despite falls in iron ore miners and banking stocks. BHP held firm though. Energy and consumer stocks bucked the trend as company updates dominated. Asian markets again mixed with Japan down 0.70% and China relatively unchanged. AUD continues its falls to 74.15c. US Futures up 33.
STOCKS AND SECTORS
- Banking and financials mixed with the Big Bank Basket easing back again to $182.28 as analysts pored over the National Australia Bank (NAB) -0.54% numbers. Certainly, the market liked them better than the ANZ -1.66% ones from Tuesday but the sector continues to face headwinds. Insurers too mixed with Suncorp (SUN) +0.92% continuing to push ahead whilst QBE Insurance (QBE) -0.77% and IAG -0.16% posted modest losses. Elsewhere wealth managers found some friends with Macquarie Group (MQG) +0.42% set to report tomorrow.
- Miners had a nasty day today in RIO -1.80%, Fortescue Metals (FMG) -4.79% although BHP +0.13% held very firm despite falling copper, falling iron ore and oil under pressure. Must be the US hedge fund in town. Base metals though fell away South32(S32) -1.47%, Independence Group (IGO)-2.60%, Western Areas (WSA) +1.94% and Oz Minerals (OZL) -0.59%.
- Gold miners eased again with Newcrest (NCM) -1.19%, Oceanagold Corp (OGC) -2.93% and Silver Lake (SLR) -6.93%.
- Energy stocks did ok. Woodside (WPL) +1.00%, Oil Search (OSH) +0.69% and Santos (STO) +0.28%.
- Industrials had another solid day. Qantas (QAN) +1.38%, Sydney Airport (SYD) +1.13%, and Transurban (TCL) +0.49% all doing well as did French tollroad operator Macquarie Atlas Roads (MQA) +1.24%.
- Consumer stocks came away from the Macquarie Conference in fine spirits Flight Centre (FLT) +5.80% Webjet (WEB) +3.27%, JB Hi-Fi (JBH) +0.47%, Smartgroup (SIQ) +2.84% and Harvey Norman (HVN) +0.93%.
- Healthcare saw losses with Mesoblast (MSB) -14.33% being hit hard as did Sirtex (SRX) -1.99%, Australian Pharma (API) -3.04% and Mayne Pharma (MYX) -1.24% on broker downgrades.
- Telecoms and IT a mixed bag. Telstra (TLS) -0.94%, Vocus Group (VOC) -2.46% continued down after broker downgrades, though TPG Telecom (TPM) +3.07%. Some stand outs in the IT sector with Wisetech Global (WTC) +5.60%, Aconex (ACX) +3.02% and Computershare (CPU) +2.24%
- IPO of the day: Cann Group (CAN) +115.00% after the locally focused cannabis group raised $13.5m at 30c for a market cap of $31.5m. Supporting the company was Canadian Aurora Cannabis Inc which took a 20% cornerstone position. Aurora is Canada’s second largest listed medicinal cannabis company.
- IPO runner up: The Hydroponics Company (THC) +102.50% made its debut today. The company raised $8m and is the leading manufacturer and distributer of cannabis products and hydroponic equipment.
- National Australia Bank (NAB) -0.54% after announcing numbers this morning of a cash profit of $3.29bn around 1% ahead of consensus. Dividend of 99c in line and a 1% rise in EPS to 124c.
- Santos (STO) +0.28% after news that the two Chinese firms Hony and ENN had increased their stakes in the company last night together with the AGM today. Chairman Peter Coates will also step down.
- APN Outdoor (APN) -1.65% and oOh!Media (OML) -3.56% after the ACCC revealed concerns with the proposed merger. The regulator now believes the merger may raise prices for advertisers and simultaneously cut service levels. This is only the preliminary view but the ACCC believes that the group will have more than 50% of the out of home advertising market and it may further damage the interests of site owners.
- Vocus Group (VOC) -2.46% back in focus after yesterday’s shock 2nd downgrade with reports the company may sell its data centres with a valuation of around $160m. Vocus has 20 data centres across Australia, which had $20.7mrevenue in the six months to December 31.
- Caltex (CTX) +2.20% has been given the green light by the ACCC for its Victorian Milemaker acquisition of 46 sites in the $95m deal.
- Macmahon Holdings (MAH) in trading halt with a proposed deal with new best friend Anman Mineral Nusa Tenggara.
- BHP Billiton (BHP) +0.13% has been resistant to the plan ‘Value Unlock’ proposed by US Hedge fund Elliott Advisers with the Treasurer now weighing in and warning that any scrapping of the ASX listing would be a ‘criminal offence’. Looking more and more like a non-starter.
- Eclipx (ECX) -3.95% reiterated guidance and moved to buy Gray’s eCommerce (GEG) +23.81% in a $179m scheme of arrangement recommended by the board of GEG.
- Zip Holdings IPO has been pulled due to lack of interest. Zip had been seeking to raise $301.7m at 215c valuing the company at $301.7m
- The trade balance fell to a surplus of $3.1bn in March from $3.6bn in February, but the surplus was still the third highest on record. It came in slightly below expectations of $3.25bn. Exports rose 2% in March, while imports were up 5.0%.
- RBA chief Philip Lowe said household debt rising faster than incomes has left the economy in a weaker position to deal with shocks, and reminded borrowers that interest rates will one day rise. He also said a manageable downturn could turn into ‘something more serious”. The RBA chief went on to say that the current record-low rate environment would not last forever.
Not a pretty picture.
- Dalian Iron ore has fallen another 7.3% in limit down moves in China. The country’s official steel industry purchasing managers index for April fell below 50, signalling a return to contraction. Also in the news for iron ore was shipping export volumes from Port Hedland climbing to 42.3m tonnes in April. A record for an April and the third largest export volumes. For the year exports are up 6.6%.
- Meanwhile the front page of the government run Financial News has urged investors not to overreact to regulators move to curb excessive borrowing and speculation.
This from the front page
EUROPE AND US
- Could be that tonight is the night that Obamacare dies as GOP leaders reckon they have the number snow.
- The divorce bill for Brexit looks to be growing as more and more lawyers get involved. It is now up to EUR100bn. Certainly not something the ‘Brexiteers’ had counted on. Plenty of muddy water to flow under this Westminster Bridge.
- HSBC announced a surprise increase in first-quarter profit. Adjusted pre-tax profit, which excludes one-time items, rose to US$5.94bn from US$5.3bn a year earlier. HSBC in London has climbed 45% in the past year, supported by US$3.5bn of share buybacks in the past eight months. No new buy back was announced.
- French election polls. All over bar the ‘en criant’. “La grosse dame a chanté”.
A cowboy walks into a bar and takes a seat next to a very attractive woman.
He gives her a quick glance then causally looks at his watch for a moment.
The woman notices this and asks, “Is your date running late?” “No”, he replies,”I just got this state-of the-art watch, and I was just testing it..” The intrigued woman says, “A state-of-the-art watch? What”s so special about it?”
The cowboy explains, “It uses alpha waves to talk to me telepathically.”
The lady says, “What”s it telling you now?” Well, it says you’re not wearing any panties.”
The woman giggles and replies “Well it must be broken because I am wearing panties!”
The cowboy smiles, taps his watch and says, “Damn thing’s an hour fast.”