Today’s Headlines

• ASX 200 rebounds from 100 down to close down 59 at 5837
• High 5889 Low 5796. Rumours of resource sell portfolio.
• Banks and big miners lead the rout.
• Big Bank Basket now $143.40
• Broad based selling although some bargain hunting appearing.
• AUD firms to 71.03c
• Bitcoin firms to US$6208
• Aussie Gold firms to $1719.
• US futures More tariffs coming?
• Asian markets weaker with Japan down 1.39% and CSI 300 up 0.85%.

STOCK STUFF

• SDA +3.7% finally cheap enough to attract some buyers.
• STO +2.90% gas processing deal.
• TPM +1.04% ex dividend.
• CUV +5.76% thin volume.
• VOC +2.25% defensive telcos rise.
• DHG -4.69% broker downgrade.
• APT -6.64% dentist deal fails to bring a smile.
• NEC -1.36% SWM -2.92% media stocks under pressure on ad weakness.
• SYR -3.77% change of directors’ interest.
• NUF +1.71% rights issue pressure abates.
• CGC -3.83% blueberries on special.
• EDE +21.21% continuing to find favour after latest announcement from the US.
• AJL +6.08% Bowland hydraulic stimulation commences.
• MUA +0.84% strong 3Q revenue and EBITDA.
• OEL -25.30% negative drill report on Big Tex exploration well.
• BYE -6.67% drill rig contract executed for SM74.
• AVH -8.70% Medical education symposium and presentation.
• PPS –6.25% platform surpasses $8.5bn FUA.
• Speculative stock of the day: Biotron (BIT) –52.94% Keeps on giving following the news from its HIV BIT 225 trial. Big volume again. Day traders special.
• Biggest risers – AMI, CUV, JMS, SDA, STO and SGM.
• Biggest fallers – APT, DHG, REA, CSR, MAH and CGC.

TODAY

• Wesfarmers (WES) –0.32% 1Q Retail sales results. Total Sales for the quarter up 5% compared to the same period last year. Supermarkets saw the biggest growth in sales, up 5.8%, with increases in basket size, transaction numbers and units sold. Liquor and Convenience sales saw growth of 2.1% and 2.5% respectively. Managing Director Rob Scott stated that the results reflect Coles’ momentum, driven by the ‘Little Shop’ campaign as well as improved in-store execution and Flybuys promotions investment. The company’s focus will remain on in-store execution short-term, and they will continue to report quarterly, subject to the demerger approval.
• Santos (STO)+2.90% and Beach Energy (BPT) -1.40% have signed Gas Processing and Tie-In Agreements with Real Energy (RLE). The agreement will cover the Santos-operated gas gathering network in the Cooper Basin and gas processing at Moomba Facilities, while the Gas processing agreement will allow raw gas from Real Energy’s Windorah Gas Project to be processed into sales gas that can be immediately sold to commercial and industrial customers on the Australian East Coast. The deal is a major step in the commercialisation of Real Energy’s Windorah Gas Project, removing the need to build costly gas processing and transportation infrastructure.
• Evolution Mining (EVN) –1.33% Quarterly Report. September 2018 gold production down 1.01% from June to 200,218 ounces. The All-in Sustaining Cost (AISC) of gold rose by 4.6% to $885/oz, while the All-in Cost (AIC) dropped 0.80% to $1,121/oz. The quarter also saw group operating mine cash flow and group production fall 11.27% and 0.99% respectively. The C1 Cash Cost rose 19% to $594/oz.
• Michael Hill International (MHJ) –27.47% Trading update. Group revenue down 8.8% for the 3 months to 30 September 2018 with same store sales down by 11.0%. The fall is partly thanks to the company underestimating the marketing and promotional activities required to support the change in strategy away from discount-based pricing. Gross Margin lifted from 63.1% to 64.6% for the quarter. E-commerce sales rose by 84.9% to $3.4m, representing 3.0% of the group’s total sales. The company will continue to focus on e-commerce and improving overall customer experience.
• APN Outdoor (APO) –unchanged – Have announced that the scheme of arrangement under which JCDecaux SA will acquire 100% of the issued share capital of the company has been approved by shareholders at the shareholders meeting this morning. In accordance with the scheme shareholders will receive a special dividend of 30c for each share held on the special dividend record date and a 640c cash consideration for each share held on the scheme record date.
• Cooper Energy (COE) –2.15% Quarterly report. The 3 months to 30 September 2018 saw quarterly production up 6% for the quarter to 0.37m boe and quarterly revenue up 7% on the prior quarter to 21.8m. The Sole Gas project is proceeding as planned with 74% complete at September 30. The company also sealed new gas contracts with Casino Henry gas fully contracted for CY19 following a competitive tender.
• Praemium (PPS) –6.25% Platform update. Funds under administration rose 29% over the past 12 months, up to $8.6bn. Combined quarterly inflows of $645m, the fifth highest on record, with Australian gross inflows contributing $466m. The company was also named ‘International Platform of the Year’ at the International Advisor Global Services awards 2018 in London.

ECONOMIC NEWS

• Bank of America Merrill Lynch’s head of G10 foreign exchange strategy, Thanos Vamvakidis, has forecast the AUD could hit 84c by the end of 2019. Jousting sticks anyone?
• The AMP is no longer lending to investors with more than five properties on new loans. The bank is also restricting lending on other property portfolios as it looks to increase its loan quality and risk profile in the current housing downturn.

• As of the end of September the value of Australian ETFs was greater than the LIC sector. The ETF market had a market capitalisation of $42.29bn compared to the long established LIC sector’s market capitalisation of $42.23bn.

BOND MARKETS

ASIAN NEWS

• The PBoC has said it is considering a number of options for its currency policy. The governor Yi Gang was speaking at the IMF ‘gabfest’ in Bali and said the currency was at a ‘reasonable and equilibrium’ level.

EUROPEAN AND US HEADLINES

• Trump has used his appearance on ’60 Minutes’ on US TV to threaten yet more sanctions for China.
• The Saudis are continuing to deny any involvement in the disappearance of Saudi dissident journalist Jamal Khashoggi. Larry Kudlow, Trump’s economic adviser has warned of ‘serious action’ if the Kingdom is found to be responsible for his death or disappearance.
• The world’s largest fund manager has said the Fed could turn the ‘hot’ economy to ‘mediocre’ if it continues to raise rates at an aggressive level.
• More stalemate in Brexit negotiations with UK PM May rejecting the latest draft from the EU.
• The one constant in German and EU politics looks to be on her way out as Angela Merkel’s CSU vote collapses to 36.2% while Greens surge to 18.1%, according to projections in Bavaria. The Greens look to have secured  up to 19% of the vote and will overtake the CDU as the second biggest party and potential partner for the CSU. At least in Bavaria.
• Abbvie Inc said on Thursday it settled all patent disputes with Novartis AG, granting it a non-exclusive license to manufacture and sell a copycat version of blockbuster drug, Humira. Humira is the world’s best-selling prescription medicine and has long buoyed AbbVie’s business, giving it US$5.19bn in second-quarter sales. Humira treats severe rheumatoid arthritis in adults.
• In the UK, GDP forecasts have been downgraded for the seond quarter in a row. EY now expects 1.3% growth in 2018 after a 1.6% initially then 1.4% forecast. 2019 forecasts are for 1.5% down from an earlier 1.7%.

And finally……………

A couple were Christmas shopping.

The shopping centre was packed and as Margaret walked through one of the malls

she was surprised when she looked around to find that Andrew was nowhere to be seen.

She was quite upset because they had a lot to do and she became so worried that she called him on her mobile phone to ask him where he was.

In a quiet voice Andrew said, “Do you remember the Michael Hill shop we went into about five years ago where you fell in love with that diamond necklace that we couldn’t afford,

and I told you that I would get it for you one day?”

Margaret choked up and started to cry and said, “Yes, I do remember that shop.”

Andrew replied, “Well, I’m in the bar next door.”

 

 

Clarence

XXX