ASX grinds out a 6-point rise 6590 in a slow start to the week. Late surge of buying help spare a small negative. US futures up 33. Results week begins in earnest with JBH, ANN and AZL taking centre stage. Banks were back in demand with WBC up 0.7% and NAB up 0.4% on news the new CEO may be heading this way sooner rather than later. Miners though struggled as iron ore prices fell in Asian trade and US$80 looks a reality. BHP fell 0.7% and FMG dropped 4%. Gold stocks too came off the boil as tensions cooled slightly. EVN fell 2.9% and NCM was 3.3% down. Weakness crept back into AMP down 3.6% and other financials and industrials were mixed with results the catalyst. In corporate news, JBH +10% showed its quality again, BEN came in better than expected, rising 3.3%, together with ANN which bounced 5.9% on better healthcare results despite higher input costs. The yuan fix passed off without a murmur today at 7.0211 and the AUD was steady at 67.90c with 10-year bonds hardly changed either. Asian markets higher although Japan closed for a holiday.

Todays Highlights

• ASX 200 up to 6590. Results dominate.
• High 6590 Low 6555. Late push.
• Yuan fix at 7.0211
• Iron ore at two-month low. Down 5.7% to US$84 in Singapore.
• Miners slip on iron ore and gold.
• Banks back in spotlight. CBA dividend beckons.
• TLS -1.3% heavy volume.
• AUD slips to 67.90c
• Aussie gold falls to $2204
• Bitcoin slips to $11434.
• US futures up 33.
• Asian markets mixed Japan closed and China up 0.96%.

STOCKS

• RFF +1.66% more director buying.
• REA +6.3% all-time high.
• DHG +4.71% real estate rebound.
• MOC +5.83% housing optimism.
• AKP +1.43% digital update. Not positive.
• ISX +7.00% momentum continues.
• PET +6.94% Appendix 3B.
• PNR +6.67% gold price.
• AFG +11.82% merger with Collective.
• HVN +4.43% sell The Byron.
• TGA -7.41% Strategic review, shutting eight Radio Rentals.
• ALQ +5.01% broker upgrade.
• WES +0.82% Catch caught
• CIA -6.37% iron ore price drop.
• DDR -4.10% free shares issued to employees.
• IAG +1.17% new general counsel.
• FMG -3.99% iron ore price.
• WSA -2.38% nickel price uncertainty.
• DCN +16.89% Mt Morgan update.
• MRN -17.77% takeover by NEC.
• FSF -5.03% asset write downs and dividend cut.
• Speculative stock of the day: DroneShield (DRO) +25.45% some substantial shareholders appearing on the register following a presentation last week. Beta Gamma has 6.18% and now John Franklin has 5.99% after some dilution.
• Biggest Risers: JBH, NWS, ISX, PET, REA and ANN.
• Biggest Falls: RMS, ORE, CIA, PRU, NIC and OPT.

TODAY

• Nine Entertainment (NEC) +1.07% Through its subsidiary Fairfax media has announced a 146c per share takeover bid for Macquarie Media Limited (MRN). The offer values the company at $275.4m. The acquisition will be financed from cash reserves and existing debt facilities.
• Ansell (ANN) +5.95% FY adjusted profit $150.9m versus $147.4m expected. Revenue missed; $1.50bn vs $1.52bn expected but adjusted EBIT better; $202.8m vs $201.7m expected. Adjusted EPS 111.5c. FY 2020 guidance of EPS 112-122c vs expectations of 116c. The company is anticipating a return to 3-5% organic growth range, as well as continued EBIT growth from the transformation program, pricing, lower raw material costs and better product mix. The deployment of excess cash for M&A or buyback will support achievement of EPS at the higher end of the guidance range.
• Aurizon (AZJ) +1.91% underlying NPAT $473m vs $445.4m expected. Revenue a slight miss, $2.91bn vs $2.92bn expected. Underlying EBIT $829m vs $800.3m expected. Final dividend 12.4cps (70% franked). FY guidance (Jun 2020) of underlying EBIT $880-930m which is ahead of expectations. Aurizon completed two strategic reviews (on the vertically-integrated structure and capital structure); announced a 12-month on-market buy-back for up to $300m.
• Bendigo & Adelaide (BEN) +3.35% FY cash earnings came in soft, at $415.7m vs $426.2m expected. Statutory NPAT was a big miss; $376.8m vs $434.5m expected. Cash EPS of 85c, down 7.7% on year. Net interest margins were unchanged, at 2.36. Final dividend of 35cps.
• JB Hi-Fi (JBH) +9.98% Full-year results; NAPT came in ahead of estimates at $249.8m vs consensus of $242.5m. Revenue beat expectations at $7.10bn vs consensus of $7.09bn and EBITDA surpassed expectations at $429.1m vs consensus of $419.2m. A final dividend of 51c per share was declared. JBH expects revenue of $7.25bn in FY20.
• Cooper Energy (COE) +3.67% Full-year results; Statutory NPAT fell short of estimates at ($12.1m) vs consensus of ($4.5m). Revenue was up 12% on year to $75.5m although this wasn’t enough to meet expectations of $75.7m. Adjusted EBITDA surpassed estimates at $32.9m vs consensus of $32.7m. COE said it anticipates a substantial increase in gas production in FY20 when the Sole gas field commences supply. 5 petajoules of gas and around 240k barrels of oil are expected in FY20.

ECONOMIC NEWS

The state of the nation

BOND MARKETS

• 2-Year bond yields unchanged at 0.71%
• 5-Year yields unchanged at 0.67%
• 10-Year yields up 1bps to 0.96%

ASIAN NEWS

Japan closed today.

• IMF contradicts US saying ‘little evidence’ of currency manipulation by PBoC or Beijing.
• The PBoC is on track to release its own cryptocurrency. the digital currency would replace M0, or cash in circulation, rather than M2, which would generate credit and impact monetary policy.
• According to trade data released by China’s General Administration of Customs, iron ore imports rose by 21.1% in July to 91m tonnes, leaving volumes up 1.2% on the same month a year earlier.
• More weekend violence in Hong Kong. Cathay Pacific has been ordered to suspend staff involved in the HK protests. This is not going to end well.

EUROPEAN AND US NEWS

• Italy has avoided a credit downgrade but only just as Fitch keeps the rating on negative. Salvini has filed a ‘no confidence’ motion against the government. 5-Star movement calls no confidence vote ‘stupid and foolish’. Only in Italian.
• The scorecard for last week

• Here is a chart of the recent volatility in US markets

And finally…………..

An elderly couple are in church. The wife leans over and whispers to her husband, “I just let out a long, silent fart. What should I do?” The husband replies, “First off, replace the batteries in your hearing aid!”

 

There was a blonde who just got sick and tired of all the blonde jokes. One evening, she went home and memorised all the state capitals. Back in the office the next day, some guy started telling a dumb blonde joke. She interrupted him with a shrill announcement, “I’ve had it up to here with these blonde jokes. I want you to know that this blonde went home last night and did something probably none of you could do. I memorised all the state capitals.”

One of the guys, of course, said, “I don’t believe you. What is the capital of Nevada?”

“N,” she answered.

Clarence

XXX