ASX down a 104 points to 5154 (-1.98%) despite big falls overnight on Wall Street. A good rally petered out towards the end as bargain hunters took heart form better Dow futures up 250 but failed to follow through at the close. The big story of the day financially was the RBNZ telling NZ banks to cut dividends to conserve capital. Clear ramifications for our banks if RBA and APRA went the same way as NZ and UK/Euro banks. A sigh of relief as Morrison suggested that it would not happen here, and banks were more positive after. Moodys downgraded banks to negative outlook. though. The Big Bank Basket fell to $109.37 as CBA fell 3.8% and WBC dropped 4.3% despite a new CEO. The king is dead long live the King. Healthcare continues to be mixed, CSL up 0.4% although few others followed with RHC down 3.7% and SHL down 6.5%. Industrials mixed with pockets of green in WES up 0.6%, BXB up 3.4% and COL up 1.4%. Losers included REA group down 7.0% and the bond proxies TCL down 3.3% and SYD down 6.9% as NSW moved to a 90-day lockdown. REITS also under pressure as yields rose, GMG down 2.2%, SCG down 3.1%, and MGR down 4.1%. In the miners, BHP dropped 1.3% and FMG fell 3.5%. Gold miners though were better with NCM up 4.0% and EVN up 5.1%. Tech stocks slipping XRO down 5.3% and APT down 2.5%. The All tech index down 3.45%. In corporate news, IEL returned from its capital raise now balance sheet enhanced and jumped 27.6%. WEB a similar story jumping initially but closing well off highs up 1.8% and NXT went to the well for over $600m. Plenty of placements and capital raising around with more to come. On the economic front, ScoMo announced free child-care helping GEM up %. The 10 -year yield rallied to 0.76%. Asian markets mixed with China up 0.28% and Japan down 0.28%
- ASX 200 down 104 to 5154.
- High 5228 Low 5065. Much lighter volumes again.
- Dow futures up 250 points.
- Big Bank Basket $109.37.
- Crude futures up 5%
- 10-year bond yields rallied hard to 0.76%
- AUD falls to 60.83c.
- Aussie gold rises to $2604
- Bitcoin drifts to US$6620
- Asian markets mixed with China up 0.28% and Japan down 0.28%
- WEB +1.83% capital raising relief.
- IEL +27.60% capital raising keeps strong balance sheet.
- AVH -10.68% RECELL data online
- JIN +8.67% finds friends again.
- TNE +1.81% Bell downgrades.
- UMG +4.86% change of director’s interest.
- GEM +28.57% MFD +35.00% free childcare.
- ARF +21.74% owns childcare centres.
- SYD -6.90% 90-day lockdown hurts.
- WOR -6.39% rally unwinds.
- WTC -5.79% silence on CV19 impacts.
- SDI -% CV19 update.
- ALX -% successful bond issue.
- TCL -% successful Eurobond issue.
- XRO -% broker remains positive.
- DUB -% raises money at 60c.
- SMR +% cash takeover at 100c.
- MAQ +% no volume but data centre winner.
- KMD – secures $150m in equity.
- WBC +% Peter King appointed new CEO.
- FXL -% credit providers under pressure again.
- ZNO +% becoming a substantial holder.
- PET +% China continues to recover.
- Speculative stock of the day: Rhythm Biosciences (RHY) +% validates its key biomarker for its low-cost simple colo-rectal cancer test.
- Biggest Rises: IEL, ARF, CQR, APE, JIN, MXT and STO.
- Biggest Falls: MYX, AVH, HMC,CGF, GWA, PMV and IDX.
- Adelaide Brighton (ABC) -5.07% withdraws FY guidance. All sites remain operational with the business largely tracking in line with expectations. ABC notes it remains well-positioned with more than $450m of cash and committed and undrawn bank facilities.
- NextDC (NXT) – to launch a fully underwritten $672m institutional placement at $7.80/share with SPP to follow. Funds will be used to support the company’s growth agenda including the development of the first tower of S3, its third data centre in Sydney. FY20 guidance reaffirmed, expects revenue in the range of $200m-206m, underlying EBITDA of $100-105m and capex between $320-340m.
- IDP Education (IEL) +27.60% Has upsized its capital raising by $50m to $225m following strong demand.
- Westpac (WBC) -4.31% appoints Peter King as CEO. King was appointed acting Westpac Group CEO in December after Brian Hartzer stepped down following a money-laundering scandal that included claims of child exploitation.
- National Australia Bank (NAB) –5.60% Notes New Zealand’s new dividend restrictions aren’t anticipated to materially impact it’s level 1 capital position.
- Webjet (WEB) +1.83% completes the institutional component of entitlement offer, raising $231m at $1.70/share. The retail shareholders’ entitlement offer is expected to raise $115m. Bain Capital Credit to become a new shareholder, subscribing for $25m and agreeing to a potential economic commitment of up to an additional $65m.
ECONOMIC and CV19 NEWS
- Westpac chief economist Bill Evans is now expecting a 9% peak in the unemployment rate at the end of June following the latest stimulus effort from the government.
- NAB Business survey: Business conditions fell 9pts to -3 index points. Conditions were weaker across all industries except for retail and wholesale. Finance, business & property and manufacturing saw the largest declines. Conditions were significantly lower across all states, with NSW, WA, and Vic seeing the largest declines.
- Business confidence was 9pts lower at -11 index points. Confidence was lower across all industries, though personal and recreation services and retail saw the most significant declines. Confidence is now weakest in recreational & personal services, followed by wholesale.
- Moody’s changed its outlook for the Australian banking system to negative from stable
- South Korea reported 89 new infections in 24 hours, taking the country’s tally to 9,976.
- Softbank will scrap an agreement to spend US$3bn to buy WeWork stock. This was part of the WeWork bailout package.
EUROPEAN AND US NEWS
- Modest losses expected from European markets.
- Big jump in UK deaths. Positive infections up by 4000. Low levels of testing still the case. Only 12,750 tests a day. Target is 25,000 tests a day. Only 2000 front line NHS staff have been tested. Over 1m people work for the NHS. One of the biggest employers in the world.
- The Pentagon is set to supply 100,000 military body bags for civilian use. They are known as Human Remains Pouches.
- Car sales fell 7.1% for GM and more than 10% for Fiat Chrysler in the first three months of the year. Heard of zero interest rate loans for seven years to buy a car.
- Almost one million people have claimed “universal credit” welfare payments in the U.K. in the past two weeks.
- A United Nations climate conference scheduled for November in Scotland. Edinburgh Festival cancelled and Wimbledon cream teas will no longer be served.
- Jobs number looms in US. Non -farm payrolls expected to show a loss of 100,000 jobs and unemployment at 3.8%.
And finally…thanks Al…look away children…
And I love this one…