- ASX 200 falls another 21 points to 5726 as results fail to fire.
- High 5743 Low 5699.
- Late rally as earnings dominate.
- Banks and financials fall.
- Healthcare and Industrials slip as big miners and energy rise.
- Consumer stocks and telcos under pressure.
- AUD steady at 79.20c.
- US Futures down 8.
- Asian markets mixed with China CSI up 0.29% and Japan down 0.42%
- BXB -1.33%
- GMG +1.29%
- BSL -21.83%
- NHF -3.31%
- BPT +10.48%
- GEM +8.85%
- GWA -0.32%
- GOZ -0.93%
- CDD +14.22%
- FMG +6.36%
- APO +6.13%
- HSN -4.23%
Movers and Shakers
- TLS -0.77% negative broker commentary.
- CCL -0.35% state deposit tax to hit profits.
- MLX +3.57% commodity price rises.
- TWE +1.79% positive broker comments after results.
- WHC +3.12% coal price rises.
- GNC +2.44% Norges Bank now a substantial shareholder.
- MSB -6.11% rally finished.
- SDA -3.16% sector under pressure.
- FBR +7.55% positive sentiment continues.
- AAD -3.94% confirms Ariadne only wants two board seats.
- BUB +11.11% positive reaction to new chairman.
- KGN 18.01+% positive broker upgrades.
- Speculative stocks of the day: The Environmental Group (EGL) +204.76% after final; results late Friday. Profit up 1358% to $1.699.5m. Underlying EBIT $2.6m, with strong performances from Baltec and Total Air Pollution.
- Biggest risers – CDD, BPT, GEM, FMG, ASL, ACX and AVZ
- Biggest fallers – MSB, GXY, ORE, AAD, SWM and SDA.
- Michael Hill (MHJ) +0.81%% Net profit up 67% to A$32.6m. Net debt up A$439.4m from A$32.0m.
- Bluescope Steel (BSL) -21.83% Net profit up 102% to A$716m. Underlying net profit up 112% to A$651m. FY revenue up 17% to A$106bn. Company says guidance for 1H FY18 will be 80% of 2H17. Has announced a further A$150m share buyback. And CEO, Paul O’Malley to retire. It also revealed the ACCC is investigating cartel pricing for steel products.
- Nib Holdings (NHF) -3.31% FY net profit up 29% to A$119.6m. Operating profit up 25% to A$150.6m. Sales revenue up 8% to A$2.04bn. Final dividend 10.5c. Outlook was soft with higher claims putting margins under pressure. CEO was cautious.
- Brambles (BXB) -1.33% FY results were soft thanks to asset impairments. Sales revenue up modestly at 6%. Operating profit declined 18% thanks to a non-cash impairment charge of US$120m. NPAT declined 69% thanks to non-cash impairment of its North America recycled pallets business, CHEP Recycled. The company says there will be more on-off items weighing in on FY18 underlying profit.
- APN Outdoor Media (APO) +6.13% FY net profit down 19% to A$15.8m.
- Fortescue Metals (FMG) -6.36% FY net profit up 113% to US$2.09bn. Revenue up 19% to US$8.45bn. Underlying EBITDA up 48% to US$4.74bn. Cash at end FY17 was US$1.8bn, net debt – US$2.63bn. Final dividend 25c per share. A good result and the increased dividend is a bonus. 45c in dividends puts it on a 8.5% yield. C1 costs again lower ar US$11-US$12wmt. Payout ratio will be 50-80% of NPAT.
- Goodman Group (GMG) -1.29% Guiding FY18 operating EPS of 45.7c – up 6% on pcp and operating earnings of A$828m.
- Vocus Communications (VOC) -14.60% FY18 underlying EBITDA guiding to A$370m-$390m, and revenue A$1.9bn – $2bn. Both bidders have walked away leaving the company on its own.
- Caltex Australia (CTX) -0.09% chairman Greig Gailey has stepped down due to health reasons, to be replaced by former Goodman Fielder chairman Steven Gregg.
- Beach Energy (BPT) +10.48% positive reserves update amid in-line FY result. Core net profit surged to $162m. The company also said it was assessing ‘multiple acquisition opportunities’. Beach doubled its final dividend to 1c.
- Westpac Bank is ‘on track’ to reduce interest rate only loans by 30% by the September deadline. Westpac said today it had cut the proportion of interest-only loans to 52% in the third quarter, down from 52% in the second quarter. It also said interest-only lending now represents 36% of new loans, down from 47% last quarter. Westpac said investor lending growth is 5.9%, well below the 10% growth cap introduced by APRA in December 2014.
BOND MARKET UPDATE
- In China, bank leverage fell for the first time in 10 years. the outstanding amount of wealth-management products, especially those sold to other financial institutions, fell by a cumulative 1.9 trillion yuan.
- 10 US Sailors are missing after a collision with an oil tanker.
- Thailand’s economy rose at its fastest pace in 4 years. GDP up 3.7% against estimates for 3.2% growth. Manufacturing growth slowed to 1% from 1.3%; construction contracted 6.2%.
EUROPE AND US MORNING Headlines
- Prices for UK homes dipped 0.9% month on month in August, the largest fall seen this year, figures from property portal Rightmove show.
- Sempra Energy is nearing an agreement with the owner of the regulated Texas utility Oncor to buy it for US$18.45bn spoiling Buffet’s deal to buy the company for US$18bn.
- Carl Icahn, the billionaire investor, is stepping down from his role as a special advisor to President Donald Trump.
“Well, he had a great round on Wednesday, broke par, I heard. Anyway, he finished early and drove home only to find his wife in bed with another man! No questions asked, he just shot them both! Isn’t that terrible?”
“Could have been worse,” George commented.
“How?” Tom asked.
“If he’d have finished early on Tuesday,” George began, “he would have shot me!”