ASX 200 up another 76 points (1.3%) to 5851 but well off its highs. Hong Kong a concern and social media moves. Dow futures up 239 points. Banks and financials were once again the stars as have the most leverage to an economic uptick. The Big Bank Basket rose to $121.65 with CBA up 2.2% and NAB up 4.7%. In other financials MFG continues to show a green pair of heels up 1.0% and MQG up 1.6% together with insurers QBE up 4.0%. Tech stocks withered on the vine today as JCap launched another attack on WTC down 5.8% following a renegotiation of takeover terms. In the miners BHP rose 2.0% and FMG back up 3.4% on better iron ore prices with gold miners faring better as the AUD came under a little pressure. NST up 2.1% and NCM up 0.8% with energy stocks off as WTI weakened. In industrials we had a mixed sessions CSL fell 0.2%, REITs dropped and TAH fell 2.4%. Tech stocks flat lined with the Index off slightly as WTC fell 5.8% and APT rose 1.9% as the company cautioned against regulation. In corporate news, NWS rose 1.1% after announcing closures and job cuts, NEA rose 16.7% on a positive update and CRN saw its CFO resign, the stock rose 6.5%. ALX in a trading halt with a cap raise at 620c. In economic news, Phil Lowe was the focal point as he said the economy may not be as bad as some thought but urged against negative rates and suggested that stimulus should be extended. The 10-year bond yield was steady at 0.87% and the AUD came under a little pressure around 66c. Meanwhile in Asia, Hong Kong remains a flash point waiting for a flash, down 1.4% and China slipped 0.4% with Japan up by 1.7%.
- ASX 200 up 76 to 5851. Good volume.
- High 5922 Low 5798. Runs out of some puff.
- Big Bank Basket $121.65 kicking again.
- Financials shine. Mixed elsewhere.
- Chinese People’s Congress finishes today.
- All Tech steady. WTC attacked again.
- Dow Futures up 239
- 10-year bond yields unchanged at 0.87%
- AUD slips to 65.97c.
- Aussie gold rises to $2600 as AUD falls.
- Bitcoin rallies to US$9172
- Asian markets mixed Hong Kong down 1.4% and China slipped 0.4% with Japan up by 1.7%.
- STO -3.20% completes acquisition at better terms.
- WTC -5.77% JCap is back.
- NEA +16.67% strong update.
- MGX +8.59% iron ore catch up.
- APE +5.85% reopening hopes.
- VUK +10.14% banking short squeeze.
- JIN -7.18% broker downgrades.
- WEB -4.64% profit taking.
- PNV -0.38% director sales.
- RCE -12.90% zoom presentation.
- EOS -2.43% completes acquisition of space business.
- ASB +4.12% trading halt pending earnings update. Will not be good.
- BGL +11.11% good drilling results.
- WGN +25.00% cementing its place with concrete results.
- CWP +7.39% positive recovery story.
- AXE -8.76% placement.
- IGL +9.18% advertising is back.
- FPH -3.59% rotational selling pressure.
- APT +1.86% pushes back on regulation calls.
- NHC +5.0% warns on lower coal prices.
- NWS +1.09% closing regional titles.
- Speculative Stock of the Day: No standouts on volume.
- Biggest Rises: NEA, PAR, VUK, MGX, CRN, GWA and LLC.
- Biggest Falls: JIN, BPT, WTC, WEB, COE, VCX and WOR
- Emeco Holdings (EHL) +2.84% Guides FY20 operating EBITDA between $244-247m. Expected net debt/Operating EBITDA as of June 30 remains at ~1.5x. COVID-19 has hit 2H20 earnings through additional costs and the fall in coal price resulting in a reduction in utilisation in the Eastern Region. The Western Region and the Force Workshops continue to perform well. The recently acquired Pit N Portal business has performed in line with expectations and is seeing a strong tender pipeline.
- WiseTech Global (WTC) -5.77% Renegotiates earnout arrangements for a number of strategic acquisitions with vendors set to receive equity rather than cash. The changes result in a reduction in contingent liabilities from $215.5m to $68.5m. Removal of $151.5m of future contingent cash liabilities and equity issuance of $81.4m of which $45.7m remains escrowed for 12 months.
- Atlas Arteria (ALX) – Launches $420m placement and $75m SSP priced at $6.20/security. Funds to be used to replay a €350m debt facility. Traffic, particularly light vehicles, reduced significantly from mid-March when COVID-19 lockdown measures were enforced by the French government. Its APRR toll road in France accounts for 85% of revenue. Traffic in heavy vehicles, which are subject to higher tolls, has been more resilient. Traffic has rebounded strongly since the first phase easing of restrictions on 11 May, with further easing to come. H2 distribution now cancelled, was previously deferred.
- Bendigo & Adelaide Bank (BEN) +4.13% Lifts its COVID-19 related provision by $148.3m. The additional overlay is made up of an increase to the collective provision and FY20 credit expense of $127.7m and the general reserve for credit losses (GRCL) of $20.6m. The overlay will decrease the group’s CET1 capital ratio by 40bp to a proforma CET1 of 9.30% as of March 31.
- Nearmap (NEA) +16.67% Annualised Contract Value (ACV) continues to improve, now over $102m (at constant currency). Narrows FY20 ACV guidance to $103-107m vs prior $102-110m. Closing FY20 group cash balance expected to be between $32-35m. On track to be cash flow breakeven by June 30. Twelve-month rolling churn below 10% vs 11.5% as reported at the end of 2019.
- Coronado Global Resources (CRN) +6.48% CFO Ayten Saridas resigns to pursue another opportunity. Saridas will support the Company during a period of transition.
- Blackmores (BKL) +3.26% Completes $92m institutional placement at 7250c.
- The first quarter private capital expenditure survey showed a 1.6% quarter-on-quarter drop in overall private capex.
- Expectations of future capital investment plunged, with the sixth estimate of total nominal capital expenditure in 2019-2020 falling by a record 5.6%.
RBA Governor Phillip Lowe spoke in front of a Senate committee on COVID-19. Click here to view the full release.
- “April jobs data was “shocking set of numbers” but not as bad as he feared”
- “With the national health outcomes better than earlier feared, it is possible that the economic downturn will not be severe as earlier thought.”
- “Since Statement on Monetary Policy things have tracked fractionally better than baseline scenario.”
- “Very important that we don’t withdraw the fiscal stimulus too early.”
- “The economy is doing better than earlier feared.”
- Reiterated that costs of negative interest rates on financial system exceed benefits. Stressed the benefits of infrastructure spending.
- Lowe said negative rates would hurt bank profitability, which would prevent them lending.
ABS has released its Business survey on CV19 Impacts
- US hits 100,000 deaths ahead of forecasts. Only 60% of population say they would get vaccinated.
- South Korea reported its biggest spike in new coronavirus cases in nearly two months
- HK would lose US tech access and face tariff threat if US status revoked, says Capital Economics.
- The Bank of Korea’s policy board voted to cut the benchmark interest rate a quarter of a percentage point to 0.5%, the lowest since the bank adopted the current policy system in 1999. The bank downgraded its 2020 economic projection to a 0.2% decline, from its February forecast for 2.1% growth.
- More protests in Hong Kong.
- Modest gains for European equities.
- Carl Icahn sells out of Hertz and rips up US$2bn in the process. Sells entire holding at 72c around 39% of the stock.
- US says Hong Kong autonomy is over. Trade deals in question.
- Trump threatens social media sites with ‘unspecified measures’ after a fact checker appeared on his tweet. Apparently social media is not an instrument of free speech.
Q: Have you heard about McDonald’s new Trump Value Meal?
A: Order anything you like and the guy behind you has to pay for it.
Three contractors are bidding to fix a broken fence at Parliament House. One is from NSW, another is from Victoria and the third is from Queensland
All three go with a government official to examine the fence. The NSW contractor takes out a tape measure and does some measuring, then works some figures with a pencil. “Well,” he says, “I figure the job will run about $900. $400 for materials, $400 for my crew, and $100 profit for me.” The VIC contractor also does some measuring and figuring, then says, “I can do this job for $700. $300 for materials, $300 for my crew, and $100 profit for me.” The QLD contractor doesn’t measure or figure, but leans over to the government official and whispers, “$2,700.” The official, incredulous, says, “You didn’t even measure like the other guys! How did you come up with such a high figure?” The QLD contractor whispers back, “$1000 for me, $1000 for you, and we hire the guy from NSW to fix the fence.” “Done!” replies the government official. And that, my friends, is how the new stimulus plan will work.