ASX 200 drops 161 points to 6978 in Monday bloodbath. Coronavirus fears came home to roost with Dow futures down points too. Bob Geldof had it right with his hit song, Mondays can be bad. Weekend news on virus infections coupled with weaker than expected US PMI caused selling from the open. Across the board, losses escalated from the opening after a slew of disappointing corporate results added to the negativity. BSL dropped 7.9% as it had issues on a number of fronts. RWC fell 26.5% after it revealed even plumbing supplies are not immune to a downturn. ALG was hit hard by the coroners 300-page recommendation on the Dreamworld tragedy. In tech stocks, AD8 dropped 14.4% after somewhat underwhelming results too. In other corporate news, NHF fell 7.1% on its results whilst RMS delivered and rose 14.6%. No sector was spared outside of gold. Gold stocks were the only bright spots in a sea of red, NCM up 5.1% and NST up 3.3%. 10-year yields fell to 0.92% and the AUD continued under pressure heading to 66c. Asian markets were weaker though Japan was closed for Emperor’s Day. South Korea down 3%. Hong Kong down 1.5% and China down 0.45%
- ASX 200 drops 161 points to 6978.
- High 7121 Low 6968. Above average volume.
- Broad deep losses. Gold the only sector saved.
- 10-year bond yields slip to 0.92%
- AUD weak at 66.08c.
- Dow futures down points
- Aussie gold pops to $2513
- Bitcoin rallies to US$9774
- Asian markets negative with South Korea down 3%. Hong Kong down 1.5% and China down 0.45%
- RMS +14.57% good interim report.
- SAR+7.40%.WGX +4.58% and NCM +5.05% on bullion rise.
- ING +4.02% broker upgrades.
- EOS -12.95% high PEs unwind.
- MVP -10.14% growth stocks under pressure.
- AEF -10.64% thin market.
- M7T -8.89% profit taking.
- SDV -10.86% tech sell off.
- PTL +1.52% results
- SBM +4.90% conference presentation.
- VMT – trading halt – Transaction announcement
- ALQ -4.35% four staff suspended after lab certs were ‘ammended’.
- COE -5.56% profit dips.
- MAH +3.45% upgrades guidance.
- CNU +5.59% half yearly reports.
- EML -10.15% sell gathers pace.
- MEA +11.48% light at the end of the tunnel.
- FDV -4.98% increases shareholding in two operating companies.
- Speculative stock of the day: Alto Metals (AME) +80.56% Off market takeover announced last week from Shandong Goldsea Group for 6.5c in cash. Take no action is the recommendation.
- Biggest Risers: RMS, AGG, SAR, CNU, RSG, NCM and SBM
- Biggest Falls: RWC, ALG, AD8, EOS, SHV, PPK and AEF
- Bluescope Steel (BSL) -7.88% reports a huge drop off in profit and EBIT from a year ago. H1 underlying NPAT came in at $199.6m, well down from last the $613.5m recorded a year ago. EBIT came in at $302.4m vs $849.6m a year ago. Revenue beat; $5.86bn vs expectations of $5.74bn. Interim dividend 6cps, unfranked (same as a year-ago). BSL extended its on-market buy-back and will buy up to A$100M during 2H FY2020. BSL also provided an update on its Chinese operations in the wake of COVID-19, saying the group’s China businesses are all now operational, with the exception of our Hubei sales office. Most employees have returned to work safely and no cases of COVID-19 have been reported within BlueScope China. It is expected that February and March business performance will be heavily impacted.
- nib Group (NHF) -7.13% reports H1 NPAT $57.1 vs estimates of $73. Net premium revenue came in at $1.23bn vs consensus $1.22bn. Underlying operating profit $83.2m, down sharply from $114.3m a year ago. Interim dividend 10cps (fully franked). Record 6-Mar; payable 7-Apr. NHF offered FY20 guidance of underlying operating profit of at least $170m and statutory operating profit of at least $150m.
- Viva Energy Group (VEA) +1.06% reports FY NPAT $135.8m, at the lower end of the previously stated $135-165m guidance range and expectations of $148m. VEA has announced a $680m off-market buyback, returning after-tax proceeds from the sale of its security holding in Viva Energy REIT. Revenue $16.54bn vs expectations of $16.03bn. Underlying EBITDA $644.5m vs guidance of A$625-655m. Final dividend 2.6cps, fully franked.
- Jumbo Interactive (JIN) –4.89% TTV up 25.3% to $185.3m. Revenue up 23.1% to $37.6m. Active customers up 118% over the last two years. Interim dividend 18.5c. The growth in Internet lotteries continues with Internet sales now representing 26.7% of all tickets sold in Australia (23.5% at June 2019 and 21.5% at December 2018). The balance sheet remains healthy with Net Assets of $79m and the Company’s cash position at $71m. JIN is all about the number of jackpots. 23 in the half with a value at just over $1bn.
- Macmahon Holdings (MAH) +3.45%reports H1 NPAT $28.7M vs consensus $29.3m. Revenue $686.7m, beating expectations of $632.5m. EBIT $44.1m ex-items, beating consensus of $40.9m. Interim dividend 0.25cps, 30% franked. Record 17-Mar, payable 2-Apr. MAH also upgraded guidance FY guidance; now expecting revenue of $1.3-1.4bn vs prior guidance $1.2-1.3bn. EBIT guidance of $85-95m vs prior guidance $80-90m. Solid results and upgraded guidance – the market should like these numbers.
- Audinate (AD8) +14.38% Revenue up 14.1% to $16.147m. EBITDA up 11.3% to $1.873m. No dividend. Gross profit up 20% to $12.5m Total Dante-enabled products increased 35% to 2,371 (1H19: 1,639). Gross margin dollars (in US$ terms) grew 11% to US$8.5m compared to US$7.5m in 1H19. No guidance given except general optimistic comments.
- G8 Education (GEM) -5.21% Revenue of $920.1m, up 7.2% on pcp. Underlying EBIT of $132.5m, in line with November 2019 guidance. Fully franked dividend of 6c, representing a full year payout of 70% of lease adjusted NPAT. The company has warned of significant instability due to the bushfires and CoVid-19. This has affected occupancy rates and is slightly behind last years’ rates. The impact has been mitigated by cost management and it is too early to form a clear view.
- oOh!media (OML) -3.41% reports FY underlying EBITDA $139m, towards the lower end of guidance of $138-143m. Revenue $649.6m vs expectations of $655.5m. Underlying NPATA $52.4m. Final dividend 7.5cps, fully franked. Record 2-Mar; Payable 27-Mar. FY guidance of underlying EBITDA $140-155m. February YTD revenues flat with pcp which had grown +11%.
- Reliance Worldwide (RWC) -26.45% reports H1 underlying NPAT $63.7m vs year-ago $80.5m. Revenue $569.3m vs consensus $550.7m. Adjusted EBITDA $126.3m vs year-ago $137.4m. Interim dividend 4.5cps, franked 20% vs 4cps, fully franked last year. In FY20 expects underlying NPAT between $140-150m, adjusted EBITDA in the range of $265-280m. Minimal impact from the coronavirus anticipated in the short term.
- Nothing today
- South Korea warned its fragile economic recovery is under threat from the coronavirus. Samsung Electronics, LG Electronics are taking precautions. The number of infections in South Korea soared from just over 30 to more than 760 in the past week. The Bank of Korea is considering cutting interest rates to help stimulate the economy.
- President Xi Jinping urged China to “spare no effort” to contain the coronavirus outbreak in Beijing.
- The Standing Committee of the National People’s Congress is expected to consider a proposal to postpone the start of parliamentary meetings planned to begin next week.
EUROPEAN AND US NEWS
- Trump due to arrive in India for Presidential visit.
- Merkel’s Christian Democratic Union took 11.2% of the vote in Sunday’s Hamburg election, a drop of more than 4%. The biggest gainer was the Green party, which doubled its share to a projected 24.8%. The city-state’s governing Social Democratic Party secured a clear victory with about 38.6%, even as its support eroded from 45.6% five years ago.
- Venice pulls carnival in response to virus outbreak.
- South Carolina primary this week will confirm Sanders has the secret recipe for success.
A golfer was having a terrible round – 20-over par for the front nine with scores of balls lost in water or rough. When his caddie then coughed as he steadied himself over a 12-inch putt on the 10th, he lost it.
“You’ve got to be the worst caddie in the world!” he yelled.
“I doubt it,” replied the caddie, dead-pan. “That would be too much of a coincidence.”
After a particularly poor round, a golfer spotted a lake as he walked despondently up the 18th. He looked at his caddie and said, “I’ve played so badly all day, I think I’m going to drown myself in that lake.” The caddie, quick as a flash, replied, “I’m not sure you could keep your head down that long.”