The ASX 200 closed above 5900, up 40 to 5906 ahead of the long weekend. Banks moved higher as the RBNZ pushed out the consultation period on capital ratios. All sectors firmed with healthcare the only trouble spot following a disappointing 2Q update from RMD. AMP in the spotlight with the dividend cut to 4c and profits tumbling. No easy fix here and it will be a long and winding road back. Resources find buyers as energy stocks kick higher. The AUD remains under a little pressure which is helping exporters and sentiment. Falling yields in bond markets as economy cools.

Todays Highlights

• ASX 200 up 40 to 5906. Grinds higher as confidence builds.
• High 5915 Low 5864. Up from 5879
• Options expiry boosts volumes. End of month buying helps.
• Banks firm as RBNZ pushes out consultation period to May.
• RMD and AMP disappoint.
• Energy stocks boosted on higher WTI.
• AUD slightly weaker at 71.11c on rate cut potential.
• Sterling surges on Brexit hopes.
• Bitcoin firmer at $3570
• Aussie Gold firmer to $1803
• US futures down 17
• Asian markets stronger with Japan up 1.02% and China up 0.92%

STOCKS IN FOCUS

• CGC +3.88% takeover speculation from private equity.
• SUL +5.20% bargain hunters.
• RWC +5.39% shorts covering.
• APT +4.10% no news, is good news.
• FXL +6.27% CBA becomes substantial shareholder.
• RMD -12.04% misses forecasts.
• NWL –9.54% Business update
• QAN -2.12% broker downgrade.
• BLD -1.01% no respite
• SYD +0.91% broker upgrade.
• VEA -0.83% downgrade on refiner margins.
• API -5.82% on broker downgrade.
• SGM +6.17% few bargain hunters around.
• Speculative stock of the day: White Cliff Mining (WCN) +43.75% visible gold found in bulk samples. No other standouts. Low volume in specs.
• Big Risers – ILU, PNI, AX1, FXL, SGM and RWC
• Biggest Fallers – RMD, NWL, AMP, API, SM1 and NGI.

TODAY

• AMP Limited (AMP) -7.87% Profit warning – clearing of the decks (again). Earnings update with the group now expected to report an underlying profit of $680m and profit attributable of $30m. Plenty of write-offs and restructuring charges. Final dividend of 4c. The company has reaffirmed its guidance on costs to the business related to remediation. Strong capital position of $1.6bn of level 3 eligible capital. It has also reaffirmed its commitment to paying out the majority of the proceeds of its life sale to shareholders. AMP Chair, David Murray has conceded he could well lose his job in a shareholder revolt. The AGM is not for another 4 months and shareholders will need over 50% of the votes to succeed in voting him out over the sale of its life insurance business.
• ResMed (RMD) -12.04% report Q2 results. EPS of 100c beat expectations of 93c while revenue of $651.1m missed expectations of $673.7m. A quarterly dividend of 37c per share has been announced. The company has temporarily suspended the share repurchase program because of recent acquisitions.
• Iluka Resources (ILU) +9.05% Q4 review. Total Mineral Sands revenue up 29.8% on last year to $318.2m. The production of Zircon (+57%), Rutile (+436%) and Synthetic Rutile (+7%) all rose on last year, while production of Ilmenite (-49%) fell. FY unit cash production cost per tonne of Zircon/Rutile/Synthetic Rutile produced rose 38% to $606 and the FY unit cost of goods sold per tone rose slightly, up 1% to $750. The company has a net cash position of $2m as at December 31.
• Pilbara Minerals (PLS) -1.48% December quarter update. Net cash from operating activities $14.9m. Cash and cash equivalents $70.2m with estimated cash outflows of $83m for the next quarter.
• Netwealth Group (NWL) -9.54% Q2 update. Funds under administration (FUA) of $18.99bn as at December 31, down 1.5% from September 30. Net FUA flows of $876m up 14.4% on last quarter at $876m. Funds under management (FUM) rose 1.6% to $3.14bn over the quarter with net FUM flows of $205m.
• Oil Search (OSH) +1.57% exercised its right to acquire a 50% interest in, and operatorship of, 120 leases covering approximately 195,200 gross acres in the eastern area of the Alaska North Slope. OSH will pay approximately US$8m for the leases.
• Viva Energy (VEA) -0.83% Refiner margin update. The actual Geelong Refiner Margin (GRM) was US$3.3/barrel. This was impacted by weakness in margins due to gasoline cracks falling as a result of excess supply. Viva Energy now expects the Underlying EBITDA for the year ended 31 December 2018 (FY2018) for the Refining Business to be approximately $125m, compared to the guidance of $150m provided on 19 November 2018.

ECONOMIC NEWS

• The RBNZ has extended deadlines for banks to respond to increase capital requirements. Now May 3rd. Shame it wasn’t ‘May the Fourth’ be will you.

BOND MARKETS

• 2-Year bonds down 5bps to yield 1.74%
• 5-Year yields down 5bps to 1.84%
• 10-Year yield down 6bps to 2.21%

ASIAN MARKETS

• Bing gets access to China after brief blip.
• Just to stir the pot, the US has sailed some of its warships through the Taiwan Straits.
• Singapore proposes tighter regulation for ‘Ubers’.
• George Soros tells Davos it is facing ‘mortal danger’ from the growth of Chinese AI to repress its people.

EUROPEAN AND US HEADLINES

• Wilbur Ross has a ‘let them eat cake moment’.
• América Móvil, already the largest phone operator in Latin America, is snapping up the Guatemalan and Salvadoran assets of Spain’s Telefónica for US$648m.
• Intel misses on revenue forecasts.
• Former Scottish first Minister charged with attempted rape.
• Matthew Flinders has been found in London.
• Double demerit points this weekend.

And finally………….

Have a great weekend

Clarence

XXX

Drive safely …double demerit points apply.