Today’s Headlines

• ASX 200 closes up 27 to 6012, up 30 for May.
• High 6024 Low 5995.
• Narrow trading range. Modest volumes.
• Month end moves and MSCI rebalancing.
• Capex disappoints but Chinese PMI cheers.
• Resources and energy stocks lead bounce higher.
• Unibail begins trade.
• Banks still under pressure CBA the stand out.
• AUD stronger at 75.61c
• Bitcoin steady at US$7468
• AUD Gold steady at $1303.
• US futures down 12.
• Asian markets bounce hard with Japan up 1.00% and China CSI 300 up 1.77%

STOCK STUFF

Movers and Shakers

• MYO -8.17% RKN -8.23% takeover off.
• XRO +1.92% winner.
• NEC +6.17% still the one.
• VOC +4.33% shorts covering.
• HUB -6.26% profit taking.
• LOV -3.02% profit taking.
• SEH +11.90% takeover approach from Lone Star.
• CMP +75.61% signs major partnership deal with China’s Health 100.
• BAL +5.99% Norges Bank ceases to be substantial shareholder.
• RFG -7.34% bears back in control.
• AAC +1.61% officials admit issues with beef and wine into China.
• GXY +4.49% broker upgrades.
• WSA +4.32% nickel price rises.
• CSR -2.14% ex dividend.
• TLS +0.36% media talks divorce and separation.
• SGR -1.39% broker downgrades after guidance and investor day.
• AZJ +0.94% UK fund sells 2% at 433c
• Speculative stock of the day: Patrys (PAB) +17.07% PAT-DX1 targets and kills brain cancer cells according to the announcement today. Pre-clinical trials continuing.
• Biggest risers –NGI, NEC, BAL, APT, LEP, NHC and SIG.
• Biggest fallers –MYO, CVW< HUB, NWL, CLQ, IRI and PNI.

TODAY

• Sino Gas (SEH) +11.90% Private equity firm Lone Star to acquire 100% of Sino Gas’ issued share capital in an all-cash transaction via a scheme of arrangement. Shareholders in SEH will receive 25c per share, a 19% premium to the last closing price. The offer values the company at $529.7m.
• Mesoblast (MSB) +4.08% 3Q results out this morning. Cash reserves of US$59.5m and revenues increased to US$15.6m compared to US$1.8m.
• BWX +0.50% Macquarie Capital has been appointed to help the company evaluate the Management Buy Out from the CEO and CFO.
• MYOB (MYO) -8.17% The company announced it is not pushing ahead with its acquisition of RKN. Instead, MYO will proceed with its planned investment strategy. The process has taken too long, and further delays to the ACCC process are expected and may impact the trading outlook of RKN. MYO is now targeting 1m new subscribers by 2020.
• Amazon International will stop shipping goods to Australia from July as GST imposition bites. eBay and Alibaba are considering their options. Boost for local retailers.
• Santos (STO) +3.35% will invest more than $400m in its Arcadia gas development in Queensland’s Bowen Basin to boost its Gladstone LNG project.

ECONOMIC NEWS

• Disappointing CapEx numbers out this morning. Up 0.4% seasonally adjusted. Latest estimates fro 2017/18 $117.5bn
• Building CapEx -1.3% QoQ
• Mining CapEx estimates revised up by 7.4%. Resources sector picking up on the back of higher commodity prices.

ACTUAL EXPENDITURE (VOLUME TERMS)

• The trend volume estimate for total new capital expenditure rose by 0.5% in the March quarter 2018 while the seasonally adjusted estimate rose by 0.4%.
• The trend volume estimate for buildings and structures fell by 0.6% in the March quarter 2018 while the seasonally adjusted estimate fell by 1.3%.
• The trend volume estimate for equipment, plant and machinery rose by 1.9% in the March quarter 2018 while the seasonally adjusted estimate rose by 2.5%.

BOND MARKETS

ASIAN MARKETS NEWS

• Chinese Official Manufacturing PMI at 51.9 v 51.4 l. Highest since September 2017.

• Services PMI rises to 54.9 v 54.8 for April.
• SenseTime, a Chinese artificial intelligence developer, has raised US$620m in its second funding round in two months, valuing the company at US$4.5bn.

EUROPE AND US MORNING HEADLINES

• US regulators have begun easing back the Volcker rule, allowing banks to take on more risky trading operations. Champagne corks pop on the Street.
• French President Macron has called for WTO to reform trading rules as trade wars continue to escalate.
• Moody’s puts Italian banks under review on credit ratings. A total of 12 banks and 6 utility companies are on the list for a downgrade.
• Drone technology could add £42bn to the UK economy by 2030, by increasing productivity and creating value through data collections, according to new research from PwC.
• A UK hospital has launched a rehab program for the latest addiction. That of Bitcoin. It is a similar addiction to gambling and drug addictions.

 

And finally…..

 

A woman comes home and finds her husband in bed with a female midget. Furious, she screams, “You promised me you wouldn’t cheat on me again!”
The husband replies, “Darling, can’t you see I’m trying? I’ve cut down.”

For the podcast of this report click here

Clarence

XXX