ASX 200 starts the week down 135 points at 5353 (-2.45%) as late selling hits. Dow Futures down points in quiet trade. Volume dropping off but banks once again underperforming as NAB fell 2.4% on IT writedowns ahead of results. CBA down 1.9% and the Big Bank Basket down to $107.55. Big miners eased with BHP and RIO down 1.5% and 2.8% respectively. FMG though bucked the trend up 0.6%. Gold miners eased after the positive runs last week, NCM down 3.7% and energy stocks slipped on a falling WTI front-month oil price as storage seems to be drying up. Brent Crude less affected. WPL down 4.4% and STO down 3.7%. Healthcare led lower by CSL down 3.8% and TLS too in the doghouse today falling 2.2%. Consumer stocks were weaker with WES down 3.00% and SYD down 2.9% on traffic numbers. Tech stocks steady with the All Tech Index down 1.16%. WTC was an interesting one as 9m crossed at 1439c by Goldman and the likely seller rumoured to be Capital Group. The stock rose 0.2%. In corporate news, CTX fell 7.8% after it announced its Canadian suitor was walking away due to the pandemic, but the door is left wide open to come back with a revised offer. APT unchanged despite the UK halting payments to credit providers during the crisis. In economic news, the ABS revealed a survey on how households are dealing with CV19 whilst in NZ PM Ardern is moving to Level 3 from 4 next week sending a positive signal about the end of restrictions. Germany heading that way too. The 10-year yield drifted to 0.82%. AUD at 0.6348c. Asian markets mixed with Japan down 1.1% and China up 0.2%.

• ASX 200 falls 134.5 to 5353 (2.45%). Late sell off.
• High 5491 Low 5353. Lighter volume.
• Big Bank Basket $107.55.
• NAB makes write-downs.
• Healthcare ease. CSL down.
• Short term WTI oil under pressure on storage issues in US. Oil sector down.
• Dow Futures down 40 points.
• 10-year bond yields lower at 0.82%
• AUD steady at 63.48.
• Aussie gold drops to $2650
• Bitcoin rallies to US$7191
• Asian markets mixed with Japan down 1.1% and China up 1.5%.

STOCKS                                               

• HM1 +2.33% NTA backing.
• SYD -2.87% traffic numbers sink. No capital needed.
• ORI -2.68% UBS upgrades
• BXB -5.87% UBS sees limited upside.
• AMP -5.82% cut to a sell by Citi.
• MSB -6.45% slipping away.
• CTX -7.81% bidder walks. Could be back.
• PGL +1.08% credit stocks under pressure again.
• SFG +32.00% response to ASX query.
• VGL +17.42% ex-entitlement.
• WAM -7.84% ex-dividend.
• KGN -0.91% late business update.
• WTC +0.19% big line of 9m at 1439c from Capital Group as it sells the remainder of its once 7.7% stake.
• PNR – March quarter presentation.
• AT1 +8.65% rally continues, post new IPO listing.
• Speculative stock of the day: RooLife Group (RLG) +185.71% RooLife appointed as a Alipay marketing partner. RooLife to provide online store management, marketing, and online coupon management services for merchants and retailers. RLG provides fully integrated digital marketing and customer acquisition services focusing on driving online sales of products and services for its clients. Powered by the Group’s hyper-personalisation and profiling Artificial Intelligence System, RooLife provides personalised real-time, targeted marketing.
• Biggest Rises: ERA, NEC, FCL, IDX, DJW, and VGI.
• Biggest Falls: NHC, REG, WAM, CTX, LLC, MSB and BSL.

TODAY

• Caltex (CTX) -7.81% Canadian company, Alimentation Couche-Tard has decided not to proceed with its $8.8bn takeover. Notes it may look to re-engage once there is more clarity surrounding the global outlook.
• National Storage REIT (NSR) -3.03% revises FY20 guidance for EPS to 8.5-9c. All centres across Australia and New Zealand have remained open and operational throughout COVID-19 pandemic. Notes storage revenues continue to demonstrate the resilient nature of the self-storage asset class to economic volatility. No decision on H2 distribution.
• South32 (S32) -3.40% reports Q3 production; aluminium 245kt vs year-ago 242kt. Metallurgical coal 1,167kt vs year-ago 990kt. Suspending the remaining US$121m of its share buy-back program. Lowering FY20 capex guidance to US$500m. Withdraws guidance for its operations in South Africa and Colombia. Lowered FY20 production guidance at Australia Manganese by 5%. Maintained FY20 guidance for all other operations, where to date production and sales have been unaffected by COVID-19.
• Myer (MYR) – sees uplift in online sales. Chief Customer officer Geoff Ikin said, “the Easter Treats Sale last weekend was a huge success, sales were in line with Black Friday figures.
• Praemium (PPS) -1.69% reports Q3 FUA $19.35bn vs quarter-ago $20.31bn.
• NAB (NAB) -2.38% Flags $1.14bn 1H earnings hit. Expects an increase in provisions for customer-related remediation of $268m before tax, expected to reduce the group’s CET1 ratio by ~6 basis points. A change to software capitalisation policy will reduce NAB’s capitalised software balance by $1,056m and reduce 1H cash earnings by $742m after tax. Anticipates impairment to the carrying value of NAB’s investment in MLC Life of $214m. Maybe more to come…saying nothing yet about bad debts etc…just IT and wealth.
• Perpetual (PPT) +0.04% FUM $21.4bn at March 31 vs quarter-ago $26. The fall in the value is mainly due to the impact of COVID-19 on Australian and global investment markets. Net outflows for the quarter were ($0.8bn). Cost growth guidance revised down to 2.5-3.5% from 4.5% for FY20.
• Sydney Airport (SYD) -2.87% will not declare H1 distribution, though it doesn’t see the need to raise equity. March traffic was significantly impacted by the outbreak, down 45.1%. Secures $850m in additional bank debt facilities. Targeting a 35% reduction in operating costs for the next 12-months. Capex for the next 12-months expected in the range of $150-200m, focusing on safety maintenance, and asset resilience. CEO comments, “We remain confident in the strength of our balance sheet and liquidity position, but we will continue to tightly manage liquidity and operating and capital expenditure to reflect the significant reduction in passenger traffic at the airport.”
• Metcash (MTS) – Launches $330m raising to ‘strengthen its balance sheet & enhance liquidity’. The placement will be offered to institutional investors at 280c /share. It will also offer a non-renounceable share purchase plan to eligible retail investors worth up to $30m. Earnings benefit from higher sales in March / early April has been partly offset by increased costs to service the elevated demand and the need to manage health and safety risks.

ECONOMIC NEWS

• Click HERE to view the new ABS release ‘COVID-19 impacts on Australian households’.
• Around 3% of people who had a job in early March no longer had one by early April.
• Whilst the findings show that Australians are taking a range of precautions to prevent the spread of COVID-19, two-thirds (68%) still remain concerned or very concerned about their health due to the spread of COVID-19.
• NZ will reduce from Level 4 to Level 3 next week. NZ Budget 14^th May. Industries such as construction and manufacturing may resume provided they can provide safe workplaces

CV19 NEWS

• South Korea reported 13 new coronavirus cases, after marking a two-month low of only eight additional infections on Sunday.
• China reported 12 additional confirmed coronavirus cases and no deaths for April 19.

BONDS

ASIAN NEWS

• Chinese banks lowered borrowing costs and the government promised to sell another 1 trillion yuan ($141.3 billion) in bonds to pay for stimulus spending.
• China has lowered its one-year borrowing rate by 20bps.

EUROPEAN AND US NEWS

• European markets set to open around 1% higher.
• China Development Bank has canceled an order for 29 Boeing 737 Max planes, worth at least US$2.9bn.
• Big falls in WTI but Brent holding up better. Short term storage an issue with near month WTI futures.

• Jim McDonald from Northern Trust is very bullish on US stocks. He manages over US$1 trillion.

• EU leaders will hold a Zoom meeting on 23^rd April.

And finally…

 

Clarence

XXX