Today’s Headlines

• ASX 200 up 26 to 6172.
• High 6195 Low 6153. Modest volumes.
• Lower AUD spurs broad rally.
• Banks rebound as BOQ reports.
• Resources in focus again.
• AWC huge rise on alumina supply concerns.
• Utilities weigh. Energy in demand.
• AUD weaker at 70.87c
• Bitcoin firms to US$6565
• Aussie Gold positive at $1688.
• US futures down 83.
• Asian markets weaker with Japan down 0.74%. HK -1.83%

STOCK STUFF

• AWC +10.75% supply issues in South America.
• S32 +7.32% on alumina price rise.
• CKF +5.56% ring those taco Bells.
• GXY +4.48% shorts still covering.
• CVN +8.14% oil price rise. Time to take profits?
• MFG +7.82% management chages.
• PGH -8.00% selling continues no bottom in sight.
• OFX -4.12% profit-taking.
• BKL -3.24% selling continues.
• SBM -3.87% production update.
• SYR -7.30% fire halts production for five weeks.
• SCP -1.27% returns to trade following acquisition and capital raising.
• TPW +9.71% ceasing to be substantial shareholder.
• AJM +6.25% maiden shipment of lithium.
• FLT -1.86% sell off continues.
• VHT +15.22% broker comments.
• CIM +1.46% wins $110m project in India.
• VRT -unchanged- completed debt refunding.
• JIN +4.39% straight line march.
• BHP +0.94% update on Samarco settlements.
• WGN +2.71% thin volume.
• ORG +1.54% playing catch up.
• Speculative stock of the day: No stand out today. BIT -21.60% as profit taking sets in
• Biggest risers – AWC, CVN, MFG, S32, SEA, CKF and MSB
• Biggest fallers – PGH, KGN, SYR, A2M, OFX and WEB

TODAY

• Suncorp Group (SUN) +1.34% To hold EGM on the 13^th of December to seek approval for a pro-rata return of capital and share consolidation following the sale of its Australian life business.
• Collins Foods Limited (CKF) +5.56% Has entered into an agreement with Taco Bell (a subsidiary of ‘Yum! Brands Inc.’) to roll-out more than 50 Taco Bell restaurants across Australia between the 1^st of January 2018 and the 31^st of December 2021.
• Bank of Queensland (BOQ) +2.23% FY18 results. Net profit down 5% to $336m, revenue up 2% to $1.12bn and cash earnings were 2% lower to $372m, partly due to a 3% growth in operating expenses over the year. Net interest margin widened 5 basis points to 1.98% offsetting a 17% fall in non-interest income over the year. BOQ’s CET1 ratio moved down 8 basis points to 9.31%. A final dividend of 38c was declared.
• BHP Billiton (BHP) +0.94% Confirms agreement with Brazilian state prosecutor over Samarco dam failure. BHP said the deal outlines the process for compensation to the people in Mariana, Minas Gerais. The miner also added that the Renova foundation has been providing compensation and support to many of the individuals in Mariana who were impacted by the dam failure on the 5th of November 2015.
• Macmahon Holdings (MAH) – Has reached a deal to settle class action proceedings that commenced against the company in 2015 regarding market disclosures related to a construction project in 2012. MAH notes that settlement is without admission of liability. The impact will be recorded in as a one-off $6.7m charge to its income statement for FY19, and is excluded from the underlying FY19 EBIT guidance of $70 – $80 million on revenue of $950 – $1,050 million.
• Magellan Financial (MFG) +7.82% Confirmed ahead of its AGM that Hamish Douglass will step down as CEO and become chairman, swapping roles with current chairman Brett Cairns. Assets under management declined slightly in September from $74.6 billion to $74.5 billion.

ECONOMIC NEWS

August Highlights (ABS)

BALANCE ON GOODS AND SERVICES

• In trend terms, the balance on goods and services was a surplus of $1,716m in August 2018, an increase of $121m on the surplus in July 2018.
• In seasonally adjusted terms, the balance on goods and services was a surplus of $1,604m in August 2018, an increase of $56m on the surplus in July 2018.

CREDITS (EXPORTS OF GOODS AND SERVICES)

• In seasonally adjusted terms, goods and services credits rose $185m (1%) to $36,562m. Non-monetary gold rose $228m (13%) and rural goods rose $134m (3%). Non-rural goods fell $222m (1%). Net exports of goods under merchanting remained steady at $18m. Services credits rose $45m (1%).

DEBITS (IMPORTS OF GOODS AND SERVICES)

• In seasonally adjusted terms, goods and services debits rose $130m to $34,958m. Capital goods rose $569m (9%) and consumption goods rose $32m. Non-monetary gold fell $289m (41%) and intermediate and other merchandise goods fell $264m (2%). Services debits rose $83m (1%).

• PIMCO has warned of another 10% fall to come in local property prices. “The probability of a market-moving agency downgrade that causes major banks to lose their AA- rating for the first time in history is now higher than before.’

BOND MARKETS

ASIAN MARKET NEWS

• The Ex-PM of Malaysia’s wife has been charged with money laundering.
• BHP says copper demand will surge due to China’s global ambitions. BHP has estimated that China’s “belt and road initiative” will generate spending of around US$1.3 trillion on infrastructure projects by 2023, driving an additional 1.6m tonnes of copper demand. This is equivalent to adding another 7% to global demand. BHP’s data suggest that belt-and-road countries use just 1.35kg of copper per capita, as opposed to the global average of 4kg. This suggests there is scope for demand in these areas to rise sharply.
• JP Morgan has downgraded its country weighting for China from overweight to neutral. JP Morgan revised its forecast for economic growth in China next year to 6.1% from 6.2%. Without accounting for countermeasures, the trade war represents a 1% dent to growth, the strategists said.
• China may be closed this week, but the HK stock market is open though investors probably wishes it was on holiday too. Heavy falls as yuan slides too.

EUROPEAN AND US HEADLINES

• The clock is ticking on Brett Kavanaugh nomination.
• Paris is shaping up as the alternative City of London as Nomura joins with others in setting up a French office on Brexit fears.
• The world’s most expensive whisky has sold at Bonhams in Edinburgh for GBP848,000. Macallan Valerio Adami. Only 12 bottles were produced from whisky stored for sixty years from 1926.
• The PM on the UK PM performance kicks off. Dancing Queen or Take a chance on me? Or SOS maybe?

And finally…………

My wife had a bad habit of biting her nails but I cured her. I hid her teeth.

Show me a man who lost all his money and can still laugh and I’ll show you an idiot.

As my father used to say: “Never cry over spilt milk. It could have been whiskey.”

You can lead a horse to water but teach him to lie on his back and float and you’ve got something.

My wife complained that her feet hurt. I said: “You’ve got your shoes on the wrong feet.” She said: “But these are the only feet I’ve got.”

 

Clarence

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