The ASX 200 grinds out a 11-point advance to 5966 in conviction-less trade. Dow Futures up 55 points. Another day when the market has struggled to find direction although buyers won out in the end. Banks weaker with the Big Bank Basket down to $124.68 though CBA fought the good fight and rose 0.3%. Miners were better with BHP up 0.7% and FMG up 1.6% on higher iron ore prices. Gold miners shimmered with NCM up 2.5% and EVN up 6.65% together with DEG putting on another 24.6%. Energy stocks in the doldrums, WPL down 1.6% and STO down 1.6% and OSH falling 3.2%. Healthcare stocks doing well as defensives in demand, CSL up 1.1% and SHL up 4.7% after a business update. Bond proxies still under a little pressure after the TCL update a few days ago, TCL down 3.3% and SYD down 2.0%. Other defensives slipped slightly with WOW down 0.7% after imposing some product restrictions in Victoria and WES down 0.05%. In the tech sector, the APT juggernaut keeps on rolling up 0.35% with XRO up 2.1% and TNE up 1.9%. REA had a lousy day down 3.3% on some broker comments. The All Tech Index rallied 0.77%. In corporate news, BGL rushed 11.3% higher after some good drilling results, whilst FNP seems to have entered the twilight zone of an Oscar Wilde scenario when losing one executive is a misfortune and both is carelessness but FNP seems to have lost a whole C-Suite. Fell hard by 14.5% and now suspended pending more. APA up 4.0%, announced a H2 distribution of 27c. VRL is down 2.7% on its reopening announcement. MGR unchanged as preliminary valuations suggesting a 2.8% fall in book value vs December 19. CSR is down 1.3% on AGM comments, In economic news, RBNZ kept rates on hold. The 10-year yield is around 0.91% and AUD is slipping just below 69c. Asian markets slightly positive as Japan up 0.03% and China up up 0.36%.

Today’s Highlights

• ASX 200 gains 11 points to 5966. Low volume.
• High 5993 Low 5942. Narrow range.
• Big Bank Basket steady at $124.68
• All Tech Index up 0.77%
• 91 trading days until the US election.
• Dow Futures up by 55 points.
• 10-year bond yields steady at 0.91%
• AUD slips to 68.98c
• Aussie gold steady at $2542.
• Bitcoin steady at US$9624
• Asian markets slightly positive with Japan up 0.12% and China up 0.42%

STOCKS

• FNP -14.49% a fiasco today. Management announcement and then a long-awaited trading halt.
• BGL +11.32% good drill results.
• AEF -9.94% sell off continues.
• LOV -3.77% not feeling much at the moment.
• DEG +24.63% positive broker sentiment following drilling update at Hemi.
• SHL +4.73% trading update.
• AVHDA -6.67% 20 :1 consolidation as calls America home.
• ALG +1.12% QLD theme parks to reopen July 15^th.
• WOW -0.71%% hoarding is back. 2 toilet rolls and sugar pasta and mince rationed.
• CMW – tells shareholders to reject offer.
• RED -34.33% production guidance slashed.
• FAR -14.29% Sangomar Project update.
• SWF -3.81% profit taking.
• SMP -9.42% FY presentation.
• TLG +34.88% commercial progress drives Anode expansion plans.
• WZR +12.20% back on the rally mode.
• TCL -3.31% redemption of EUR500m 2.5% bond.
• DXS +0.90% sells office block for $530m.
• TPM +0.45%% shareholder approval for merger.
• Speculative Stock of the Day: Paragon Care (PGC) +79.17% solid improvement on May and June numbers with revenues likely to exceed $220m (FY $236m). Staff back to 100% of pay and hours.
• Biggest Rises: DEG, ALK, BGL, PNI, IRI, PRU, PAR and PPH.
• Biggest Falls: RED, FNP, AEF, MAH, SNZ, VGI, IFT and GMA.

TODAY

• APA Group (APA) +3.99% Reports H2 distribution of 27c/unit, in line with guidance.
• Coronado Global Resources (CRN) -1.44% Anticipates FY20 total saleable production in the range of 16.5-17m tonnes. Announces Greenbrier impairment between US$60-70m. The Greenbrier mine in the US is expected to remain idle for the remainder of the year until met coal prices recover.
• New Energy Solar (NEW) +0.84% Announces H1 distribution 3c/share, unfranked. To sell a 50% interest in Mount Signal 2 in California to NextPowerIII for US$52m. Once the transaction is complete, NEW will consider a range of capital management initiatives including security buybacks, special dividends and/or repayment of shorter-term debt. H1 underlying earnings anticipated to be lower than expected. Unseasonal weather and heavy rainfall in North Carolina and NSW, combined with performance issues at the newly commissioned plants at Beryl, NSW and Mount Signal 2 (MS2), California weighing on performance.
• Mirvac (MGR) – Announce H2 distribution of 3.0c/security. Preliminary valuations (excluding IPUC) for June 30 across 63 assets indicate a reduction in value of $306m, or ~2.8% compared to the book value at the end of December. The group has cash and undrawn debt facilities in excess of $1.3bn with only $200m of debt due for repayment between now and early 2022.
• Sonic Healthcare (SHL) +4.73% Expects FY20 underlying EBITDA to be similar to last year’s statutory EBITDA of $1.075bn vs consensus $990m. Trading for March and April were substantially below forecast, May results stronger than expected. This positive trend has continued through June to date. Not in a position to provide FY21 guidance.
• CSR (CSR) -1.31% For the first 11 weeks of the current financial year (on a like for like basis), building products revenues in Australia are down 3%. Including the impact of New Zealand COVID-19 restrictions, the decline is 5%. Anticipates a slowdown in demand this year, however, the timing and extent is uncertain.
• Village Roadshow (VRL) –2.70% Gold Coast theme parks have had their COVID Safe plans approved by the Queensland Government and are able to reopen under those plans at up to 50% capacity. Sea World and Paradise Country will reopen on Friday 26 June, Australian Outback Spectacular on Friday 3 July and Warner Bros. Movie World and Wet’n’Wild on Wednesday 15 July.
• Charter Hall Retail REIT (CQR) +1.13% Estimates H2 distribution of 10c/share.
• TPG Telecom (TPM) +0.45% Shareholders approve the proposed merger with Vodafone Australia. TPM shareholders to receive a special dividend before the completion of the deal in July.
• Bellevue Gold (BGL) +11.32% Exceptional results from metallurgical tests, including Exceptional gravity-only component recovery from all lodes with results ranging from 73.6% to 91.7%. Drilling from underground set to start in December quarter, 2020. 10,000m regional discovery drilling has commenced along the highly prospective 20km Bellevue mineralised corridor.

ECONOMIC NEWS

• RBNZ keeps rates on hold. The bank said it would continue with its ‘Large Scale Asset Purchase’ (LSAP) program in order to keep interest rates low for the foreseeable future. The LSAP quantum remains set at NZ$60bn.

COVD-19 NEWS

• Top U.S. health officials told lawmakers that they haven’t discussed the Covid-19 pandemic with President Donald Trump for more than two weeks
• Cases are surging in Texas, Florida, Arizona and in California, which on Tuesday broke its record for new cases for the fourth day in the past week.
• Coronavirus cases in the U.S. increased by 35,695 from the same time Monday to 2.33m.
• Texas recorded more than 5,000 new cases in the past 24 hours, a record daily toll.
• Caesars Entertainment said it has been handing out US$20 in gambling credit to guests wearing masks at five of its Las Vegas casinos.
• Locally Victoria had 20 new cases in the past 24 hours and one man in his 80s died. 103 now the grim toll.

BONDS

ASIAN NEWS

• Asia excluding Japan stocks are set to outperform other emerging markets in the second half of 2020 according to Credit Suisse Group AG. CS prefers Hong Kong and Indonesia on valuations; “Indonesia is about an economy that has been beaten down a bit and should, especially at a consumer level, recover in the second half of the year.”

• In Japan, almost 40% of the funds budgeted for cash handouts to households still haven’t reached people despite their approval in late April. Also business loans and job-protection subsidies saw only 14% of around US$920bn earmarked for smaller firms lent out and just 5.8% of aid to companies maintaining their payrolls.

EUROPEAN NEWS

• Wirecard (someday there will be a great film out of this) is in danger of losing its licence as backers pull the pin on the missing US$2.2bn. Both Visa and Mastercard are reviewing their agreements with Wirecard. The company was the pin up child for the German fin tech sector. Finance Minister Peter Altmaierhad this to say “we cannot allow individual companies to destroy the reputation of an entire industry and thus damage the country.” Too late.
• The European Union may decide to keep the door shut to Americans when the bloc eases controls on its external borders.
• Carnivals Credit ratings cut to junk by S&P.
• Boris Johnson urges people to get tested if they feel sick.

And finally…look away children if easily offended…thanks Keith

A businessman sends his wife a text message

‘You will surely understand that I have certain needs that you with your 54 years can no longer satisfy. I am very happy with you and value you as a good wife, therefore, after reading this fax, I hope you will not wrongly interpret the fact that I will be spending the evening with my 18 year old secretary in the Comfort Inn Hotel. Please don’t be perturbed. I shall be back home before midnight.’

When the businessman came home, he found the following note on the dining-room table

Dear Husband

I received your text and thank you for your honesty.

I would like to take this opportunity to remind you that you are also 54 years old. I would like to inform you that while you read this, I will be in the Hotel Fiesta with Michel, my tennis coach, who like your secretary is also 18 years old.

As a successful businessman with an excellent knowledge of maths, you will understand that we are in the same situation … although with one small difference . . .

. . .  18 goes into 54 more often than 54 goes into 18!  Therefore, I won’t be back before lunchtime tomorrow!

 

 

Clarence

XXX