Today’s Headlines

  • ASX 200 rises 28 to 5756 as enthusiasm wanes slightly.
  • Volume again muted with high of 5779.
  • ASX 200 up 1.1% for the week.
  • Banks lead gains ahead of APRA report next week.
  • Big miners flat line. Golds sold off.
  • Energy stocks firmer on oil price rise.
  • REITs recover with bond proxy infrastructure.
  • Yellen finishes testimony. 3% GDP ‘a challenge’.
  • AUD at a four-month high 77.44c carry trades boosting demand.
  • US Futures up 1. Crucial CPI to come. 0.2% rise expected.
  • Citigroup, Wells Fargo and JP Morgan tonight.
  • Asian markets firmer, best week since March. China CSI 300 down 0.07% Japan up 0.18%.

 

STOCK STUFF

  • WOR +6.89% ahead of NSW budget next week.
  • SBM -5.99% gold suffers profit taking.
  • NST -6.24% after production report yesterday.
  • SGR +3.52% Genting sell down.
  • DMP +4.28% short covering.
  • FMG -0.38% on profit taking.
  • TLS -0.23% dividend concerns.
  • TCL +1.76% Bond proxy stocks recovering.
  • CSL -1.41% profit taking on higher AUD.
  • QAN -4.56% higher oil price hurting.
  • NAN +3.39% long awaited bounce.
  • Biggest risers – WOR, DMP, SGF, NAN, APO, SGR and ECX.
  • Biggest fallers – NST, SBM, QAN, ALQ, EVN and RSG.

TODAY

  • Programmed Maintenance (PRG) +% An agreed bid at 302c from a Japanese company at a 68% premium. A special dividend may be declared before a deal completes, which would lower the offer price to shareholders Positive for DOW as the SPO bid will be seen in a more positive light given the big price paid by PERSOL. PERSOL is one of Japan’s biggest staffing companies, with 32,000 employees. It has a $5.7bn market capitalisation versus PRG at $463.5m
  • Pioneer Credit (PNC) +% NPAT guidance increased to $10.7m. FY18 expected to be at least $16m.
  • Star Entertainment (SGR) +% Genting has sold its 5.62% stake, or 46.4 million shares, at $5.07 each.
  • David Jones’ crucial like-for-like sales have fallen for the year with its South African parent company blaming the decline on weak consumer confidence in Australia. Comparable sales fell 0.7% in the year to June 25. It is the first time full-year sales have dropped under the new owner. Country Road Group, suffered a 0.4% drop in like-for-like sales while overall sales rose 5.1%, in Australian dollar terms.
  • Woolworths (WOW) +% has announced plans to phase out single-use plastic bags over the next 12 months. Coles has followed suit.

BOND MARKET UPDATE

Daniel Craig will be back playing 007..god knows how much he has been offered.

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ECONOMIC NEWS

Quick update on where we are with global interest rates.

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ASIAN NEWS

  • Singapore’s economy grew in the second quarter, narrowly dodging a recession thanks mainly to robust growth in its electronics and precision engineering industries. Gross domestic product grew 2.5% in the second quarter from a year earlier, unchanged from a revised first quarter growth figure, and below forecasts of 2.8% growth.
  • Confectionery China Candy Holdings tumbled as much as 64% on Friday after an offer from the heiress to Chinese beverage producer Hangzhou Wahaha Group lapsed.
  • Uniqlo owner Fast Retailing fell on Friday after lower third quarter profit disappointed amid a weaker yen and sluggish domestic sales.

EUROPE AND US MORNING Headlines

  • Bastille Day. Vive la France. Vive La Republique.
  • The OBR warned of “nasty fiscal surprises” to come for the government but dismissed the impact of the EU ‘divorce bill’ on the economy.
  • It is down to London and New York for bragging rights to have Saudi Oil giant Aramco listed. The City has edged in front after the FCA has proposed a rule change that would allow state-owned companies to apply for a special category of premium listing with less onerous disclosure and regulatory requirements. Usually there must be at least 25% of shares available. Aramco is looking to sell a 5% stake in the US$2 trillion company. Late 2018 seems the likely float date.

And finally……………

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Malcolm Turnbull was seated next to a little girl on an air plane and he turned to her and said, “Do you want to talk? Flights go quicker if you strike up a conversation with your fellow passenger.”

The little girl, who had just started to read her book, replied to the total stranger, “What would you want to talk about?”

“Oh, I don’t know,” said Malcolm Turnbull. “How about Politics, Tax Benefits, Negative Gearing and Welfare?” as he smiled smugly.

“Okay,” she said. “Those could be interesting topics but let me ask you a question first. A horse, a cow, and a deer all eat the same stuff – grass. Yet a deer excretes little pellets, a cow turns out a flat patty, but a horse produces clumps. Why do you suppose that is?”

Malcolm Turnbull, visibly surprised by the little girl’s intelligence, thinks about it and says, “Hmmm, I have no idea.”

To which the little girl replies, “Do you really feel qualified to discuss Politics, Tax Benefits, Negative Gearing and Welfare, when you don’t know shit?”

And then she went back to reading her book.

 

Have a great weekend

 

Clarence

XXX

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NT Markets

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