Todays Highlights

• ASX 200 closes down 37 at 5694 as banks wilt at Orr.
• High 5731 Low 5682. Volume better than average.
• Banks lead market lower as final; Royal Commission round kicks off.
• Miners try hard to firm, energy stocks under pressure.
• WES heads for divorce. NEC/FXJ ok’s marriage.
• Viva Energy warns.
• AUD firms on weaker USD 73.12c
• Bitcoin weaker at US$5511
• Aussie Gold steady at $1669.
• US futures down 66
• Asian markets firmer despite APEC fallout Japan up 0.54% and China up 0.50%.

STOCKS IN FOCUS

• CWY +6.30% broker upgrade.
• ORE +7.53% brokers positive after presentation last week.
• CBA -0.58% Comyn in the frame today. Mortgage brokers the target.
• MPL -6.14% loses Garrison contract.
• HSO +1.29% grants exclusivity to Brookfield.
• DHG +4.68% cheers NEC/FXJ merger.
• MQG -2.33% Nick Moore facing commission this week.
• RMD +0.85% broker upgrade.
• SHV +3.64% wildfire almond issues could be positive.
• VEA -12.20% profit downgrade.
• MSB -5.43% selling continues.
• APT -8.77% sold off after big run Friday.
• FLT -3.19% broker updates.
• BLA +6.00% AGM today. Much anticipated.
• A2M +2.51% UBS substantial shareholder.
• LNK -3.99% broker downgrade.
• BBN +10.83% sees off competition.
• MYR -8.89% Sales report confirms race to extinction.
• SMR +18.67% takeover offer from Golden Investments at 95c cash.
• KGN +6.99% UBS upgrade.
• ANG +4.17% Alex Waislitz top picks from Hearts and Minds.
• GNC -3.10% anti-dumping inquiry in China for Barley.
• GEM +3.17% brokers still recommending.
• Speculative stock of the day: The Food Revolution (FOD) +27.59% after the announcement last week of a MOU signed with Sinopec for Australian Canola Oil.
• Biggest risers – ORE, ASL, CWY, DHG, SHV and PTM
• Biggest fallers – VEA, APT, MPL, SDA, XRO and MSB

IN THE NEWS

• Metcash Limited (MTS) –2.46% Have signed a long-term lease agreement with Charter Hall for the for the construction and leasing of a new distributions centre in the South Australian suburb of Gepps Cross. The new facility will replace the existing distributions centre at Kidman park and is expected to improve operational efficiencies and provide access to a wider range of products than what is currently available.
• Lifestyle Communities (LIC) +0.89% Provided a trading update at today’s AGM. FY19 forecasts of 310-350 settlements remain in line with 85 sales and 118 settlements completed as of October 31. The company remains confident of achieving 630-650 settlements over FY19 and FY20. Further land adjacent to Lifestyle Wollert North has also been acquired, bringing the size of the community to 243 homes.
• Baby Bunting (BBN) +10.83% Provided a trading update at today’s AGM. FY19 continues on track with comparable store sales growth of 9.6% YTD. Total sales are up 17% compared to this time last year and gross margin has improved, on track to exceed 34% for the financial year. Private label and exclusive products growth is on track to meet the FY19 target of 25% of total sales, while FY19 EBITDA is forecast to be between $25m and $27m, up from previous guidance of $24-$27m. A new shopping centre format store will open in late December 2018 at Victoria’s Chadstone shopping centre.
• Growthpoint Properties Australia (GOZ) –unchanged – Have entered a trading halt following the announcement of a $250m office asset acquisition, and a rights offer to raise around $135m at an offer price of $3.46 per security. The company also announced pro forma FY19 FFO guidance has increased from at least 24.6c per share to 24.8c per share, while FY19 distribution guidance has been maintained at 23c per share, subject to market conditions.
• Viva Energy (VEA) – 12.20% Refining business and earnings guidance update. Earnings from refining over the second half of 2018 were impacted by weaker than forecast regional refining margins and lost production from the electricity supply disruption in August. Subsequently, the company has revised the FY18 Geelong refining forecast to US$8.00 per barrel, down from the prospectus forecast of US$9.20 per barrel. FY18 refinery uptake forecast has also been revised down to 40.1m barrels from the prospectus forecast of 24.2m barrels. Consequently, FY18 EBITDA forecasts from the refining business have dropped to $150m, 30.8% down from the prospectus forecast of $216.7m. Underlying EBITDA forecasts have also been cut down to $543m (from $605.1m), and NPAT down to $280m (from $324.1m).
• Fairfax Media (FXJ) +2.44% shareholders have voted in favour of the merger with Nine Entertainment (NEC) +1.84% with 88.60% of votes for. Fairfax shares will be suspended from the close of trading on Wednesday, November 28^th following a court hearing for scheme approval.
• Medibank Private (MPL) -6.14% Have been informed that they have not been selected as the preferred tenderer for the renewal of the Garrison Health Services contract. The company will continue to perform the services in accordance to the current contract until June 30, 2019. The operating profit generated from the contract in FY18 was approximately $30m.

ECONOMIC NEWS

• Matt Comyn in front of Rowena Orr at RC. Chair Catherine Livingstone tomorrow.
• NBN defies calls for price cuts to the wholesale pricing structure. Not good news for TLS, TPM or Optus.

BOND MARKETS

• 2-Year bonds down 1bps yield unchanged at 2.04%
• 5-Year yields down 1bps to 2.25%
• 10-Year yields down 1bps to 2.66%

ASIAN MARKETS

• China cut its holdings of US Treasuries by the most since January in September. The country’s total holdings fell US$13.7bn to US$1.15tn in September, according to data from the US Treasury
• The Thai economy has grown less than expected after exports decelerated and tourism from China was hit after a tour boat capsized.
• Japanese imports rose 20% from a year ago. Trade deficit worse than expected.

EUROPEAN AND US HEADLINES

• Mayday! Mayday! Mayday! I’m a Prime minister…get me out of here! UK PM May digs in and faces down critics. Anyone with a better plan can email her at pm@no10.gov.uk
• UK politics is going to be extremely interesting this week. Banks and housebuilders suffering from uncertainty.

And finally……………..

Mahatma Gandhi often walked barefoot which produced an impressive set of callouses on his feet. He also ate very little, making him rather frail and with his odd diet he often suffered from bad breath.

This made him a super calloused fragile mystic hexed with halitosis.

 

Best summation of the current state of affairs in Brexit

https://www.bbc.com/news/av/uk-politics-46241508/viral-fame-for-brexit-sign-language-interpreter

 

Clarence

XX