Today’s Headlines

• ASX 200 loses 6 points to 5954 ahead of Cup.
• High 5966 Low 5946. Narrow range. Modest volume.
• Banks tumbles as WBC misses.
• Energy stocks trying hard.
• Healthcare better, miners stutter
• AUD falls after anaemic retail numbers at 76.57c.
• US futures up 13.
• Asian markets weaker with Japan down 0.17% and China CSI down 0.04%.

STOCK STUFF

Movers and Shakers

• ORE +5.12% GXY +3.23% lithium back in demand.
• MFG +3.58% FUM rises to $56bn.
• SYR +5.95% inferred maiden resource at Caula graphite project.
• PLS +4.14% lithium continues.
• ORI -9.78% results and outlook disappoint.
• NCK -2.82% thin trade.
• GMA +4.98% bargain hunting.
• XRO -0.51% on director’s interest.
• BUB +16.97% market cheering goat deal.
• WHA +25.60% on absolutely nothing.
• NUF -2.28% ceasing to be substantial shareholder.
• Speculative stocks of the day: Australian Mines (AUZ) +44.33% a strong $20m raised from the recent placement at 8.5c. The company was swamped with $40m for a $10m placement, hence the expansion to $20m
• Biggest risers – AJM, SYR, ORE, APT, APX and PLS.
• Biggest fallers – ORI, CLQ, NUF, NCK, WBC and MYX.

TODAY

• AGL Energy (AGL) +1.03% has sold its Active Stream subsidiary to Ausgrid, an electricity infrastructure company that supplies more than 1.7 million homes and business across Sydney and the surrounding region. Completion of the deal is expected in early December and will generate $25m in profit, the company says. The subsidiary will also continue to provide metering services to the company but on a non-exclusive basis. AGL started Active Stream in 2015 and has installed more than 230,000 digital meters across New South Wales, Queensland and South Australia states.
• Orica (ORI) -9.78% today said net profit for the year through September slipped almost 1% to $386.2m over the 12 months through September, slightly below expectations of $390m.Earnings before interest and tax also slipped 1%, to $635m, missing expectations of $653m. Orica said it faced increases in material costs that couldn’t be recovered from existing contracts, particularly for natural gas and ammonia. Final dividend of 28c up 4% on last years.
• Vicinity Centres (VCX) +0.37% and Singapore’s sovereign wealth fund GIC have agreed to swap assets worth a combined $1.1 billion in the biggest retail property deal of the year. The groups will exchange a 49% stake in Vicinity’s Chatswood Chase in Sydney, worth $562.3m, for a 50% stake in GIC’s Queen Victoria Building, The Galleries and The Strand Arcade, worth $556m.
• Fairfax (FXJ) +0.90% received Federal Court approval for the separation of Domain.
• McGrath Real Estate (MEA) -15.57% McGrath forecast its earnings will be between 20% and 25% lower than Bell Potter’s estimate of $16.6m due to high restructuring charges and cost savings. McGrath said it planned to remove about $5m of annualised costs from the business at a one-time restructuring cost of between $1.4m and $1.6m.

ECONOMIC NEWS

• The ABS has today released new Consumer Price Index (CPI) weights that will be used to compile the CPI from the December quarter 2017, which is due for release on 31 January 2018. “The 17th series CPI weights show metropolitan households continue to spend the greatest proportion of their expenditure on Housing (22.7%), followed by Food and non-alcoholic beverages (16.1%) and Recreation and culture (12.7%).” In dollar terms, the largest increase in household expenditure was in service related industries. Expenditure on child care (127.1 %), international holiday travel and accommodation (59.9%) and education (55.8%) have all seen significant increases.

BOND MARKET

ASIAN MARKETS

• Qatar Airways agreed to acquire a 9.6% stake in Cathay Pacific Airways Ltd from Hong Kong-based Kingboard Chemical Holdings Ltd. and related companies for HK$5.16 billion (US$662 million). The first ever investment by a Middle Eastern airline in an East Asian carrier.
• China’s shadow banking sector, estimated by some analysts to be worth 122.8 trillion yuan (US$18.5 trillion), stopped growing in the first half of the year as issuance of wealth management products declined, according to Moody’s.

• Chinese central bank governor Zhou Xiaochuan wrote of “hidden, complex, sudden, contagious and hazardous,” latent risks in an article over the weekend. Zhou is widely expected to retire after a ten-year stint.
• Japanese PMI hits 2-year high.

EUROPE AND US MORNING HEADLINES

The Trump tour continues with Japanese car makers in his sights. US not winning on trade balance. “Try building your cars in the United States instead of shipping them over. That’s not too much to ask,” Trump said. “Is that rude to ask?” He has a point. Japan’s biggest auto trade association says that 75% of Japanese-brand vehicles sold in the U.S. are built in North America. Japanese companies currently employ around 850,000 U.S. workers

• Qualcomm is preparing to fend off an unsolicited US$100bn takeover bid from Broadcom arguing it undervalues the company. Broadcom is preparing a US$70-a-share offer for Qualcomm.
• US Stocks are trading at levels only previously reached in the run-up to Black Tuesday and the tech collapse of 2000 according to some commentators.

• The long-awaited listing of Saudi Arabia’s Aramco could be delayed as the new wave of anti-corruption initiatives in the Gulf state has an impact. Currently both the LSE and the NYSE are vying for the honour.
• Not just an ASX thing it seems as in the UK hedge funds have sold short the big three retailers there too. More than GBP1bn of shorts against Marks & Spencer, Next and Debenhams. Around 12% of M&S’s stock is currently shorted, worth around GBP643m. A year ago, the figure was less than 5%. Meanwhile, short sellers sold 9% of Debenhams, having been short just 2% a year ago. The shorted shares are worth around GBP46m. Traditional retailers continue to struggle badly.
• Melbourne Cup tip Johannes Vermeer.

• And finally, in a UK NBN style issue, angry villagers upset over slow broadband speeds have burnt an effigy of BT Openreach van. Guy Fawkes night fun and games.

 

And finally again………………

 

A man entered the golf pro shop and looked all around, frowning. After watching him for a bit, the pro asked him what he wanted.

“I can’t find any green golf balls,” the man replied.

“Well, I don’t think they make them, but I can check,” the pro said.

The pro looked all over the shop, through all the catalogs, even called all the ball manufacturers. Sure enough, no one makes green golf balls.

As the man walked out the door, the pro asked him, “Before you go, could you tell me why you would want green golf balls?”

“Because they’d be so much easier to find in the sand traps!” he exclaimed.

 

I was sat with my wife while she sipped on her glass of wine, when she said, “I love you so much, you know. I don’t know how I could ever live without you.” I said, “Is that you or the wine talking?” She said, “It’s me talking to the wine.

Clarence 

XXX