ASX 200 finished unchanged at 5221 after an early sell-off failed to follow through but buyers retreated at close. Dow futures switched between positive and negative and currently up 112 points. After an initial loss, the market fought back strongly and despite a mid-afternoon wobble closed nearly in the green. Banks were the turnaround story. The Big Bank Basket closed at $106.51. CBA up 1.1% and NAB up 1.7%. Healthcare was mixed as RHC went to the market for $1.4bn to give it balance sheet flexibility. CSL rose 2.1% but elsewhere SHL fell 2.1% and RMD slipped 2.0%. Miners were a sour sector, BHP dropped 3.6% and FMG eased 1.35% on iron ore falls whilst gold miners gave back some recent gains with NCM down %. Energy stocks remain highly volatile given the shenanigans happening in oil futures and ETFs. A flash crash every day it seems in derivatives and ETF products. WPL fell 1.5% and STO dropped 0.5%. Consumer stocks made the most of the buoyant retail sales numbers showing just how many toilet rolls we all bought ahead of lockdown. Nothing like it since the introduction of the GST. WES up 0.4% and WOW up 0.8%. In tech stocks WTC surprised the market with a positive update and rallied 16.8%, The All Tech Index rallied 0.08%. In corporate news, RHC tapped instos for $1.2bn and an SPP of $200m. More background noise on Virgin as bald men fight over a comb. In economic news, retail sales showed the hoarding, plus the government revealed plans for a strategic oil reserve. In America. Not sure how strategic that is. The 10-year yield slipped to 0.83% and the AUD was slightly weaker at 63.31c. Asian markets were mixed as Japan fell 0.63% and China rose 0.4%.

• ASX 200 closes unchanged at 5221. Late wimp leaves it unchanged.
• High 5248 Low 5101. Rocky like recovery. Solid volume.
• Banks rally from lows. Bank Basket $106.51
• CSL doing well.
• Miners under pressure.
• Energy stocks still weak but could have been worse.
• Dow Futures up 112
• 10-year bond yields slip to 0.82%
• AUD slips to 63.31c.
• Aussie gold slips to $2669
• Bitcoin steady at US$6881
• Asian markets were mixed as Japan fell 0.63% and China rose 0.4%.

STOCKS                                               

• KGN +5.14% feeling the love.
• BAP +3.78% buyers bounce back.
• MYR +5.56% business update.
• SYR -4.65% graphite production down 20%
• PNC -11.11% Carlyle scheme terminated.
• OSH -3.60% CS lifts to neutral.
• ORE +0.97% lithium market warning.
• VAH – Moodys cuts credit to negative.
• QAN -6.41% VAH administration woes.
• AVH +9.30% US rethink.
• GLL -25.00% drilling update.
• FDV +14.93% online activity grows.
• AVG +11.54% vintage update.
• LEG -8.11% massive nickel sulfides.
• Speculative stock of the day: Lithium Consolidated (L13) +200.00% a large gold anomaly at Warrieddar. Very early days. Li3 conducted a reconnaissance geochemical and geological mapping program at the company’s Warriedar West Prospect within the Murchison region of Western Australia. Large 5km x 2km gold and gold pathfinder element anomaly identified
• Biggest Rises: WTC, PNI, AVH, RMS, VOC, SPK, KGN and SUL.
• Biggest Falls: EBO, AIZ, QAN, NWH, FLT, ERA, COE and WEB.

TODAY

• Ramsay Health Care (RHC) – to raise $1.2bn via underwritten institutional placement at $56.00/share to follow with SPP to raise up to an additional $200m. Funds will initially be used to partially repay revolving debt facilities which will remain available for redraw. Ramsay has determined to temporarily suspend ordinary share dividend payments.
• Beach Energy (BPT) -3.88% Q3 production 6.94mmboe vs year-ago 7.23mmboe. FY20 guidance is unchanged. Underlying EBITDA expected at the lower end of the current range. Review of FY21 work program underway, targeting a deferral of up to 30% of previously planned CAPEX.
• HUB24 (HUB) +3.59% reports FUA of $15.10bn at March 31 vs quarter-ago $15.84bn. Net Inflows $1.36bn vs quarter-ago $1.26bn. Notes revenue will be hit by the low RBA cash rate. Increasing transactional revenue, changes in portfolio asset composition, and the effect of tiered administration fees will help to soften the impact.
• Orocobre (ORE) +0.97% reports Q3 lithium production down 11% to 2,732t vs quarter-ago. A temporary plant shutdown hurting production. Sales revenue US$12.1m vs quarter-ago US$17.8m. Gross cash margins (excluding export tax) of US$838/t vs quarter-ago US$1,310/t. Cash costs $3,972/t vs quarter-ago $4,109/t. Withdraws FY20 guidance.
• Spark New Zealand (SPK) +5.69% Notes a strong first half with most COVID-19 impacts only appearing in Q4. Travel restrictions have reduced higher-margin mobile roaming revenues. Retail revenues have also declined. The business will implement a business-wide cost review to mitigate impacts from the outbreak. Reaffirms FY EBITDAI guidance between NZ$1.10-1.12bn, CAPEX of NZ$370m and distribution of NZ$0.25.
• The a2 Milk Co. (A2M) +1.69% Revenue for Q3 was above expectations, reflecting changes in consumer purchase behaviour. China segment revenue was helped by currency tailwinds. Overhead costs are tracking lower than previously expected due to travel restrictions and some planned recruitment, particularly in China, being temporarily delayed. Guides FY20 revenue between $1.7-1.75bn. EBITDA margin guidance lifted to 31-32% vs previous guidance of 29-30%. Reaffirms medium-term EBITDA margin target of 30%.
• Atlas Arteria (ALX) +1.62% Reports Q1 weighted average toll revenue (6.8%) vs March Q 2019. Weighted average traffic (8.8%) vs a year ago. Notes it remains well-positioned in terms of its liquidity.
• Nine Entertainment (NEC) –0.86% The NRL is reportedly in talks with NEC and Fox on a three-year broadcast extension. The extension is rumoured to be worth less per annum than the $325m Fox and Nine currently pay.
• Sigma Healthcare (SIG) -1.65% Chairman Brian Jamieson to retire following May 13 AGM. Ray Gunston appointed as his successor. Gunston has been a Sigma Director since July 2010 and is the current Chairman of the Risk Management and Audit Committee.
• Challenger (CGF) -0.91% reports Q3 total life sales $949m vs year-ago $870m. Total annuity sales down 10% to $593m vs year ago. Recorded funds management net outflows of $2.3bn. Total assets under management fell 8% to $79bn vs quarter ago. Reaffirms FY guidance, pretax income expected between $500-550m.

ECONOMIC NEWS

• The Evidence of Hoarding: Australian retail turnover rose 8.2% in March 2020, seasonally adjusted, according to preliminary retail trade figures released today by the ABS.
• This is the strongest seasonally adjusted rise ever published in the Retail Trade publication, surpassing an increase of 8.1% in June 2000 when households brought forward expenditure ahead of the GST implementation.

• Supermarket and grocery store data shows that monthly retail turnover for perishable groceries and all other groceries increased by 21.6% and 35.6% respectively in March compared to February.
• Monthly turnover for canned food, medicinal products and cleaning goods (hani sani) increased by more than 50%.
• Gains in food and alcohol “were slightly offset by strong falls in industries including cafes, restaurants and takeaway food services, and clothing, footwear and personal accessory retailing, which were impacted by new social distancing regulations introduced in March.”
• Analysts are expecting a huge fall in the next set of numbers given many pantries are now full. The last record jump in retail sales in June 2000, before the introduction of GST, was followed by a 10.6% collapse in July 2000.
• Westpac MI’s leading index fell to -2.47% in March, from -0.97% in February.
• Citi’s economics team sees “serious payback in April,” after March’s super-strong retail sales data. Citi expects final household consumption to fall by 14% in real terms in the second quarter, taking 7.4% off Q2 GDP growth.
• We are outsourcing our strategic oil reserves by leasing space in the US. Interesting as the US is a bit low on storage.

CV19 NEWS

BONDS

ASIAN NEWS

• HK CEO Carrie Lam shuffles the deckchairs with five changes.
• South Korean President Moon Jae-in ordered the government to draw up a third extra budget to help key industries. Where is Kim? Where’s Wally?
• Bad debt at Chinese banks climbed in the first quarter with the non-performing loan ratio rose to 2.04% at the end of March, the China Banking and Insurance Regulatory Commission said
• The Samsung S&P GSCI Crude Oil ER Futures ETF, which held more than US$500m worth of the derivatives as of April 20, lost nearly half its value in Hong Kong on Wednesday.Oil ETFs taking a hit in HK. ETFs adding to volatility.

• The United States Oil Fund which is the biggest ETF tracking crude prices has suspended the issuance of new shares after losing 30% of its value in two days. No issuance and it becomes detached from markets it is supposed to mirror. Not what you want.
• US WTI futures require delivery into the nearly full Cushing oil hub in Oklahoma.
• Global storage is now becoming a problem with June futures now a 40% chance of going to zero.

EUROPEAN AND US NEWS

• Modest rises expected at European markets open.
• Macy’s is looking to raise as much as US$5bn in debt by using inventory as collateral for US$3bn, and real estate to bring in US$1bn to US$2bn.
• President Donald Trump said he’ll ask larger companies to pay back monies they accessed which were supposed to go to small business. Harvard Uni has apparently asked for money that it didn’t deserve.
• IBM withdrew financial guidance for the rest of the year as it revealed that the coronavirus crisis had taken a bite out of its software sales
• Facebook buys a US$5.7bn stake in India’s Reliance Jio.

 

And finally…

THIS IS SUCH A TOUCHING STORY, I THOUGHT YOU WOULD ENJOY IT.

BACK ON JANUARY 9TH, A GROUP OF PEKIN, ILLINOIS BIKERS WERE RIDING WEST ON I-74 WHEN THEY SAW A GIRL ABOUT TO JUMP OFF THE MURRAY BAKER BRIDGE.  SO THEY STOPPED.

GEORGE, THEIR LEADER, A BIG BURLY MAN OF 53, GETS OFF HIS HARLEY, WALKS THROUGH A GROUP OF GAWKERS, PAST THE STATE TROOPER WHO WAS TRYING TO TALK HER DOWN OFF THE RAILING, AND SAYS,

“HEY BABY…..WHATCHA DOIN’ UP THERE ON THAT RAILIN’?”

SHE SAYS TEARFULLY, “I’M GOING TO COMMIT SUICIDE…!!”

WHILE HE DIDN’T WANT TO APPEAR ‘SENSITIVE’, GEORGE ALSO DIDN’T WANT TO MISS THIS ‘BE-A-LEGEND’ OPPORTUNITY EITHER SO HE ASKED…”WELL, BEFORE YOU JUMP, HONEY-BABE… WHY DON’T YOU GIVE OLE GEORGE HERE YOUR BEST LAST KISS?”

SO, WITH NO HESITATION AT ALL, SHE LEANED BACK OVER THE RAILING AND DID JUST THAT… AND IT WAS A LONG, DEEP, LINGERING KISS FOLLOWED IMMEDIATELY BY ANOTHER EVEN BETTER ONE.

AFTER THEY BREATHLESSLY FINISHED, GEORGE GETS A BIG THUMBS-UP APPROVAL FROM HIS BIKER-BUDDIES, THE ONLOOKERS, AND EVEN THE STATE TROOPER, AND THEN SAYS,

“WOW! THAT WAS THE BEST KISS I HAVE EVER HAD, HONEY! THAT’S A REAL TALENT YOU’RE WASTING, SUGAR SHORTS.   YOU COULD BE FAMOUS IF YOU RODE WITH ME.  WHY IN THE WORLD ARE YOU COMMITTING SUICIDE?”

“MY PARENTS DON’T LIKE ME DRESSING UP LIKE A GIRL.”

IT’S STILL UNCLEAR WHETHER SHE JUMPED OR WAS PUSHED.

 

Clarence 

XXX