The Canberra Circus Continues
- ASX 200 down another 14 to 5829
- High 5857 Low 5819. Normal volumes.
- BlackRock says markets are like ‘Jenga’.
- Miners and energy stocks weigh as banks stabilise.
- Gold miners shine.
- Healthcare rosy-cheeked, as CSL rises.
- AUD back above 71c just at 71.04c
- Bitcoin steady at US$6415
- Aussie Gold firm at $1734.
- US futures down 80
- Asian markets reverse early losses as China rallies up 1.75% and Japan up 0.51%
- SUL -10.91% CEO retires and sales update. Gets cheaper.
- IVC 4.14% defensive play.
- BXB +3.27% broker upgrade
- MSB +2.17% expands partnership with JCR for skin disease.
- MGX +3.23% quarterly report
- WOR -6.55% back after capital raising.
- SXY -7.53% quarterly update.
- NUF -4.20% Bayer loses case in California, but damages cut.
- BAL -6.01% trading update.
- CRN +0.83% despite broker downgrade.
- TWE -4.07% sold off on BAL China update.Media reports of slowing wine sales.
- BIT -27.27% quarterly.
- AGL -0.91% potential 16% earnings hit from new energy measures.
- MAQ +3.11% investor presentation, tiny volume..
- TLS +0.64% picks Ericsson to build 5G infrastructure.
- SGP -2.31% MS downgrades outlook.
- CAT +17.35% promising sales update.
- MOC -1.93% AGM update.
- BFG +6.15%% market update.
- Speculative stock of the day: Imhealth (IHL) +46.67% following a medicinal cannabis licencing application from the Department of Health, Victoria.
- Biggest risers – RRL, SAR, ASL, IVC, AMI and PDL
- Biggest fallers – SUL, SXY, WOR, BAL, OMH and BOQ.
- Service Stream (SSM) –2.98% AGM and Q1 update. Group performance for Q1 has exceeded target, bolstering confidence of meeting outlook for the year. Expects outcome on the assessment of current acquisition opportunities within the next few months. MD says that EPS growth is subject to forecasted customer demand and excludes the impact of any capital management initiatives e.g. on-market buyback. Guidance for FY19 repeated.
- Iluka (ILU) –0.47% 3Q production report shows total mineral sands production of 312.2 kt vs year-ago 293.8 kt. Conditions for Iluka’s zircon and high-grade titanium dioxide products remained strong through the quarter, with sales volumes largely being limited by production rather than the market.
- Alesco (ALQ) +0.73% has completed a refinancing of its existing bank debt facilities by executing a series of new committed multi-currency bilateral revolving credit facilities totalling USD 300million. The new facilities will run three years and provide ALS the flexibility to cover the upcoming maturity of US Private Placement notes, as well as for acquisitions and general purposes.
- Mesoblast (MSB) +2.17% has expanded its partnership with Japanese firm JCR Pharmaceuticals Co. for wound healing in patients with Epidermolysis Bullosa (EB). Under the expanded License Agreement covering EB, Mesoblast has provided JCR with access to its broad patent portfolio for the use of mesenchymal stem cells in wound healing. Mesoblast will receive royalties on TEMCELL product sales for EB. More good news.
- Bellamy’s Australia (BAL) –6.01% AGM update this morning with a downgrade to forecast for the China facing business. Various indicators point to a slow down in cross-border formula growth. Seems that Step 1 and 2 have been most impacted. Increased local and global competition. The outlook statement pointed to growth at the lower end of the 0%-10% range. FY19 EBITDA margin to continue at 2H18 levels of 22-25% on a normalised basis, excluding any further write-downs for a brand upgrade. Additional revenue opportunity for the Chinese label business subject to SAMR registration (timing still unknown.Stronger performance in 2H19.
- Worleyparsons (WOR) –6.55% The Institutional Entitlement Offer, undertaken as part of the funding of the Jacobs ECR acquisition, has been successfully completed. Approximately $1.8bn of funds was raised at $15.56 a share, with an overall take-up rate of 82%. The new shares will rank equally with all existing shares. A Retail Entitlement Offer aiming to raise a further $1.1bn will open this coming Monday and close at 5pm (AEDT) on Wednesday, November 7th. The offer price will match the institutional placement at $15.56.
- Newcrest Mining (NCM) +2.90% Quarterly report. Gold production of 548koz, up 5% on September 2017 quarter, but down 14% from the June 2018 quarter. Copper production of 25kt, an increase from September 2017 and June 2018 of 49% and 24% respectively. Group AISC fell to $778/oz, a drop of $120 from the September 2017 AISC and $17 lower than the June 2018 number, while the group AISC margin of $441/oz is $35 higher than in September 2017, but $66 down on June 2018. The Cadia mill throughput rose 30% on the prior quarter. The company expects gold production to increase over the remainder of the year.
- Catapult Group (CAT) +17.35% Good progress announced today with an updated guidance of Elite Core revenue of between $86m-$88m implying growth of 17% to 20%. Underlying core EBITDA up between 37% – 63% and between $11m – $13m. In-line with The Group’s long-term guidance provided in March 2018 Catapult is on track to generate positive cash flow at the Group level by FY21. For the Prosumer business, CAT are confident the positive early signs around PLAYR will continue to drive sales momentum across FY19.
- Mortgage Choice (MOC) –1.93% AGM today. Chairman’s address notes cash NPAT of $23.4m, up 3.3% on FY17, and a total shareholder dividend of 18cps fully franked but points to a climate of legislative uncertainty and regulatory scrutiny, and resulting speculation about the future of the mortgage broking industry. Notes weak share price performance as a response to the uncertainty created by the Royal Commission.
- GPT Group (GPT) +1.97% September quarter operational update shows office occupancy at 97.5%, up from 96.6% at 30 June. Total centre comparable MAT growth of 3.4%, vs 2.3% at 30 June. Also issues an upgrade to guidance for 2018, now forecasting to deliver FFO per security growth and Distribution per security growth of 3.5% for the full year
- Treasury Wines (TWE) -4.07% Not an announcement but a couple of interesting articles this morning from AFR and The Australian about wine export numbers falling off. The stock is down 3.8% just before lunch.
- Figures from industry body Wine Australia released showed that exports to China from wine companies in Australia lifted by 24% to $1.06bn for the 12 months ended September 30.
ASIAN MARKET NEWS
- How things have changed. In Japan the market has fallen to a 13-month low.
- China has stopped a special approval process for new games in the worlds biggest market. It seems the ‘green channel’ for licencing has been closed for computer games. This has a potential major impact for companies like Tencent and NetEase.
- Expectations are being wound down for progress on trade detente between US and China at the G20 forum.
- The MSCI Asia has now lost 19% from its January peak.
EUROPEAN AND US HEADLINES
- Rising US manufacturing costs seem to be the theme from earnings season.
- EU rejects Italian Budget.
- Theresa May still under serious pressure on her leadership. Talk of medicines and essential supplies being a huge issue post Brexit.
- No surprise here. The Confederation of British Industry called for “immediate action” after its quarterly Industrial Trends Survey found that manufacturers’ worries about the impact of politics on exports over the next quarter were at their worst since immediately after the EU referendum in 2016.
- UK Budget looming. 29th October. Go bold or go Brexit.
- UK tax authorities investigating 171 footballers in tax crackdown.
- The law of unintended consequences strikes at US baseball caps during the World Series (yet only US teams involved)). 89% are made in China and are set to rise by 10% and thereafter 25% next year. MAGA hats rising too.
I never wanted to believe that my Dad was stealing from his job as a road worker. But when I got home, all the signs were there.