Monday 25th September – Australian Market Wrap

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Today’s Headlines

  • ASX 200 rises 2 to 5684 after big miners and CBA slip.
  • Cautious start to the week as rally falters.
  • High 5710 Low 5680
  • Banks give back early gains as CBA downgraded
  • Big miners finally succumb to Iron ore falls.
  • Energy stocks hold the line.
  • Healthcare and Industrials do better.
  • Consumer staples slip. TLS falls again.
  • AUD firms to 79.68c
  • US Futures down 7.
  • Asian markets mixed: China CSI down 0.41% and Nikkei up 0.35%.

STOCK STUFF

Ex-Dividend Today

  • IMF -1.95%
  • SGF -3.74%
  • CNU -4.84%
  • SWM -5.52%
  • WPP -5.45%
  • MRN -unchanged.

Movers and Shakers

  • CBA -1.06% broker downgrades
  • TPM -1.19% questions of strategy.
  • PEP +4.29% increased off from KKR.
  • A2M +3.62% cream rises.
  • GXY -3.97% metal price falls
  • ORE -4.32% metals fall.
  • MIN -1.48% lithium stock slip.
  • ZEL +2.37% Auckland pipeline update.
  • TLS -0.84% woes continue.
  • WSA +3.20% despite falls in nickel.
  • MGC +6.32% bids coming.
  • MYR -0.69% Lew ‘bitterly disappointed’ as its ‘lost its way’.
  • Speculative stocks of the day: Jervois Mining (JRV) +35.14 as a new CEO has been appointed
  • Biggest risers – PEP, PLS, A2M, WSA, RCR, MYX and REG.
  • Biggest fallers – WPP, ORE, GXY, SGF, MTS and ASL.

TODAY

  • Premier Investments (PMV) -2.55% net profit rose just 1.2% to $105.1m in 2017 as soft sales at Portmans, Dotti and Jacqui E and a weaker pound, though strong sales at Smiggle stores in Australia and overseas. Underlying EBIT at Premier Retail rose 7.3% to $136.0m, with earnings in the six months ending July falling 12.6% after rising 10.7% in the first half. Total sales rose 5.7% to $1.1bn, with like for like sales across the group rising 1.1%on a constant currency basis.
  • Cimic (CIM) +0.44% Has raised its syndicated bank facility to A$2.6bn, replacing its A$1bn facility set to mature in December.
  • Fontera (FCG.NZ) -0.36% says its reduced margins across its business has lowered NPAT for July to US$547m)-11% on the pcp). It said that despite lower milk volumes due to poor weather.
  • Worley Parsons (WOR) -2.14% Deutsche estimates that WOR’s top shareholder is likely to pay a 20-30% premium should it make another tilt at full control of the company; something it failed to achieve last year.
  • Propertylink (PLG) +0.56% has refused to engage and has dismissed a $573m takeover proposal from fellow fund manager Centuria (CMA) -0.41%, which had established a 17%stake in its target this month.
  • Fonterra (FSF) -0.36% has confirmed it is has made a bid for Murray Goulburn (MGC)+6.32%. We wrote on the attractions of MGC a few weeks ago and it looks like it is happening.

ECONOMIC NEWS

  • Government gives east coast gas companies one ‘last’ chance to free up enough gas from exports for the domestic market. Turnbull is to meet again with STO, ORG and Shell. Separate reports from the ACCC and the Australian Energy Market Operator, which warned there was a significant risk of a gas shortfall in the eastern states over the next two years, three times worse than thought just six months ago.
  • The national capital city auction clearance rate reached 70.7%, up from 66.7%the previous week, but Corelogic said that was down compared to the clearance rate of 75.4% recorded the same time a year ago, when 2480 homes went under the hammer. Home prices were flat in Sydney, Brisbane, Adelaide and Perth but grew marginally in Melbourne.

BOND MARKET UPDATE

bonds 25.9.png

ASIAN NEWS

  • iPhone disappointment runs over into Taiwan suppliers. Hon Hai Precision Industry which assembles the iPhone and other Apple devices, has fallen 10% since Apple unveiled its collection of new phones. Other suppliers across the region, including Taiwan’s Pegatron Corp. and South Korea’s LG Innotek Co. have plunged more than 13%. Apple iPhone 8 pre-orders are “substantially lower” than iPhone 7 and iPhone 6 levels.
  • The Chinese crack down on property speculation Eight more cities in China rolled out restrictions over the weekend, with most banning home resales within two to three years of purchase. Since Friday, Xi’an, Chongqing, Nanchang, Nanning, Changsha, Guiyang, Shijiazhuang and Wuhan have tightened housing controls. In Shijiazhuang, buyers will be banned from reselling within five years. At least 44 cities have now imposed restrictions on the resale of properties this year.

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EUROPE AND US MORNING HEADLINES

  • German election results mean some uncertainty. Euro to come under pressure.

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  • UK chipmaker Imagination Tech agrees £550m sale to China-backed Canyon Bridge. Looks like a test for UK government on Chinese takeovers.
  • Ratings agency Fitch on Friday revised Russia’s outlook to “positive” from “stable” noting the country continues to make progress in strengthening its policy framework.
  • The UK’s sovereign rating was downgraded one level by Moody’s on Friday to Aa2 on Brexit inertia.
  • PureTech Health, which is based in Boston in the US but chose to float on the London stock exchange, is ­developing voice recognition software that can diagnose illnesses like Parkinson’s disease and depression just from the sound of your voice.

And finally…………….

After every flight, UPS pilots fill out a form, called a “gripe sheet” which tells mechanics about problems with the aircraft. The mechanics correct the problems, document their repairs on the form, then pilots review the gripe sheets before the next flight.

Never let it be said that ground crews lack a sense of humor. Here are actual maintenance complaints submitted by UPS pilots (“P”) and solutions recorded (“S”) by maintenance engineers:

P: Left inside main tire almost needs replacement.
S: Almost replaced left inside main tire.

P: Test flight OK, except auto-land very rough.
S: Auto-land not installed on this aircraft.

P: Something loose in cockpit
S: Something tightened in cockpit

P: Dead bugs on windshield.
S: Live bugs on back-order.

P: Autopilot in altitude-hold mode produces a 200 feet per minute descent
S: Cannot reproduce problem on ground.

P: Evidence of leak on right main landing gear.
S: Evidence removed.

P: DME volume unbelievably loud.
S: DME volume set to more believable level.

P: Friction locks cause throttle levers to stick.
S: That’s what friction locks are for.

P: IFF inoperative in OFF mode.
S: IFF always inoperative in OFF mode.

P: Suspected crack in windshield.
S: Suspect you’re right.

P: Number 3 engine missing.
S: Engine found on right wing after brief search.

P: Aircraft handles funny.
S: Aircraft warned to: straighten up, fly right, and be serious.

P: Target radar hums.
S: Reprogrammed target radar with lyrics.

P: Mouse in cockpit.
S: Cat installed.

P: Noise coming from under instrument panel. Sounds like a midget pounding on something with a hammer.
S: Took hammer away from midget

 

Clarence

XXXX

Catch Clarence on ABC Brekkie tomorrow at 8.20am..

abc-brekkie

 

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Get a Global take on things at www.ntmarkets.com

 

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