- ASX 200 falls 67 to 5693 on North Korean worries.
- High of 5744 Low 5674.
- Weekly loss of 12 points. 59 companies report next week.
- 41 companies reported. Average down 3.46%
- Broad based selling with financials and materials in focus.
- ASIC confirms it is investigating CBA on AUSTRAC issues.
- REITs and insurers under pressure.
- Gold miners a rare bright spot.
- Defensives find some buyers CCL and TLS rise.
- REA results disappoint.
- NAB quarterly update as expected.
- Iron ore futures down 4% in Asia.
- AUD relatively stable at 78.47c.
- US Futures fall 15.
- Asian markets shaken but not stirred: Japan down 0.05% and China down 1.52%
- WGX +7.50% gold miners gaining ground.
- RCR +4.19% contract win for solar farms.
- ACX +5.14% short covering continues
- TLS -unchanged- defensive buyers stepping in.
- DMP -0.89% falls flat again.
- LYC -9.38% Credit Suisse became a substantial shareholder. With 5.56%
- WEB -2.50% optimism wears off.
- VOC -2.48% KKR buying PEP looks to have worried the bulls.
- MFG -3.46% disappointing results yesterday
- FMG -4.51% iron ore loses gloss.
- QAN -0.86% on travel issues due to risks rising.
- VAH +5.41% gathering momentum after results.
- Speculative stocks of the day: Vita Group (VTG) +28.00% following a new master agreement with Telstra extended t0 2023.
- Biggest risers – WGX, GOR, VAH, ACX, NST, AVN and HSO.
- Biggest fallers – LYC, SIG, AAC, REA, GXY and AGI.
- National Australia Bank (NAB) -1.02% reported cash earnings of $1.7bn for the third quarter, up 5% on the year-earlier period, and 2% on the March quarter. NIM was 1.82% down 11bps. CET1 ratio 9.7%. The bank said the strong results in lending combined with the lower bad and doubtful debts were offset by lower Markets and Treasury Income and higher expenses. The bank estimates the cost of the bank levy at $375 million annually or $265 million post-tax.
- REA Group (REA) –5.95% Disappointing result with a net profit of $206m a miss in expectations down 19% from last year. REA reported a non-cash write down of $182.8m to the goodwill of its Asian businesses in June, due to the decline in several Asian property markets.
- Brambles (BXB) –2.45% Management have indicated they intend to divest their North American based pallet business which would trigger a US$243.8m non-cash impairment in FY17. The company will retain 1400 employees to work on their US site.
- Vicinity (VCX) –0.74% Grant Kelly tipped to replace departing CEO and MD Angus McNaughton.
- Ardent Leisure (AAD) –0.49% Revenue and Profit drop following the 45-day closure in the aftermath of the Dreamworld tragedy. EBITDA -4%. The US business is still only showing anaemic growth.
- Baby Bunting (BBN) –17.95% the company reported a 47% lift in full-year net profit to $12.25m for the year, with total sales up 17.4% to $278m. comparable sales in the six weeks to August 6th were down 4% due to lower pram sales and changes to its promotions. Final fully franked dividend of 4.3c, down 2c.
- Australian Agriculture (AAC) -6.99% following the resignation of CEO and MD Jason Strong. No succession plan either.
- Sigma Healthcare (SIG) -8.06% have warned underlying earnings will come in around $90 million compared to expectations of $95m market expectations, citing “challenging” industry conditions.
- News Corp (NWS) -5.43% News Corp posted a loss of $US643 million for the year, compared with a year-earlier profit of $US235 million. Nearly $US1 billion in non-cash impairments and write-downs with $US785 million from the write-down of the value of its UK and Australian newspapers, including The Australian, The Daily Telegraph and The Herald Sun.
The governor’s main messages from his testimony in front of parliament today:
- the next move for interest rates is more likely to be up than down,
- won’t be for quite some time because inflation is still too weak and unemployment too high.
- wages growth of 4% could be possible.
- On bank culture, Lowe says there needs to be more focus on service over profits, and a rebuilding of trust.
- short-term profit has probably led to not enough attention being paid to risk management issues.
- He called the CBA allegations a “very serious matter”.
Where are rates going? Absolutely no where..let’s make something up then!!!
BOND MARKET UPDATE
- China’s online watchdog has launched an investigation into reports of multiple violations at news services run by Tencent Holdings Baidu and Weibo over reports they are carrying user-generated content laden with “violence, porn, rumours” disruptive to social order. Tencent down 4%.
- A final reading of Singapore’s GDP showed the economy grew at a faster pace than expected in the second quarter as the manufacturing sector expanded at a robust rate.
EUROPE AND US MORNING Headlines
- France is on the warpath over US tech stocks underpaying taxes. Airbnb paid less than EUR100,000 last year.
- Trump says Russia expelling diplomats will ‘save a lot of money’.
- A project manager in the US has tried to blind date six women in one evening reasoning he can ‘manage his time effectively’. Not so it seems. They all met and became friends Another ‘epic fail’ this week.
How is it that Malcolm can pledge to stand with US on a war but has to put the marriage equality question to a joke postal vote.