- ASX 200 gives up early gains as banks struggle. Closes up 4 at 5720.
- Early buyers step back after 5749 high.
- Capital raisings weigh on optimism.
- Consumer stocks in demand.
- AUD 75.77c steadies.
- Dow Futures up 19 points.
- Asian markets up led by CSI 300 in China, up 1.12%
- Aveo Group (AOG) -11.15% falls 10% on Fairfax media reports of issues in retirement villages. Big ‘Four Corners’ piece tonight will not help.
- Metcash (MTS) +5.02% after a return to dividends and better than expected results. Big short position gets squeezed.
- Crown (CWN) executives plead guilty and receive nine to ten months in jail.
- Greencross (GXL) +4.39% showing signs of life after a disappointing last few months.
- Mesoblast (MSB) -5.24% continues to slide after results of Arthritis trial presented in Europe.
- Ardent Leisure (AAD) -3.02% falling again after the recent update to the US Main Event business.
- QBE Insurance (QBE) -2.19% still feeling the wrath of investors after the latest ‘surprise’.
- Rio Tinto (RIO) +1.26% receives another bid from Glencore for its coal assets trumping Yancoal (YAL).
- Downer EDI (DOW) +0.98% moves to 44.06% of SPO
- Consumer stocks Wesfarmers (WES) +0.83% and Woolworths (WOW) +0.91% rally on MTS results. Flight Centre (FLT) +2.26% continues to defy gravity.
- Air Auckland Airport (AIA) -0.59% updated its traffic numbers with a 10.4% increase in total passengers, 10.1% increase in total international passengers and a 17.1% increase in Queenstown Airport’s total passengers.
- BHP +0.18% has put a number on the South Flank expansion in the Pilbara. Initial funding of US$184m of the US$2bn project has been approved. The project final decision will not be until 2018
- Austal (ASB) -0.28% has won a $779m US navy ship building contract. The ship they will be building is an Independence Class combat ship.
- Metcash (MTS) +5.02% released its full year earnings with a 5.4% increase in sales revenue but a profit of $171.9m, down 20%. The company is also resuming dividend payments with a final distribution of 4.5c a share, payable July 27.
- Collins Food Group (CKF) have acquired 28 KFC restaurants(?) for $110.2m and will fund the deal with a capital raising at 455c. A pro-rata accelerated non-renounceable entitlement offer for $44.1m and $69m in debt will pay for the deal.
- Suncorp (SUN) +0.75%has revised its terms for Tower (TWR) to NZ$1.40 a share in cash. The deal is still subject to regulatory approval.
- Link Administration Holdings (LNK) has gone into a trading halt pending a capital raising to fund the UK acquisition of Capita Asset Management for $1.5bn. CAS has revenue of GBP316m and EBITDA of GBP72m. Capital raising will consist of a $883m fully underwritten 4:11 accelerated renounceable entitlement offer at 675c. The company has also issued a trading update with operating EBITDA of between $217m-$219m and NPATA of $120m-$130m. Transformational deal for LNK.
- The merger between Touchcorp (TCH) unchanged and Afterpay (AFY) +1.1% has progressed, receiving a sanction from the Supreme Court of Bermuda. Touchcorp have already received approval from its shareholders. The new company will be called Afterpay Touch Group
- Vicinity Centres (VCX) -0.72%has entered agreements to sell its Wodonga Plaza asset for $43.5m and its Terrace Central asset in New South Wales for $33.5m. These sales are at a 7.7% premium to their book value as of December 31st, 2016.
- Rio Tinto (RIO)+1.26% has received a revised offer from Glencore of US$2.68bn to acquire the company’s Australian subsidiary, Coal & Allied Industries. RIO have said they will considered it and compare it to the current offer from Yancoal (YAL).
- Coca-Cola Amatil (CCL)+0.11% have signed agreements with Charter Hall, selling its Richlands manufacturing plant in Queensland for a one-off gain of $100m before tax.
- Monadelphous (MND)-1.44% gained new construction and fabrication contracts worth $170m.
- BHP +0.28% has approved initial funding of US$184m for its South Flank project when its Yandi mine in WA reaches the end of its economic life.
- Navitas (NVT)+0.64% has renewed its agreement with the University of Hertfordshire as the education provider for Hertfordshire International College for another 6 years. It was the company’s first college in the UK.
- Bega Cheese (BGA)+3.19% has successfully completed an institutional placement at 535c to raise $122.5m. There will also be an SPP for retail shareholders.
- Crown Resorts (CWN)+0.31% 17 employees have pleaded guilty to gambling crimes with Australian Executive, Jason O’Connor sentenced to 10 months prison and two other Australian employees to 9 months.
- The national average price of unleaded petrolfell by 4.5 cents to 123.5 cents a litre in the past week, according to the Australian Institute of Petroleum.
- House prices have again lifted in Sydney and Melbourne, with the median price of a house sold in the Harbour City now at $1,000,500. In the year to date, Sydney home prices have lifted by 5.4%, Melbourne’s are 4.8%.
- Air bag supplier Takata has lodged a record breaking bankruptcy in Japan with around US$10bn in liabilities.
EUROPE AND US MORNING Headlines
- Italy’s government is bailing out two banks in the Venice region, in a deal that could cost the government up to 17bn euros and will leave the lenders’ good assets in the hands of the nation’s biggest retail bank, Intesa Sanpaolo. Popolare di Vicenza and Veneto Banca have collapsed after years of mismanagement and poor lending.
- Google faces the EU antitrust penalty decision this week which could be around EUR1bn.
- In the UK, Theresa May is hoping to play Glastonbury next year but looks increasingly vulnerable. The PM has now guaranteed free health cover when UK citizens holiday in Europe. The team pf negotiators have asked that Brussels keep the current scheme or the UK government will foot the GBP155m a year bill. Expect the government to be paying then.
- Fed Reserve bank member John Williams said he expected inflation to rise to 2% with unemployment edging lower. Current inflation weakness is only temporary.
- Williams affirmed the Fed’s intention to begin trimming its $4.5 trillion balance sheet this year, saying the central bank would start off “nice and easy.”
And finally……………….Thanks to my friend Todd for this one…
A blind man enters a bar and find his way to a barstool.
After ordering a drink, and sitting there for a while, the blind guy yells to the bartender, “Hey, you wanna hear a blonde joke?”
The bar immediately becomes absolutely quiet. In a husky, deep voice,the woman next to him says, “Before you tell that joke, you should know something. The bartender is blonde, the bouncer is blonde and I’m a 6′ tall, 200 pound blonde with a black belt in karate. What’s more, the fella sitting next to me is blonde and he’s a weightlifter. The woman to your right is a blonde, and she’s a pro wrestler. Think about it seriously, mister. You still wanna tell that blonde joke?”
The blind guy says, “Nah, not if I’m gonna have to explain it five times.”