ASX closed down 34.5 points to 5252. After another good run on the open, fatigue and nerves set in as the trade balance numbers and the RBA rate decision loomed. We seemed to be anticipating international markets and the Dow futures turned negative from the morning but now rallying up 339 points. RBA left rates unchanged. Banks under extreme pressure again, CBA down 1.0% and WBC down 1.5% as the Big Bank Basket dropped to $110.42. Healthcare too under pressure led by the behemoth CSL, down 2.5%, FPH also in the red down 6.8% and RMD fell %. Miners though were mixed with BHP down 0.3% and RIO better by 0.3%. FMG continues to be one of the top performers up 1.8%. Gold miners too in the green with NCM up 2.5% and NST up 7.5%. Energy stocks slightly better on oil price strength, WPL up 1.2%, and STO up 2.8%. Consumer stocks fell, WOW down 2.8% and COL down 1.5%, WES too down 3.8% and MTS down 4.7%. The All Tech Index rose 2.8% with XRO down 2.4% and APT rising 4.7%. In corporate news, OSH is rattling the tin for over $1bn and AIA returned after raising money and rose 9.2%. FLT too returned from its capital raising and saw a blip higher on relief. Up 12.0%. Once again a slew of companies withdrawing guidance with IRE joining the pack and falling 1.1%. In other news, the RBA left rates on hold and trade data was out for the last time for February. Normal service will resume when normal service is resumed. 10 -year yields jumped to 0.88% and could have been the reason for the decline in equities. AUD was firmer at 61.49c. In Asia, China returned from its holiday and rose 2% and Japan rose 2.3% as Abe set to declare a state of emergency and throw another trillion dollars, at yet more stimulus plans.
- ASX 200 down 34.5 to 5252.
- High 5423 Low 5187. Lower volumes.
- Dow futures up 339.
- RBA leaves rates unchanged.
- Big Bank Basket $110.42
- Miners and energy firms.
- Oil futures up around 3% in Asia.
- 10-year bond yields rise at 0.88%
- AUD falls to 61.43c.
- Aussie gold rises to $2705
- Bitcoin rallies higher to US$7280
- Asian markets higher with China up 2%, Japan up 2.3%.
- FLT +11.98% back and finding friends.
- PNV +15.82% quarterly sales.
- TYR +19.50% recovery continues.
- CPU +8.17% guidance revised.
- NST +7.53% quarterly webcast.
- NSR -5.88% increases debt facility.
- FPH -6.85% profit-taking.
- BSL -4.25% buyback changes.
- AIA +9.24% flying high post issue.
- TAH +2.59% stands down staff. No guidance.
- MTS -4.71% selling resumes.
- HUB -7.11% broker downgrades following update.
- MGC -2.22% litigation update.
- IRE -1.15% no change to business but withdraws guidance anyway.
- GPT +2.41% takes the valuation hit.
- AFG +19.62% mortgage brokers back in demand.AD8 +%
- AD8 +16.74% broker upgrades following update yesterday.
- AEI -10.45% selling as PET raises cash.
- WAF +11.90% gold rally helps.
- Speculative stock of the day: Nothing on any volume.
- Biggest Rises: TYR, PNV, PGH, FLT, EML, Z1P and AIA.
- Biggest Falls: MYX, HUB, FPH, PLS, PNI, ASX, NSR and MTS.
- The GPT Group (GPT) +2.41% The company’s wholesale office fund has experienced a negative revaluation of approximately $183m, a decline in book value of approximately 2%. Its shopping Centre Fund has experienced an 11% decline in book value, around $511m.
- IRESS (IRE) -1.15% withdraws FY20 guidance on the back of outbreak uncertainty. In the early part of 2020, operations performed in line with expectations and the company has not seen any material revenue impact as a result of COVID-19.
- Polynovo (PNV) +15.82% March quarter sales +166% year on year to $4.49m. The result includes a monthly record sales result for the US. The company opened six new hospital accounts, including 4 major hospitals, across the US in the last two weeks of March. Chairman, David Williams, noted difficulty predicting sales between months and within months, but highlighted a strong upward trajectory.
- Computershare (CPU) +8.17% FY20 Management EPS now expected to be down around 20% year on year vs prior guidance -15%. Interest rate cuts, reduced transactional revenues and, foreclosure suspensions all weighing on the business.
- Oil Search (OSH) – Is launching a $US700m equity raising via an institutional placement at 210c per share to strengthen its balance sheet. The price represents a 23% discount to yesterday’s closing price.
- Tabcorp (TAH) +2.59% To temporarily stand-down of over 700 employees until June 30. Capex in 2H20 is now expected to be $120m vs prior estimated $160m. Not in a position to provide specific guidance on earnings or financial impacts of COVID-19 in FY20 and FY21.
- SCA Property Group (SCP) – launches $250m Institutional Placement priced at 216c/unit. Will also launch $50m Unit Purchase Plan (UPP). Proceeds from the raising will be used to strengthen SCP’s balance sheet.
- Bluescope Steel (BSL) -4.25% cancels on-market buyback program and reschedules North Star expansion. Notes unaudited performance in the March quarter was in line with expectations. Expects total CAPEX of approximately $200m for H2 vs previous guidance of $240m. Construction and installation programs at North Star are being rescheduled for the next six months to minimise cash spend whilst preserving flexibility.
ECONOMIC and CV19 NEWS
- In seasonally adjusted terms, the balance on goods and services was a surplus of $4.361bn in February 2020, a decrease of $384m on the surplus in January 2020. The trend series has been suspended as at February 2020.
- Two thirds (66%) of Australian businesses reported that their turnover or cash flow had reduced as a result of COVID-19, according to results from the second Australian Bureau of Statistics (ABS) survey on Business Impacts of COVID-19.
- Samsung Electronics climbed more than 3% after it reported an operating profit of 6.4 trillion won (US$5.2 billion) in the March quarter, surpassing the average analyst estimate by 3.6%. Sales rose 5% to 55 trillion won, according to preliminary results.
- Japanese PM Abe is hitting the moribund Japanese economy with a US$1 trillion stimulus package. Some economists are expecting a 20% slowdown in the country’s economy.
- Here is how the Japanese economy compares
EUROPEAN AND US NEWS
- Boris Johnson is now in ICU. Get well soon Boris. Dominic Raab has taken over in his absence.
- Denmark joined Austria in announcing a gradual relaxation of measures imposed to slow the novel coronavirus.
- Companies in the S&P 500 Index will cut their share buybacks by as much as 50% by the end of the year according to Goldman Sachs. S&P 500 share repurchases will halve to US$371bn in 2020, while dividends are forecast to drop 25% from a year ago.
- Since the start of March, 51 companies accounting for 27% of total buybacks last year have suspended their repurchase programs, while 13 members of the S&P 500 have reduced or halted their dividends during the past month.
- Talking Goldman, it has had to take shares in Luckin held in collateral on a margin loan to its chairman as the shares hit record lows. Goldman will now be the proud owner of 76m shares after the COO was suspended and an investigation launched into fabricated numbers.
- The global head of Guggenheim Partners has forecast that oil could drop to US$5-$10 a barrel. He is expecting more companies to fail.
- Boeing effectively stopped making all jets in the US yesterday.
- Airbnb has raised around US$1bn from fresh investors.
- RIP Pussy.