Today’s Headlines

• ASX 200 drops 58 to 6228 on thin trade.
• High 6281 Low 6225.
• Back from holidays and grumpy.
• Banks hit hard by front page headlines on margins.
• Resources weaken as trade and currency wars loom.
• Oil was a bright spot as Trump threatens Iran.
• AUD slips to 74.21c.
• Bitcoin firms a little to US$7657.
• Aussie Gold steady at $1659.
• US futures plus 7.
• Asian markets mixed with Japan down 0.36% and China up 0.66%.

STOCK STUFF

Movers and Shakers

• APT +4.6% must pause soon surely?
• LYC +5.9% substantial shareholder in Challenger.
• MSB +2.8% biotechs in demand.
• MYX +2.3% US drug acquisition.
• NUF -11.1% drought bites sector. GNC -3.4% ELD -5.6% suffer too.
• IPL -3.4% fertilisers suffer on drought.
• HUB -6.5% profit taking and Westpac cutting platform fees.
• PPS -9.2% more profit taking on platform fees..
• MOC +8.9% thin volume.
• BHP -1.4% to defend class action from 3000 shareholders.
• WBC -0.9% cuts to platform pricing.
• CVN +9.1% drawing strength.
• TCL -1.1% bids for WestConnex with conditions.
• NWL -11.1% dream is over.
• WSA -2.1% production numbers.
• Speculative stock of the day: Antilles Oil and Gas announced it had exercised an option to acquire an aged care technology company HomeStay. HomeStay has developed an Internet of Things platform, providing technology-enabled care to the aged care industry. HomeStay’s Intelligent Home integrates artificial intelligence and wearables through the HomeStay Hub. The company will change its name to HomeStay Care Limited in due course.
• Biggest risers – LYC, NEA, APT, MSB and MYX.
• Biggest fallers – NUF, NWL, WGX, HUB, ELD and IFL.

POINTS

TODAY

• Wesfarmers (WES) -1.3% Demerger of Coles expected to be completed in November 2018, subject to shareholder and other approvals. Eligible shareholders will receive one Coles share for every Wesfarmers share held on the applicable record date. Wesfarmers to retain 15% of Coles and 50%of flybys. Post-demerger, Coles is expected to have net debt of approximately $2.0bn. In addition, Coles will have operating lease commitments of approximately $9.6 billion with a weighted average lease expiry of approximately 6.5 years. Coles is expected to deliver a dividend payout ratio ranging from 80% to 90% while enabling Coles to retain strategic flexibility
• Newcrest Mining (NCM) –0.7% Has extended its project generation alliance with Encounter Resources (ENR) for a further 12 months. This comes after the last 12 months of the alliance produced 5 new joint ventures.
• Nufarm (NUF) –11.1% Dry weather has impacted the companies ANZ business and it has issued a profit downgrade. FY18 EBIT from the ANZ business is now to be around $5m-$10m from $51.6m. The group FY18 EBIT is now expected to be around $255m-$270m.
• Estia Health (EHE) –1.9% The new CEO and MD will be previous COO Ian Thorley when current CEO Norah Barlow steps down in November.
• Sino Gas & Energy (SEH) –2.2% Q2 activities report. Gross production averaged 24MMscf/d remaining on track to the FY18 guidance which the company reiterated. The company also said it has met 2 key conditions of its acquisition by Lone Star and continues to work towards its completion.
• Transurban (TCL) –1.1% Has submitted a bid for 51% of the NSW WestConnex project. The bid is subject to approval of the ACCC and FIRB but TCL says its confident it will obtain the necessary approvals.
• Vicinity Centres (VCX) –1.5% After re-evaluation of the group’s 74 directly owned retail properties a $147m or 0.9% gain was realised over the last 6 months. Combine this with 1H’s valuations and the FY18 net gain from the portfolio is $555m or 3.6%. VCX will also be extending its on market buy back program another 12 months with up to another 5% of its shares able to be acquired.
• Mayne Pharma (MYX) +2.3% Has acquired generic Efudex® (fluorouracil cream 5%) from Spear Pharmaceuticals, Inc. (“Spear”) for up to US$30.0m. Comprising US$16.0m in cash and US$4.0m in Mayne Pharma equity plus contingent payments of up to US$10.0m. Generic Efudex has a strong strategic fit with Mayne Pharma’s portfolio of generic and branded dermatology products and will be supported by our existing dermatology commercial capability across sales and marketing, customer service and medical affairs. Importantly, the acquisition is expected to be immediately EPS accretive with modest incremental EBITDA in FY19.
• Navitas (NVT) -2.1% Has signed an agreement with the University of Twente in the Netherlands, to take over its pathway program for international students. The college will commence teaching in September 2019. The agreement is for a 5-year period. The University of Twente is a public research university located in Enschede, The Netherlands. It is recognised as among the world’s best universities in fields such as nanotechnology, engineering, IT, robotics and geo-information science.
• BHP Billiton (BHP) –1.4% Has been served with a class action in the Federal Court in Victoria over the Samarco Dam failure. It says it will fight the allegations which are being brought against them, representing over 3000 people.

ECONOMIC NEWS

• Nothing today.

BOND MARKETS

ASIAN MARKET NEWS

• BoJ offers unlimited bond buying. Yen rallies. Equities fall.
• The offshore yuan rose 0.1% to 6.7747 USD.
• The Chinese Premier has ordered a probe into vaccine makers, following issues with a local manufacturer fabricating production and inspection data on a rabies vaccine. Potential implications for CSL.
• As trade wars loom, these are the big US sellers in China.

• The PBoC injected Rmb502bn ($74bn) of cash into the banking system on Monday morning through loans to commercial banks, the latest sign that policymakers are moving to ease monetary policy as the economy slows slightly.

EUROPEAN AND US HEADLINES

And finally……………..

After church one Sunday, one of the church goers walked up to his priest and said, “Father, is it a sin to play golf on Sundays?”

“My son,” said the priest, putting his hand on the man’s shoulder, “I’ve seen your golf game, it’s a sin any day.”

 

 

The weird thing about Trump’s Presidency is that I now actually hope that there is a shadowy cabal deep within the US government dedicated to undermining the democratically elected leader

Clarence

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