ASX 200 drifted 5 points lower to 7125 as banks gave up some of their recent gains. Dow futures down points in quiet pre holiday trade. Closed tonight. Banks eased led by CBA down 1.7% and NAB down 0.3% after announcing another Capital Note issue. Financials generally weaker though QBE surprised again to the upside following results and rose 4.3%. BHP down 0.5% as results loom tomorrow. WPL was a rare bright spot in resources up 1.5%.  In corporate news, BXB pleased markets with a better than expected result rising 3.9% and NSR rose 6.2% after receiving yet another takeover proposal. CTX rose 3.9% after it opened its books to the new Canadian bid and KAR dropped % after a Peruvian drilling update. In smaller caps we saw good gains in CMP up 26.7% on FDA approvals for its MEG and ZNO rose 25.6% on the continuing Covid-19 epidemic. Nothing on the economic front locally but nasty numbers on Japanese GDP point the way to a technical recession there to come through. 10 year yields stable at around 1.05% and AUD unchanged. Asian markets saw Japan off 1% on its GDP results and China up 1.22% on stimulus hopes.

• ASX 200 falls 5 to 7125, late drift slightly higher.
• High 7137 Low 7104 Low volume. US holiday.
• GM axes Holden.
• Banks slip. CSL steady. Miners mixed
• Energy better. BXB Cheers. QBE positive on results.
• 10-year bond yields steady at 1.06%
• AUD stable at 67.24c.
• Dow futures up 17 points.
• Aussie gold steadies at $2352
• Bitcoin drops to US$9835
• Asian markets mixed as Japan drops 1% on GDp and China up 1.2% on stimulus hopes.

STOCKS                                               

• TPM -0.25% UBS ups PT by 27%.
• ZNO +25.65% huge run continues.
• PET +10.81% Chinese update.
• UWL +11.29% good results.
• BEN -trading halt- $300m capital raising and cuts dividend.
• KPO +11.36% confidence building.
• PME -6.47% broker downgrades.
• JIN -6.83% manganese prices.
• IEL -5.32% broker downgrades.
• KAR -4.46% Peruvian drilling update.
• BBN -0.28% Macquarie sees better 2^nd half.
• KMD -1.16% Macquarie not convinced.
• ALU +1.94% results late
• GNG +6.40% maintenance contract.
• NSR +6.19% takeover approach.
• CTX +3.87% Canadians granted DD
• LTR +13.64% investor presentation.
• MLX -4.11% Bell Potter still positive. Misguided but positive.
• WZR -5.26% placement stock weighs.
• Speculative stock of the day: Compumedics (CMP) +26.62% milestone US FDA approval. For MEG. With the FDA approval in place, CMP may now enter the lucrative US clinical market with its single Dewar MEG technology. Each system will typically sell for around USD3m to USD4m.
• Biggest Risers: EQT, LIC, NSR, CCX, FCL and DTL
• Biggest Falls: JIN, PME, IEL, RMS, Z1P, KAR and MSB

TODAY

• Brambles (BXB) +3.87% has reported H1 NPAT of $278.9m vs $268.4m from a year ago. Revenue beat expectations ($2.40bn vs $2.36bn) whilst operating profit missed slightly ($435.5m vs $439.4m expected). BXB declared an interim dividend of 9c. The company provided guidance of FY20 mid-single-digit growth in sales revenue and underlying profit.
• Bendigo & Adelaide Bank (BEN) reports H1 cash NPAT $215.4m vs expectations of $210.3m. Reports H1 net interest margin of 2.37% vs 2.35% a year ago. Net interest income $676.4m vs $649.5m a year ago. CET1: 9.00% vs year-ago 8.76%. Total fully franked dividend; 31 cps vs year-ago 35cps. Outlook; expects strong growth with NIM and expense headwinds. Mortgage lending growth rates expected to exceed system growth. Business lending growth to revert towards system growth through H2. Impact of drought and bushfires expected to increase bad debt expense but within 11bps long term average. NIM expected to decline from 1H. BEN has launched a $250m institutional share placement priced at A$9.34/share. It is expected to add approximately 67 to 81 basis points to BEN’s Level 2 Common Equity Tier 1 capital ratio. A non-underwritten SPP is targeting to raise A$50.
• GWA Group (GWA) +2.05% reports H1 normalised NPAT $24m vs expectations of $24.5m. 1H revenue $206.3 vs expectations of $216.8m. Normalised EBIT of $38.1m vs guidance of $37-41m. Interim dividend 8.0cps, fully franked; record 21-Feb, Payable 4-Mar. FY20 guidance maintained; normalised EBIT A$80-85M. GWA expects earnings in H2 will be higher than H1 primarily due to the timing of a price increase of ~2.5% from 1-Nov-19, continued delivery and acceleration of the Methven cost synergies, and further acceleration of supply chain and SG&A cost savings as part of the $9-12m cost savings target by FY21.
• Saracen Minerals (SAR) +1.94% Costs down and a higher realised gold price the cornerstone of these results. No dividend was declared, however, MD Raleigh Finlayson said the board would revisit the decision at the end of the year. reports H1 underlying NPAT $80.2m vs consensus $92.1m. Revenue $409.9m vs consensus $406.6m. NPAT $69.0Mm vs consensus $92.1m. On track to meet FY20 production guidance of +500,000oz.
• QBE Insurance Group (QBE) +4.31% Looks like a solid set of numbers with adjusted cash profit and GWP ahead of estimates, although a cut to the final dividend may upset the market. reports FY adjusted cash profit US$733m vs consensus US$708.3m. statutory NPAT US$550m vs year-ago US$390m. Gross written premium (GWP) US$13.44bn vs consensus US$13.36bn. Adjusted combined operating ratio 97.5%. Net investment return 4.6% vs year-ago 2.2%. Final dividend of 27c per share, franked at 30% vs year-ago 28c per share. In FY21 QBE expects combined operating ratio between 93.5% – 95.5% and net investment return 2.5% – 3.0%.
• Money3 (MNY) +7.01% Revenue up 5%. Profit up 34.6% to $15.17m Dividend 5c franked to 30%. forecast NPAT (continuing operations) for FY20 in excess $30.0m and statutory NPAT in excess of $32.0m. MNY also forecasts further loan book growth in 2H FY20 to over $475.0m for the Group. Minimum 10c dividend for FY20. Looks a positive set of numbers and upgrade will help.
• Imdex (IMD) 12% increase in underlying earnings driven by increased activity in Asia-Pacific. EBITDA of $28,1 with revenue up 2% to $127,9m. Interim dividend of 1c up from 0.8c.

ECONOMIC NEWS

• There were 578 auctions held in Sydney over the past week returning a preliminary clearance rate of 80.3%, according to CoreLogic.
• Melbourne’s clearance hit 79.2% from 717 homes listed for sale. A week earlier the Victorian capital had 419 homes listed for sale, with a final clearance rate of 68.5%.

BOND MARKET

ASIAN NEWS

• China said the number of coronavirus cases climbed above 70,000 as the province at the epicentre of the outbreak reported 1,933 new cases, slightly higher than a day earlier.
• Thailand and Singapore down grade economic outlook on Covid -19.
• Japan heading for a recession even before virus effects hits. Gross Domestic Product shrank at an annualised pace of 6.3% from the previous quarter in the three months through December, the biggest slide since a previous tax increase in 2014.

• Private consumption plunged by an annualized 11% in the quarter.
• Businesses also scaled back investment by 14%

EUROPEAN AND US NEWS

• GM pulls Holden from Australia.
• The US has warned Europe over its embrace of Huawei to build out 5G tech.
• Tesla’s Berlin factory preparation has been delayed by a court declaring the site must eb assessed for environmental impacts.
• 20% of S&P 500 companies have waned on the effects of Covid -19.

And finally….

A Panda walks into a bar and says can I have a vodka and………………….coke. The barman says why the big pause…

The panda says I don’t know I was born with them.

 

Clarence

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