- ASX 200 closes up 22 to 5897 as banks rally on CBA.
- High 5897 Low 5845.
- US midterms the focus.
- CBA’s resilient results help steady sector.
- Banks and defensives shine. Miners sag.
- AUD firms on weaker USD and RBA comments 72.65c
- Bitcoin steady at US$6405.
- Aussie Gold weaker on higher AUD to $1692.
- US futures up 75 after Democrats take house as expected.
- Asian markets firm with Japan up 0.16% and China up 0.45%.
What’s Hot and What’s Not
STOCKS IN FOCUS
- WOR +10.45% Dar Group taking up rights and secures funding.
- SYR +8.71% new binding offtake agreement.
- MSB+3.76% doing well again.
- KDR +9.71% GXY +5.34% lithium stocks continue to rise.
- ILU +4.95% second tier miners starting to perform.
- WEB -6.57% ex entitlement. Insto offer success.
- PPH -4.87% investor presentation.
- AMP -2.21% BlackRock ceasing to be substantial shareholder.
- CSR -2.10% rally runs out of steam.
- 88E +26.32% operations update.
- CLQ +15.56% lithium rally.
- KGN -3.52% goes super with a partnership with Mercer.
- FNP +5.62% deal with Alibaba.
- BGA -0.33% takes the cash and accepts in CZZ bid.
- Speculative stock of the day: ADT +7.2% after approval for concession extension in Bosnia. Off its high but showing good signs of further moves higher.
- Biggest risers – WOR, KDR, SYR, GNE, ORE and FNP.
- Biggest fallers – YAL, WEB, PPH, OMH, FAR and SIG.
IN THE NEWS
- Commonwealth Bank (CBA) +0.58% Trading update. Not as good as the same quarter last year but not bad. First quarter unaudited net profit -13% to $2.45bn on the back of higher funding costs and home-loan price competition. Cash earnings at $2.50bn, which the bank said was up 11% on the quarterly average of the prior six months. Loan impairment expense for the quarter was $216m, troublesome and impaired assets increased to $6.6bn from $6.5bn. CBA’s CET1 ratio +82bps compared to Q4. Operating income was up 1% on the average of the last two quarters, and net interest income was flat.
- Kogan.com (KGN) -3.52%Together with Mercer has signed a deal to launch Kogan superfund.
- Webjet (WEB) -6.57% Completes institutional component of its entitlement offer, take-up rate of 97%.
- Suncorp (SUN) –1.21% Trading update.Total lending +0.5% or $265m over the quarter, home lending grew 0.8% or $361m and business lending was down 0.8% or $90m. Gross impaired assets remained stable at $140m. The bank’s CET1 ratio of 8.9% was in the upper range of its target. Pressure from price competition and funding costs are expected to result in a FY19net interest margin at the low end of the 1.80-1.90% target range.
- Magellan Financial (MFG) +2.49% Total FUM as at 31 October of $72.98bn, versus $74.55bn a month ago. Net inflows in the month of $322m; retail $73m, institutional $249m.
- Syrah Resources (SYR) +8.71% Signs binding term sales agreement with Qingdao Taida-Huaran New Energy Technology. Commencing immediately, the agreement is for 20kt of natural graphite in 2019.
- Scentre Group (SCG) +1.53%3Q update; total in-store sales up 2% year on year, to $23.9bn. FY18 guidance of 4% growth reconfirmed. The distribution for 2018 is forecast to be 22.16 cents per security.
- Freedom Foods (FNP) +5.62% Has signed a joint venture partnership with Theland (majority owned by Alibaba Group) to distribute its Arnold’s Farm cereals and snacks in China. Positive announcement.
- Virgin Australia (VAH) +4.76% AGM today. First quarter revenue up 9.7% beats guidance of 7%. Profit before tax is expected to be at least $100m in the first half of FY19 with second-quarter revenue forecast to be up 10% on year.
- Macquarie Bank has said that the current housing downturn will be larger than it first thought with declines of around 15%-20% in Sydney and Melbourne. It suggests the peak to trough falls will be the largest in 40 years.
- 2-Year bonds yield unchanged at 2.04%
- 5-Year yields down 1bps to 2.26%
- 10-Year yields down 2bps to 2.72%
ASIAN MARKET NEWS
- All about the US.
EUROPEAN AND US HEADLINES
- US midterms – Decisive results (or fake news) with the Democrats taking back the House and the GOP hanging on to the Senate. Remind me to watch West Wing again.
- Boeing may be on the verge of issuing a safety warning for its 737 Max.
And finally…thanks to Hans for these gems…