Todays Highlights

• ASX 200 closes up 25 at 5830 with volatility fading.
• High 5828 Low 5790. Plenty of action in individual stocks.
• Window dressing at the close lifts market by 30 points.
• R’October ends a crazy month. Down 6.1% for the month.
• ANZ opens the season. Messy but becoming simpler.
• CTD craters.LOV finds some love.
• Miners slip as Chinese PMI below forecast.
• TLS back in the seller’s sights.
• AUD steady at 70.84c
• Bitcoin steady at US$6265
• Aussie Gold eases to $1718 as risk concerns fade.
• US futures rally up 39 points.
• Asian markets rally with US with Japan up 1.68% and China up 1.1%

STOCKS IN FOCUS

• QBE +2.35% announces some changes to operations.
• HSO +0.48% BGH increases stake. First strike against Dwyer and board.
• AMP +6.93% room for capital management helps buyers find enthusiasm.
• CSL -% some profit taking.
• BHP -% talks China. Where is the money?
• CTD -27.46%% fails to satisfy short sellers report.
• GMA +3.21% shrugs off profit fall
• MUA +6.25% LIFULL doing well in Japan.
• NHF +6.33% good update.
• LOV +11.97% brokers seize chance to buy.
• LYC +6.12% more positive news from Malaysia.
• SXY +6.58% bounces back from yesterdays loss.
• RWC +5.47% looking good on AGM comments.
• KGN -10.73% get trashed again.
• LVH -8.75% after downgrades.
• MSB +3.11% interest stirring in biotechs.
• ISX +21.74% on positive announcement on deposit taking.
• FLT -2.01% catches CTD cold.
• CUV +3.90% quarterly report.
• WTC -2.43% acquisition.
• Speculative stock of the day: Pointerra Limited (3DP) +200.00% after the company announced a string of recent sales to DaaS agreements to support 3D mapping. Big volume and could be the start of more sales and revenue.
• Biggest risers – LOV, AMP, COE, KMD, SXY and NHF
• Biggest fallers – CTD, TPM, SUL, EVN, EHE and AX1.

IN THE NEWS

• Australia and New Zealand Banking Group (ANZ) +1.05% FY18 Results. Bit of a mixed bag. The headline Cash NPAT beat consensus estimates at $6.49bn (vs $6.38bn) despite being down 5% YoY. Fully franked dividend held steady at 80c is a positive. CET1 ratio up 87bps from FY17 to 11.4%. Net Interest Margin (NIM) is a concern falling to 1.87% from 1.99% a year ago. CEO Shayne Elliott expects the ‘tough revenue growth environment’ to continue in Australian retail banking short term, but is confident the company is well positioned to take advantage of institutional growth opportunities in Asia and New Zealand.
• Commonwealth Bank (CBA) +1.57% Have announced their intention to sell asset management group, Colonial First State, to Japanese financial services group Mitsubishi UFJ Trust and Banking Corporation for a total cash consideration of $4.13bn. The sale will result in an increase of approximately $2.9bn in CET1 Capital, giving a pro-forma uplift of 60bps to the FY18 CET1 ratio.
• Coca-Cola (CCL) +2.59% Coca-Cola Amatil notes that parent, The Coca-Cola Company, records impairment charge of $205m related to PT Coca-Cola Bottling in Indonesia. CCA and TCCC jointly own the Coca-Cola bottling operations in Indonesia, 70.6% and 29.4% respectively. TCCC recognising an impairment does not mean that Amatil will require an impairment as the carrying value of Amatil and TCCC’s investment in CCBI is different due to the timing of those investments.
• Gemworth (GMA) +3.21% Underlying NPAT of $20.4m vs $40.5m a year ago. NPAT $19.6m vs $32.1m a year ago. FY18 guidance; GWP is expected to increase in FY18 remains unchanged. NEP is expected to decline by approximately 25-30% – remains unchanged. FY loss ratio is expected to be 50-55% vs previously guided 40-50%. Continues to target an ordinary dividend payout ratio range of 50-80% of underlying NPAT remains unchanged.
• NIB Holdings (NHF) +6.33% Upgrades FY19 guidance to at least $190m, up from $180m. The updated guidance is in response to further development of nib’s FY18 incurred claims for the 12-month period ending 30-Jun-18 combined with ongoing low claims activity for Q1 of FY19.
• Tassal Group (TGR) – Provides outlook at AGM. Forecasts increase in harvest production and sales in FY19. Prawn operations are ahead of the business case, with salmon margins forecast to increase in the short- to medium-term.
• WiseTech (WTC) –2.43% Acquires CargoIT I Skandinavien for A$1.8m with a further expected multi-year earn-out potential of A$1.8m. With annual revenue and EBITDA to the year ended 31-Aug-18 of A$2.0M and A$0.3M respectively, this transaction, while of strategic value, is not material. CargoIT offers customs management solutions along with freight forwarding, warehousing and transportation solutions in Sweden.
• Corporate Travel (CTD) –27.46% AGM today and the company has moved to counter the hedge fund report from VCGI Investments on issues surrounding the company. It has rejected the claims and says that VGI does not understand the travel industry. CTD has said there was a slight material impact on accounting changes by around $0.5m. Cash payment are primarily a timing issue and has rejected claims of poor revenue quality. It has rejected claims that the footprint is overstated. Together with the rejection statement the AGM address from the MD has offered guidance of YTD record client wins across the group. EBITDA in the range of $144m -$150m or 15-20% growth on pcp. Tracking at top end of guidance.
• AMP (AMP) +6.93% Have committed to returning majority of the net cash proceeds from the sale of their wealth and mature businesses back to shareholders. The company has also stated their intentions to remove $40m per annum of stranded costs by the end of FY2020, as well as off-set the financial impact of the unwinding distribution arrangements through revenue replacement and/or cost management.

ECONOMIC NEWS

The Consumer Price Index (CPI) rose 0.4% in the September quarter 2018, according to the latest ABS figures. This follows a rise of 0.4%t in the June quarter 2018.

Here is a more usual graphic from the ABS on the difference in capital city inflation.

Another interesting chart is the risers and fallers. Implications for telcos here perhaps.

BOND MARKETS

• 2-Year bonds yield 1.96% unchanged.
• 5-Year yields at 2.15% up 1bps
• 10-Years up 3bps to 2.61%

ASIAN MARKET NEWS

• China’s yuan hit another low.
• The manufacturing purchasing managers index fell to 50.2 this month, lower than forecast. Trade wars bite.

EUROPEAN AND US HEADLINES

• Nice chart showing the increased volatility in NASDAQ stocks against S&P stocks.

• Trump is attempting to change the 14th amendment to the US constitution to ban birthright citizenship. Worrying.
• Humans have wiped out 50% of the world’s animals in the last 50 years.

And finally…………..

Did you hear about the cheese factory explosion in France? There was nothing left but de brie.

I dreamed about drowning in an ocean made out of orange soda last night.

It took me a while to work out it was just a Fanta sea

Clarence

XXX