Thursday 31st October – Australian Market Wrap | Beeks Downunder-Because not all financial news is boring!

ASX 200 down 26 points to 6663 as Halloween results spook the market. US Futures up 26 points. Depiste optimistic leads from the Fed and the US, the market did not stand a ghost of a chance as ANZ spooked the horses with a cut to the hallowed franking levels. Trick or treat from ANZ but the stock turned ghoulish and dropped 3.3% on the news. The whole sector took a hit on the news with WBC gravely sick down 1.2%. In miners, Chile is becoming an issue for BHP falling 0.7% with RIO down 0.3% as a soul mate. FMG bucked the trend as iron ore rose from the dead rising % and golds held firm despit the higher AUD. Healthcare stocks rose led by the Vampire CSL up 0.2%. In corporate news, ANZ was the focus but we also saw a covent of AGMs and quarterlies driving a stake through the heart of some. ILU rose after its update up 6.7%, but BUB fell 4.7% into a hole in the ground after a quarterly. In economic news, the zombie economy continues, though building approval rose 7.6%.The 10-year yield up again to 1.15%. Now 14bps rise in a month. AUD banging on coffin lid of 69c and Asian markets cackled higher with Japan up 0.32% and China up 0.09%. Xi and Trump now looking for a venue as APEC is cancelled due to grave issues in Chile.

Todays Highlights

ASX 200 down 26 points to 6663. Late rally saves blushes.
High 6686 Low 6640
ANZ cuts franking causing a sharp sell off of the sector.
BHP hit with Chile woes.
Energy stocks slip, healthcare in the pink.
AUD better at 69.30c
10-year yields up to 1.15%
Aussie gold falls to $2162
Bitcoin lower at US$9114
US futures down 26
Asian markets better with Japan up 0.3% and China 0.1% as four day communist love in finishes.

STOCKS

PET +7.37% reaffirms guidance.
TNY +17.65% not so Tiny.
BUB -4.66% business update
Z1P –4.81% valuation concerns linger.
JIN -4.51% technical selling.
PLS +8.33% Chile issues. Helping Lithium stocks.
JMS +3.08% 4c dividend announced.
REH +4.54% broker upgrades.
IFL -3.02% P&I information.
SHV -3.36% conference presentation.
PCK -11.86% quarterly update.
MOC -5.00% profit taking.
CGL +16.39% AGM and guidance.
LVT +5.26% Microsoft event.
COL +1.01% broker upgrades.
BKL +7.13% AGM presentation.
GPT -3.09% operational update.
QAN -2.58% cracks appear.
Speculative stock of the day: Betmakers Tech (BET) +33.33% as England see plunge as punters say its coming home.
Biggest Risers: CGC, PLS, AQG, PET, BKL, ILU and LIC.
Biggest Falls: PME, HLS, Z1P, BUB, NUF, JIN and ECX.

TODAY

ANZ Bank (ANZ) –3.26% report FY earnings. Cash profit rose 6% to $6.16bn in the year to September, while statutory profit dropped 7% to $5.95bn. Cash profit from continuing operations was unchanged at $6.47bn, shy of the expected $6.60bn. Net interest income fell 1.17% to $14.34bn, while other operating income dropped 3.3% to $4.69bn. NIM fell from 1.87% to 1.76% and average interest-earning assets rose 4.9% to $813.22bn. FUM rose 16.3% to $35.75bn. A 70% franked 80c final dividend has been announced.
Janus Henderson (JHG) –1.09% Has reported third-quarter adjusted EPS of US64c vs consensus of US61c. Revenue came in ahead of expectations at US$536m vs consensus of US$533.9m. AUM of US$356.1bn, was down 1% compared to the prior quarter, as a result of net outflows of US$3.5bn. A final dividend of US36c per share was declared. Dick Weil, CEO did say that despite the improvement in investment performance JHG was cautious about the net flow outlook for the balance of 2019 with headwinds envisaged in several areas of its business.
Iluka Resources (ILU) +6.70% reports Q3 total mineral sands production of 299.7kt, down 4% on last years number. Total mineral sands revenue fell 20.2% to $252.9m, while revenue per tonne of Zircon/Rutile/Synthetic Rutile sold rose 6.7% to $1,634.
Brambles (BXB) +0.59% chairman Stephen Johns is set to retire in 2020, with current Telstra (TLS) chairman John Mullen appointed as director and chairman elect.
Resolute Mining (RSG) +0.83% reports September quarter gold production of 103,201oz at an AISC of $1,202/oz. The quarter saw 127,265oz of gold sales at an average gold price of $1,987/oz. The company maintains gold production guidance for CY19 of 400,000oz but revises group AISC guidance from $960/oz up to $1,020/oz.
GPT Group (GPT) -3.09% report retail comparable MAT growth of 0.1% on last year’s number. Combined specialty comparable MAT fell 0.4%. The company has reaffirmed FY19 guidance of 2.5% growth in Funds From Operations (FFO) per security and a 4% increase in distribution.
Australia (BUB) – 4.66% report Q1 revenue up 58% year-on-year to $14.2m, with China direct export sales up by 113%. Receipts from customers came in at $12.7m for the quarter, while cash and equivalents sits at $18.0m. The company is expecting $23.8m in cash outflows next quarter.
Bellamy’s (BAL) +0.63% FY20 guidance given in CEO’s speech at AGM. Expect a 10-15% year-on-year increase in revenue with an EBITDA margin consistent with last year. The company remains confident in hitting the medium-term target of $500m revenue.
Blackmores (BKL) +7.13% Outlook provided by CEO at AGM. Some challenges present in the short term, with H1 performance expected to be similar to last year’s due to disruptions from a channel shift and regulatory changes in China. H1 gross margins will also be impacted by increased ingredient and raw material costs.
Origin Energy (ORG) –0.76% report Q1 production of 66.5 petajoules (PJ), up from 64.0 a quarter ago. The September quarter saw integrated gas petajoule equivalent (PJe) sales up 12.8% to 63.1 and commodity revenue up 7.4% to $687.9m. Origin capex rose 27.6% to $97m. The company says the production update is in line with their FY2020 guidance for the energy markets business, with electricity sales volumes hurt by the expiration of business contracts, as well as lower customer numbers and usage in the retail segment. Gas sales volumes rose by 18% compared to the prior quarter thanks to seasonal demand.
Santos (STO) -0.61% Maybe missed this one yesterday. Its Barossa project has taken another major step towards a final investment decision with the awarding of the contract for the Floating Production, Storage and Offloading (FPSO) facility to MODEC International Inc.STO holds a 25% interest in the Barossa joint venture along with partners ConocoPhillips (37.5% and operator) and SK E&S (37.5%). STO is also a joint venture partner in Darwin LNG with an 11.5% interest. The Barossa project is nearing the end of the front-end engineering design (FEED) phase and includes an FPSO facility, subsea wells and subsea production system, and gas export pipeline. The project is 300km N of Darwin.

ECONOMIC NEWS

September building approvals rose 7.6% on the month prior, exceeding the expectations of a flat reading.

Private sector credit rose 0.2% for September, below the expected 0.3%.

The import price index for the September quarter rose 0.4%, just shy of the 0.5% expected. The export price index rose 1.3%, exceeding the forecast fall of 0.5%.

BOND MARKET

2 – year bond yields up 3bps at 0.82%
3 – year bond yields up 3bps at 0.85%
10 – year bond yields up 2bps at 1.15%

ASIAN NEWS

Hong Kong Stock Exchange chief says one country two systems was flawed from the start. Was never intended to work.
Chinese PMIs slow again. The manufacturing purchasing managers’ index fell to 49.3, according to data released by the National Bureau of Statistics, worse than the 49.8 forecast in a Bloomberg survey of economists. The non-manufacturing gauge was 52.8, lower than forecast.

A sub-index gauging new export orders started falling again, dropping further into contraction at 47.0, while the sub-gauge for output was at the lowest since February.
Samsung expects earnings to remain weak despite a pick up in the chip market.
Alibaba is considering a mega listing in HK for December with a US$10bn share sale.

EUROPEAN AND US NEWS