- ASX 200 up 19 to 6135.
- High 6135.5 Low 6109.
- Banks steady and weighed by ex-dividends.
- Resources once again leading us higher.
- Metals and mining index at a 6-year high.
- Energy firm. Telcos weak.
- TLS slumps on earnings downgrade.
- AUD higher at 75.52c
- Bitcoin slips to US$8391
- AUD Gold $1320 unchanged
- US futures up 129
- Asian markets firmer with Japan up 0.58% and China up 087%. Malaysia has roller coaster up 0.43%
Movers and Shakers
- LYC -9.56% media reports on issues with LAMP in Malaysia
- TWE -4.17% broker downgrade.
- AMP +3.22% Moody’s consider credit profile.
- TLS -5.00% profit downgrade. Reaffirms dividend.
- NWS -6.22% bad night in the US on results.
- GWA +5.65% sale of door business.
- ED1 +8.40% first day as a listed company.
- HSO +4.45% gets another bid from PE.
- LOV +3.65% broker upgrade.
- MLX -3.74% profit taking on lower copper prices.
- LNK -2.72% broker downgrades on budget changes.
- QAN +2.78% lower oil price.
- GNC +1.55% broker upgrade.
- CUV -3.33% regulatory update.
- SFH +57.89% sells businesses to NBL -%
- BLA -3.25% director resignation.
- MXI -15.94% earnings downgrade.
- PNV -4.85% shining brightly.
- Speculative stock of the day: Titomic (TTT) +19.41% after signing a MoU with Italian shipbuilder Fincantieri Australia to evaluate the use of Titomic Kinetic Fusion in the shipbuilding process. First of its kind and another tick in the box for TTT.
- Biggest risers –ED1, EHL, GWA, ELD, MOE, and HSO.
- Biggest fallers –.
- Elders (ELD) +3.7% NPAT up 8% to $41.4m. Underlying earnings before interest and tax (EBIT) of $45.7 million were driven by continued strong performance in the retail business and additional earnings through bolt-on acquisitions. The outlook is mixed due to weather conditions. “Continued momentum and growth is likely in the banking and livestock funding products, which will contribute to the Financial Services margin.” “Continued dry conditions will allow feedlot utilisation to remain at high levels, but will also increase feed costs at the Killara feedlot.”
- Telstra (TLS) -5.00% re-affirmed guidance consistent with its FY18 guidance. However, EBITDA is expected to be at the bottom end of the range and free cashflow is expected to be at the top end to moderately above. The challenging trading conditions in FY18 are expected to continue in FY19, including ongoing pressure on mobile and fixed ARPUs and the accelerating impact of the NBN. Telstra also reaffirmed it expects its FY18 total dividend to be 22 cents per share fully franked including ordinary and special, in accordance with its dividend policy announced in August 2017 and its capital management framework.
- Healthscope (HSO) +4.45% Has received a non-binding proposal from Brookfield at 250c cash. Two bidders now in contention though Brookfield is behind the 8 ball given Australian Super who are involved in the BGH bid has 14% of HSO.
- Commonwealth Bank of Australia (CBA) +0.38% chief financial officer Rob Jesudason has resigned “to pursue an external role in Hong Kong”, the bank announced. Alan Docherty has been appointed acting CFO. Not a great look but the incoming CFO is very experienced with a career at CBA since 2003.
- Praemium (PPS) – 1.37% Current CEO, Michael Ohanessian has been reappointed to the board as managing director.
- GWA Group (GWA) +5.65% has sold off its Door & Access business to focus on greater performing areas of its overall business. The sale was for $107m all up and is expected to be completed after FY18’s end.
- AusNet Services (AST) -1.15% results – Outlook statement. AusNet Services expects continued growth in its regulated asset base of around 3.5% per annum to FY2021. In addition, net debt to regulated and contracted asset base is expected to remain below 70% to FY2021.
- Nextdc (NXT) +0.27% Update on legal proceedings with Asia Pacific Data Centre Group (APDC). NXT has offered APDC access to the properties involved in the dispute to enable an independent valuation. It concludes “NEXTDC is resolute in its view that APDC is not operated with sound governance practices and as such it remains appropriate that the vehicle be wound up. Accordingly, the Company continues to proceed with its proposal to wind up the APDC Trust and related court proceedings.”
- Seven Group Holdings (SVW) +1.88% The company has upgraded its FY18 guidance with EBIT now expected to be around 20% to 25% higher than the $376.9m last year.
- Nothing significant today
BOND MARKET UPDATE
ASIAN MARKETS NEWS
- Xerox calls off US$6.1bn sale to Fujifilm
- Donald Trump has waded into a row over Chinese telecoms equipment maker ZTE, promising to get the firm “back into business fast” after it was hit by a ban on buying American hardware and software. The order followed US$1.2bn of fines against the company last year after it was found to have breached trade embargoes against Iran and North Korea
EUROPE AND US MORNING HEADLINES
- Italy close to forming a government. So close.
- UK shoppers still not spending. A report shows 2% drop in retail sales in April, same as March. Spending in stores, as opposed to online declined 5.4%,the quickest pace in six years.
- 321 days to separation. Brexit that is. Still no clarity or plan really.
A guy broke into my apartment last week.
He didn’t take my TV, just the remote.
Now he drives by and changes the channels.
A truckie walks into an outback cafe with a full-grown emu behind him.
The waitress asks them for their orders.
The truckie says, ‘A hamburger, chips and a coke,’ and turns to the emu, ‘What’s yours?’ – ‘Sounds great, the same,’ says the emu.
A short time later the waitress returns with the order ‘That will be $9.40 please,’ and he reaches into his pocket and pulls out the exact change and pays.
The next day, the man and the emu come again and he says, ‘A burger, chips and a coke.’ – ‘Sounds great, I’ll have the same,’ says the emu.
Again the truckie reaches into his pocket and pays with exact change.
This becomes routine until the two enter again. ‘The usual?’ asks the waitress.
‘No, it’s Friday night, so I’ll have a steak, baked potato and a salad,’ says the man. ‘Brilliant idea, same for me,’ says the emu.
Shortly the waitress brings the order and says, ‘That will be $32.60’
Once again the man pulls the exact change out of his pocket and places it on the table.
The waitress cannot hold back any longer. ‘Excuse me mate, how do you manage to always pull the exact change from your pocket every time?’
‘Well, love’ says the truckie, ‘a few years ago, I was cleaning out the back shed, and found an old lamp. When I cleaned it, a Genie appeared and offered me two wishes.
My first wish was that if I ever had to pay for anything, I would just put my hand in my pocket and the right amount of money would always be there.’
‘That’s brilliant!’ says the waitress. ‘Most people would ask for a million dollars or something, but you’ll always be as rich as you want, for as long as you live!’
‘That’s right. Whether it’s a carton of milk or a new car, the exact money is always there,’ says the man.
Still curious the waitress asks, ‘What’s with the bloody emu?’
The truckie pauses, sighs, and answers, ‘My second wish was for a tall bird with a big arse and long legs, who agrees with everything I say.
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