Monday 22nd October – Australian Market Wrap | Beeks Downunder-Because not all financial news is boring!

Today’s Headlines

ASX 200 down another 35 to 5905.
High 5940 Low 5888. Low volumes again.
Wentworth Falls.
Banks fail to find their feet after early sell off resumes.
Miners remain under pressure.
Bond proxies and utilities struggle.
Healthcare in the red.
FLT crash lands as WOR goes to market for cash.
AUD steady at 71.13c
Bitcoin steady at US$6411
Aussie Gold barely changed at $1726.
US futures up 54.
Asian markets higher as Japan creeps up 0.36% and China takes shoots up 4.88% after authorities move to prop up the market. Hong Kong up 2.52%.

STOCK STUFF

WSA +3.43% strong DFS result at Odysseus.
VAH +2.44% trading update.
TLS -0.32% eases again.
SYR +0.93% return to full production remains on track.
FMG +2.32 % continues to find bargain hunters.
APT +2.80% nice to see the bounce back.
LYC -5.33% political woes in Malaysia
HLO -4.93% travel stocks hit.
SLK +3.70% AGM presentation.
PHK +3.30% rally continues.
ALL -2.51% in the dog house.
CCV +16.98% settles class action.
PLS +5.10% interest increasing in lithium stocks.
BIT -12.07% profit taking as hype wears off.
SDA -3.47% sell off resumes.
BGL +14.71% presentation on new gold discovery.
VOC +2.90% top telco performer.
KDR +17.39% refinery update and updated mine scoping study.
Speculative stock of the day: Memphasys (MEM) +59.37% following a MOU signed with leading Swedish base male infertility and andrology centre. MEM is a bio separations company at a pivotal stage in commercial development of its sperm separation system.
Biggest risers – PLS, SPO, AIA, WSA and VOC.
Biggest fallers – FLT, PNI, NEA, WTC and HLO.

TODAY

Sealink (SLK) +3.70% AGM today. Pointing to 4% sales growth. Underlying NPAT down 7% however. Successful acquisition of Kingfisher Bay Resort Group on iconic Fraser Island (two resorts, touring and ferry operations). Final dividend of 8.0c in line with FY17. Total dividend of 14.5c share up 3.6% from 14.0cin FY17.
Mineral Resources (MIN) +1.19% Have entered into an agreement with BCI Minerals(BCI) +7.41%to acquire the Kumina Iron Ore Project. Completion of the acquisition is expected to occur before the end of 2018 and will see MIN pay $27m to BCI for the project. A further $4m will be paid upon the completion of the first export of iron ore, followed by an additional $4m 12 months later. The location of the project will allow the company to leverage its existing workforce and logistics supply chain in Pilbara.
Virgin Australia (VAH) +2.44% Have provided a profit upgrade, expecting that 1H FY19 underlying profit before tax will be at least 100m, representing an increase of at least 22% on pcp. The company has seen growth in first quarter revenue of 9.7% on pcp, exceeding expectations of 7% growth. Expected figures are inclusive of an estimated year-on-year fuel price increase of $88m.
G8 Education (GEM) –0.92% Announce the finalization of its debt refinancing process, securing a $450m senior secured bank facility (Senior Facility) with a syndicate of lenders, as well as a $100m subordinated syndicated debt facility (Junior Facility) with CBA serving as Mandated Lead Arranger and Sole Bookrunner.
HUB24 (HUB) –0.67% Quarterly update. A record $638m net inflows for the first quarter, up 19.3% on pcp. Funds under administration up 50.5% on Sept 2017 to $9.1bn. The company has held its position as the fastest growing platform provider on an annual basis both in percentage terms and as a ratio of net inflows to overall market share.
Event Hospitality and Entertainment (EVT) –0.64% Have announced the sale of its German cinema exhibition division, CineStar, to Vue International Bidco Plc for an upfront payment of €130m, and a variable consideration of up to €91.8m depending on German market admissions for the 2019 calendar year. The transaction is dependent on competition authority approval in Germany.
Flight Centre (FLT) – 9.98% AGM comments today have seen some disappointment and a serious sell down on thin volume. Market guidance with underlying PBT of between $140m- $150m for the half. This is 0%-7% growth. FY targeting $390m-$420m underlying PBT.
WorleyParsons (WOR) – Trading halt this morning as the company is rumoured to be raising around $3bn to fund an acquisition from Jacobs Engineering for $4.6bn. Involves the energy, chemical and resources divisions of Jacobs. Looks like the capital raising will be done around 1556c. Dar Group the largest shareholder at 26% appears to be supportive.
Cash Converters International (CCV) +16.98%The company has settled two class actions costing around $10.6m and costs of $5.8m The settlement will be funded from existing resources. The company has admitted no liability in the proceedings.

ECONOMIC NEWS

Sydney auctions in the spotlight as clearance rates hit 47% nationally and 44.5% in Sydney. Home prices are down 6.1% in Sydney. Melbourne down around 4.8%. AMP analyst Shane Oliver has cut his forecasts to a drop of 20% from peak to trough in housing.
According to one expert, almost 9% of mortgage holders have negative equity. The problem is concentrated among affordable homes, with properties owned by home owners with negative equity worth $522,000 on average.

BOND MARKETS

ASIAN MARKET NEWS

Chinese market on a roll as authorities step in to support market. Biggest jump since 2016.

EUROPEAN AND US HEADLINES

The governor of the Bank of England has warned that the growth of open-ended funds that promise investors instant liquidity despite holding potentially illiquid assets represented a “major new vulnerability” across the G20.
Theresa May once again in another cabinet revolt as her days appear again numbered. Has been said before but she has managed to cling on to the worse job in Westminster. The ultimate hospital pass.
London plans to have self-driving cabs on the streets of London by 2021.
Morgan Stanley sees inflation picking up. Core inflation in the so-called G-3 economies has risen to a 1.4% annual pace from a post-crisis low of 1.1% according to a new report from MS.