ASX 200 up 74 points to 5320 (+1.4%). A weak start following Wall Street and WBC numbers saw bargain hunters step back in after the rout Friday. Banks were the focal point led by CBA up 1.9% and WBC up 2.8% after a deferral of the dividend. The Big Bank Basket rallied to $108.26. Insurers fared worse with IAG down 2.1% and QBE down 2.2%. Healthcare better led by CSL up 2.9% and RMD rallying 1.9%. Industrials were a bright spot today with TLS up 3.0% and TCL up 2.8% following an investor briefing. Miners lipped slightly with BHP up 0.1 % and RIO falling 1.6%. Oil stocks too back in the doghouse WPL down 0.8% and ORG down 0.2%. Gold miners were the go with a good rise in AUD bullion, NCM up 6.6% and EVN up 7.0%. Tech stocks were kicked higher by the APT news of Tencent taking a 5% stake. APT rose 23.8% to a two month high followed by Z1P up 5.9% and WTC joining in the fun up 4.7%. In corporate news, WBC ‘shocked’ the market with a big 62% drop in net profits and a deferral of dividends. In other news, QUB returned having raised $264m and the stock ex-entitlement today. On the economic front, job ads fell 53% and housing approvals dropped 4%. The AUD remains under some slight pressure down to 63.80c and the 10- year yield down to 0.83%. Asian markets were disrupted by China anbd Japan on holidays, Hong Kong returning after Fridays holiday and playing some catch up and falling 4%.
- ASX 200 up 74 to 5320 in promising turn around. Normal volume.
- High 5328 Low 5170. All tech index up 3.46%.
- Big Bank Basket rallies to $108.26.
- Dow futures down 189.
- WBC defers dividend. APT leads market higher.
- Healthcare does well. Industrials in the frame.
- Gold miners doing well as AUD bullion rises.
- 10-year bond yields slip to 0.83%
- AUD slips to 63.80c.
- Aussie gold rallies to $2657
- Bitcoin steady at US$8722 ahead of halving.
- Asian markets muted with China and Japan on holidays. Hong Kong coming back online down 4%.
- APT +23.80% Tencent takes 5%
- AX1 –6.87% business update weighs.
- Z1P +5.86% dragged higher by APT/Tencent.
- LOV -5.48% profit taking.
- WEB -5.61% under pressure again.
- QUB +17.72% successful capital raising.
- WAF +10.14% gold stocks rally.
- GOR +8.16% NST+5.87% EVN +6.99% AUD bullion bounce.
- WOR -4.71% oil price weakness. MS cuts PT.
- HLO -11.73% travel stocks seeing no benefit of opening up.
- CDV +14.08% company update.
- ADH -3.92% stores to reopen.
- SKO -4.78% change in substantial holding
- ISX – suspension remains after ASX correspondence.
- LLC +1.47% Macquarie upgrades.
- TYR +2.21% Macquarie says underperform.
- ING -0.88% wary about outlook.
- SYR -4.26% restarts US operations.
- Speculative stock of the day: Nothing special today.
- Biggest Rises: APT, QUB, WAF, GOR. WGX, SAR and EVN.
- Biggest Falls: APE, OML, AX1, FLT, NWH, EOS and WEB.
- Inghams Group (ING) –0.88% Group on-track for H2 underlying EBITDA to exceed H1. New Zealand’s current financial results are ahead of last year, however, the impact of Level 4 restrictions (now relaxed to Level 3) on the poultry market and operations in NZ mean there is less certainty surrounding the result. In Australia, restrictions created a temporary surge in retail sales in March and early April, but consumer behaviour has now normalised. Notes a strong balance sheet with good access to liquidity and funding.
- Westpac (WBC) +2.80% H1 net profit attributable to owners down 62% to $1,190m vs year ago. Impairment charges related to COVID-19 and costs associated with AUSTRAC proceedings weighed heavily. Impairment charges totalled $2.24bn vs year-ago $333m. Dividend deferred. Net interest margin 2.21% vs year-ago 2.19%. CET1 ratio 15.81% vs year-ago 16.17%. The bank also mulled the sale of businesses that present more risk than reward, such as life insurance and wealth platforms.
- Flight Centre (FLT) – total transaction value (TTV) at 5-10% of normal levels during April. Currently tracking towards target of $65m per month cost base. Coronavirus refund and cancellation fee policy updated to deliver more options and better outcomes to its customers.
- Insurance Australia Group (IAG) –2.14% notes there is limited scope to pay a final dividend in September after applying its 60-80% full year cash earnings pay-out policy and after allowing for the 10c March dividend. At the end of April, investment income on shareholders’ funds amounted to a loss of approximately $280m pre-tax. FY20 guidance of ‘low single digit’ gross written premium growth and a reported insurance margin of 12.5-14.5% retained.
- Lynas Corp’s (LYC) -0.87% Malaysia plant restarting today at ~70% of capacity.
- Adairs (ADH) -3.92% to commence reopening stores 7-May. Conference call today at 11:00 am. Total Australian sales (37%) for this period vs last year. Online sales have exceeded expectations since stores closed, +221%. Notes no current requirements or plans to increase debt facilities or raise capital.
- Charter Hall Social Infrastructure REIT (CQE) – launches $100m placement and $15m unit purchase plan. Placement priced at $2.20/unit. Has experienced no closures of its childcare centres due to the outbreak. Received 100% of expected rental payments from tenants for the month of March and 90% of expected rental payments from tenants for the month of April. FY20 earnings and distribution guidance remains withdrawn. Intends to pay a June quarterly distribution with reference to CQE’s operating cash flows for the period.
- Building Approvals fell 4% in March vs expectations of a 15% fall. The reading shows little influence from COVID-19.
- The Melbourne Institute’s headline inflation gauge fell 0.1% in April. Over the year the index is up 1.2%.
- ANZ job ads fell 53.1% in April, following a 10% fall in March. Almost five times the previous record monthly fall of 11.3% in January 2009, during the GFC.
- New Zealand recorded no new coronavirus cases.
- Peru will lift restrictions on mining and other industries this month.
- France reported 135 new deaths in the past 24 hours, the fewest since March 22
- Purchasing managers indexes across Southeast Asia slumped further below 50, the dividing line between contraction and expansion, to post their weakest readings since the series began, according to data released by IHS Markit on Monday. Taiwan, Japan and South Korea dropped to their lowest levels since 2009.
- Hong Kong 2020 GDP to fall between 4% -7% according to government. No news cases in last two days.
EUROPEAN AND US NEWS
- European markets expected to open slightly lower. 4m Italians back to work today.
- Buffet sells all his airlines and doesn’t see anything worth buying at present.
- Trump ramps up pressure on China. New tariffs could be applied.
- President Donald Trump, asked if he will use tariffs to punish China for the coronavirus pandemic, said they would be “the ultimate punishment.
- According to some reports and Trump, China hid the severity of CV19 so it could buy up all the supplies.
And finally….here is a link to a Podcast that I did last week with Julia Lee from Burman Investment.
Women really know how to hold a grudge. My wife asked me to pass her a lip balm. And by mistake, I gave her a tube of Super Glue. It’s been a month now and she’s still not speaking to me!
I proposed to my ex-wife. But she said no. She believes I’m just after my money.
Two elephants meet a totally naked guy. After a while one elephant says to the other: “I really don’t get how he can feed himself with that thing!”