Friday 19th June – Australian Market Wrap | Beeks Downunder-Because not all financial news is boring!

The ASX 200 finished up 6 points to 5943 after a day-long rally gave way to profit taking ahead of the weekend. Index up 1.6% for the week. Quadruple witching in the US tonight and Dow Futures up Points. Retails sales number shot the lights out helping retail stocks and both NCK and ADH gave solid and better than expected sales update. ScoMo said the country was under cyberattack but gave no details and seemed weird timing given it has been going on for months. Banks gave up early gains and struggled with CBA down 0.5% and NAB down 0.6% with the Big Bank Basket down to $124.27. Other financials fared better with AEF going well up 12.25% now trading at galactic valuation levels. Big miners slipped as iron ore prices in Asia came under a little pressure, BHP down 1.9% and FMG down 1.5%. Other miners also slipped with S32 down 3.2% and gold miners going nowhere in a hurry. Oil stocks remain bid with WPL up 0.6% as it expressed an interest in Chevron’s NW Shelf holdings. REITs were mixed with GMG better by 1.4% though SCG fell 4.7% despite retail sales bouncing back hard. In bond proxy stocks TCL hitting highs with a 3.1% rise though SYD slipped on passenger numbers dropping another 2.1%. No passengers no revenue. Healthcare took a breather as once again tech shone through. The All Tech Index rose another 1.75% with APT up 1.5% and XRO up 0.5%. SPT rose a more modest 6.9% today after a big early run and WTC up 7.8%. In corporate news, both NCK and ADH shot the lights out with business updates. ORA went ex-capital return, CDV got an all cash 60c bid from a Chinese group. In economic news, the retail sales numbers showed a terrific bounce back up 16.3% in May as stuck at home shoppers opened their wallets to soft furnishings. Cocooning it seems. The 10-year bond fell to 0.85% and the AUD relatively steady at 68.57c. Asian markets better with Japan up 0.6% and China up 1.2%

Today’s Highlights

ASX 200 rises 6 to 5943.
High 6006 Low 5929. Market loses faith ahead of weekend.
ASX 200 up 1.64% this week.
PM announces cyber offensive. Nothing new at all.
Big quadruple witching tonight in US.
Big Bank Basket bought back up to $124.27
All Tech Index up 1.75%
94 trading days until the US election.
Dow Futures up slightly by points.
10-year bond yields steady down to 0.85%
AUD steady slips to 68.57c.
Aussie gold rises slightly to $2519.
Bitcoin slips to US$9405.
Asian markets better with Japan up 0.6% and China up 1.2%

STOCKS

WTC +7.78% tech stock rally continues.
ALU +6.57% NXT +4.22% playing some catch up.
CDV +27.96% cash takeover.
NCK +19.65% sofa so good.
ADH +10.53% great update.
SPT +6.91% cools slightly.
CLQ -14.29% Sunrise project update.
RFG -6.35% slide into oblivion continues.
PPT -0.73% late rally saves face.
AFG -3.22% profit taking.
WPL +0.60% considering Chevrons stake in NW Shelf.
TNT +31.73% cyber offensive helps sentiment.
MGX -3.65% iron ore slips.
AVH +8.33% been left behind in rally.
Speculative Stock of the Day: International Payment Tech (IP1) +64.71% response to ASX query. Recent investor presentation. Good name. Big volume. One to watch as only $9m market cap.
Biggest Rises: AEF, APE, NWL, AVH, WTC and PBH.
Biggest Falls: SCG, VCX, A2M, PRN, MGX and WSA.

TODAY

Nick Scali (NCK) –19.65% Has experienced a significant rebound in customer activity during May and the first half of June. Second-half sales year to date were up 7%. Expects second half NPAT growth between 15-20%. FY20 revenue expected to be in the range of $260-263m. FY20 underlying NPAT expected to be in the range of $39-$40m. To bring forward the payment of its previously-deferred dividend of 25c/share to June 29.
AMA Group (AMA) +7.81% Has performed better in terms of profitability and cash generation/use (inclusive of JobKeeper) than previously expected. While repair volumes for June are expected to remain below normal levels, AMA anticipates normal pre-COVID repair volumes to emerge by the start of Q2 FY21.
BSA (BSA) +8.00% Expects FY revenue from continuing operations between $475-475m. EBITDA from continuing operations forecast to be between $22-23m. Notes resilient performance by Connect and Fire Build divisions but observes a slowdown and deferrals in its Maintain unit. Expects demand to return through FY21. To bring forward the payment of the previously deferred 0.5c per share interim dividend to July 8. Considering capital management options.
Sydney Airport (SYD) -2.10% May traffic down 97.4% vs year ago. Domestic traffic down 97.2% to 62K passengers and International traffic down 97.7% to 29K passengers over the same period.
Evolution Mining (EVN) –0.94% FY20 Group gold production, excluding Red Lake of 715koz expected vs previously guided 725koz. A non-cash impairment estimated at between ($75-$100m) post-tax is expected to be recorded in FY20. All operations, other than Mt Carlton, are performing in line or better than plan for the June 2020 quarter. Costs are being well managed and there is no change to the FY20 Group AISC guidance, excluding Red Lake, of $990/oz. Red Lake is also performing well and is on track to deliver to the June quarter guidance of around 25,000 ounces at an AISC of $2,100 – $2,300/oz.

Arena REIT (ARF) -2.48% Reports H2 distribution of 6.85cps vs guidance 6.75-6.85cps.

Charter Hall Social Infrastructure REIT (CQE) +4.4% Declares Q4 distribution 3.475c/security.
Adairs (ADH) +10.53% Like for like sales in the 24-week to June 14 (ex-Mocka) are up 24.7%. Online sales are up 92%. Expects FY20 sales in the range of $385-390m vs consensus $360.1m.
Rio Tinto (RIO) –1.36% To undergo a board-led review into its heritage management processes after it was condemned for destroying indigenous sites in WA’s Juukan Gorge earlier this year. The final report is expected to be completed in Oct 2020.

ECONOMIC NEWS

Retail sales boomed by 16.3% in May, following a record 17.7% slump in April, May’s increase was the largest in 38 years of published surveys, with gains in every industry, the bureau said.

There were large increases in turnover in clothing, footwear and personal accessory retailing and cafes, restaurants and takeaway food services, as restrictions eased throughout the month.
Goldman Sachs now expects a 7.5% quarter-on-quarter contraction in second-quarter GDP, followed by a 4.5%rebound in the third quarter.
Morgan Stanley has now forecast that there will need to be a $27bn rise in bank provisions with NAB the most exposed. CBA is the least exposed according to the broker. It estimates the big banks have $640 billion of exposure to industries most affected by COVID-19

COVD-19 NEWS

Pakistan added 4,944 infections in 24 hours, bringing its total to 165,062. The health ministry also reported that its total number of deaths from the virus stood at 3,229.
American Airlines removed a passenger who refused to wear a face covering and banned him from taking flights in the future.
South Korea’s total tally now stands at 12,306, data from the Korea Centers for Disease Control & Prevention showed.
Beijing Capital International Airport canceled 305 inbound flights and 272 headed outbound Friday, the Beijing Daily reported.
Mexico has seen a daily record of new infections. Andrew Cuomo may force visitors to NY from Florida into quarantine and California has made masks mandatory.

BONDS

ASIAN NEWS

Colgate will overhaul its Darlie toothpaste brand in Asia.
Thailand looking at wealthy tourists rather than the mass market.
Punters are back across the globe. China’s equity traders have sent the tech heavy ChiNext index to a four year high. After gaining 4.7% this week, the measure is trading at the highest level in three years versus a gauge of large caps. Also helping sentiment is China’s push with a six-year, US$1.4 trillion plan it calls “new infrastructure” that covers a range of areas, including 5G wireless networks, autonomous driving and automated factories.