The ASX 200 dropped 50 points to 6076 (0.8%) despite attempting rallies throughout the day. Banks once again weighing heavily on the index as BEN reported and fell 6.6% after dividend was postponed, the Big Four Basket fell to $124.36 whilst insurers stumbled with QBE down 2.2% and SUN off 1.2%. Elsewhere, telcos slipped after TLS was downgraded by JP Morgan falling 1.9%, TPG fell 1.2% in sympathy and tech stocks slipped. APT fell 2.7% and XRO down 2.3%, the All Tech Index dropped 1.2%. In the miners, things were steady with BHP down 0.4% and FMG flatlining. Gold stocks slipped with NCM down 0.1% though NST up 0.2% and EVN unchanged. Energy flatlines as consumer staples slipped back after some days of solid gains, WOW down 1.0% and COL down 1.0%. ALL was another loser today as everything came up lemons, down 2.9%. In corporate news, JBH is up 4.8%, profit up 33.2% to $332.7m, final dividend up 76% to 90c. KGN down 6.1% despite a 56% lift in profit and 65% lift in its final dividend. BPT improved 7.1% on its results. Expects FY21 underlying EBITDA between $900m and $1bn. ALU up 1.3%, NPAT down 41.6% to US$30.9m vs consensus US$43.4m. LLC rallied 1.4%, final distribution of 3.3c. Nothing on the economic front today locally, NZ has delayed its election by a month and Japanese GDP has slumped. The 10-year yield is slightly softer at 0.91% and the AUD is grinding slightly higher. Dow Futures up 82. Asian markets mixed with South Korea on holidays but Japan down 0.6% and China very firm up 2.6% on PBoC stimulus.

Today’s Highlights

• ASX 200 down 50 to 6076.
• High 6118 Low 6059.
• Results dominate again.
• Big Bank Basket falls to $124.36
• Results focus continues.
• All Tech Index down 1.18%
• 55 trading days until the US election.
• Dow Futures up 82.
• Gold falls to AUD$2707.
• 10-year bond yield falls to 0.91%
• AUD rallies to 71.79.
• Bitcoin firms to $11826 with gold higher.
• Asian markets mixed with South Korea on holidays but Japan down 0.6% and China very firm up 2.6%.

STOCKS

• TLS -1.93% JP Morgan downgrades.
• MTS -1.32% Credit Suisse upgrade.
• ILU +0.52% proposed spin-off of Deterra Royalties worth around $2.1bn.
• MND -0.71% new contracts secured.
• PTM -2.07% Kerr steps back. Again.
• TGF -3.91% writes off total Paringa loan.
• CCX +6.67% good rally.
• BBN +5.54% broker upgrades
• KMD +2.90% some catch up perhaps.
• PBH +6.94% back on shopping list.
• GWA -10.51% plug gets pulled on results.
• AEF -3.28% rerating continues.
• ALD -3.62% sells 2-3 freehold sites.
• MFG -3.12% Ex Div.
• URW -3.95% denies media speculation.
• VIP -13.79% gloves are off.
• PET +27.66% buyers are back.
• BRN +17.50% deal with Magic Eye.
• ALG +10.59% loan helps boost sentiment.
• CHN +24.42% high grade zones at Julimar.
• COH -0.74% court case ruling.
• SYD +2.07% SYDR +13.01%
• Speculative Stock of the Day: Hydrix (HYD) +259.55% first implants of First AngelMed Guardian in Singaore. The implants are the world’s first implantable early heart attack warning system.
• Biggest Rises: CDA, WAF, BPT, PBH, CCX, DDR and BBN.
• Biggest Falls: GWA, BEN, KGN, RWC, AMP, URW and TWE.

TODAY

• Kogan.com (KGN) -6.09% Full-year NPAT up 55.9% to $26.8m vs consensus $28.5m. Revenue up 13.5% to $497.9M vs consensus $507m. Gross Sales of up 39.3% to $768.9m. Adjusted EBITDA up 57.6% to $49.7m vs consensus $48.6m. Fully franked final dividend of 13.5c, up 64.6% on prior year.
• Bendigo & Adelaide Bank (BEN) –6.57% Full-year Cash NPAT down 27.4% to $301.7m vs consensus $309.8. Defers final dividend. Revenue $1.63bn vs consensus $1.61bn. Cash EPS down 29.8% to 59.7c. Net interest income $1.3bn, same as FY19. Net interest margin 2.33% vs year-ago 2.36%. CET1 ratio of 9.25%, +33bps y/y. Bad and doubtful debts of $168.5m were significantly influenced by the COVID-19 provision of $127.7m. Excluding the COVID-19 collective provision overlay, bad and doubtful debts comprised 8bps of gross loans, with the overlay contributing a further 18bps. The number of large impaired loans resolved in H2 has reduced specific provisions and total impaired assets.”
• Beach Energy (BPT) +7.12% Full-year underlying NPAT $461m vs consensus $446.7m. Revenue $1.73bn vs consensus $1.72bn. Final dividend 1c/share, fully franked. Expects FY21 underlying EBITDA between $900m and $1bn. Production in the range of 26-28.5mmboe and capex $650-750m.
• Bluescope Steel (BSL) +2.32% Full-year underlying NPAT down 63% to $353m vs consensus $358.7m. Revenue down 10% to $11.28bn vs consensus $11.25bn. Underlying EBIT down 58% to $564m vs consensus $559.1m. Final ordinary dividend (unfranked) 8c, same as FY19. At the beginning of 1H FY2021, lagged steel spreads in North America and Asia are lower than 2H FY2020 averages. Orders and despatches in Australia remain stable and North Star is despatching near full capacity.
• GWA Group (GWA) –10.51% Full-year normalised NPAT from continuing operations down 12% to $44.9m vs consensus $47.7m. Revenue up 4% to $398.7m vs consensus $405m. Normalised EBIT down 8% $71.8m vs consensus $76.5m. Final dividend 3.5c. Trading in July has been slightly ahead of the same period in the prior year. However, trading is expected to remain very challenging in FY21 due to weak construction market conditions further exacerbated by the uncertainty surrounding the effects of COVID-19 across all regions and as highlighted by the rapidly evolving situation in Victoria.
• Altium (ALU) +1.34% Full-year NPAT down 41.6% to US$30.9m vs consensus US$43.4m. Revenue up 10.1% to US$189.1m vs consensus US$189.1m. EBITDA US$75.6m vs year-ago US$66.8m. Final dividend of 18c vs 14c year ago. Management Comments, “Altium remains firmly committed to its long-term targets. We are on track to achieve 100,000 subscribers by 2025, having just passed the half-way mark. Due to COVID-19, however, we may take an additional 6 to 12 months to achieve our 2025 goal of $500M in revenue”.
• JB Hi-Fi (JBH) +4.80% Full-year underlying NPAT up 33.2% to $332.7m vs consensus $326.4m. Revenue up 11.6% to $7.92bn vs consensus $7.89bn. Underlying EBIT up 30.5% to $486.5m vs consensus $496.3m. Final dividend up 76.5% to 90c/share, fully franked. July Sales trading update, total sales growth for JB HI-FI Australia was +42.1% y/y with comparable sales growth of +44.2% y/y. Total sales growth for The Good Guys was +40.4% with comparable sales growth of +40.4% y/y. The group has seen a significant acceleration in online sales in Victoria in the first 11 days following stage 4 temporary store closures. This, combined with continuing sales momentum across the rest of Australia, has resulted in the group achieving strong sales growth in August to date.
• Lendlease Group (LLC) +1.39% Full-year core NPAT down 88% to $96m vs consensus $121.2m. Core EBITDA down 70% to $405m vs consensus $316.4m. Backlog $13.9bn vs year-ago $15.6bn. Final distribution 3.3c/share. Development pipeline $113bn vs year-ago $76.1bn. Sale of the Engineering business anticipated to be completed shortly, subject to satisfaction of the final conditions.
• Lynas Corp (LYC) – Full-year NPAT -$19.4m vs consensus -$22.2m. Revenue $305.1m vs consensus $315.1m. EBITDA $59.7m vs consensus $54.3m. Cash from operations $32.1m vs consensus $52.7m. Production restarted at the Lynas Malaysia plant on May 4, following the 6-week temporary production shutdown. Production increased to 75% of the Lynas NEXT production rates in June and LYC expects to maintain this rate until COVID-19 uncertainty is resolved. $425m raising at 230c/share.

ECONOMIC NEWS

• Arrivals in Australia in last week.

• July Arrival numbers:

COVID-19 NEWS

• NZ has delayed its eliction by one month.

Thailand’s GDP shrank 12% from a year ago.

• South Korea reported 197 more cases of coronavirus on Monday.
• Cheery new twist. Malaysia has detected a strain of the new coronavirus that’s been found to be 10 times more infectious. The mutation has become the predominant variant in Europe and the U.S.
• Brazil reported 23,101 cases, down from 41,576 the previous day, for a total of 3,340,197. Another 620 deaths, down from 709 the day before.
• Locally we have had our most deadly day with 25 deaths.

BONDS

• AOFM auction of June 2035 bonds sae $800m sold at 1.2357%.

ASIAN NEWS

• Japan’s economy contracted an annualised 27.8% in the three months through June from the previous quarter. after three straight quarters of contraction the economy has shrunk back to its size after the 2011 tsunami and nuclear disaster.

• PBOC injects net 340 billion yuan into money markets Monday. The PBOC kept the interest rate on the funds unchanged at 2.95%. The yield on China’s 10-year government bonds fell 1 basis point to 2.93%.

EUROPEAN NEWS

• Russia set to provide Belarus with Military support.
• Pelosi has recalled house to vote on funding for postal service.
• Lumbar futures up 79% YTD.
• European futures barely changed.
• Car makers are launching direct internet sales.

And finally…

Just quit my job at PG tips, it wasn’t really my cup of tea.

Woman goes into the local newspaper.
The fellow says”Can I help you? ”
My husband just died and I want to put it in the obituaries.
The fellow says OK ” what do you want to say”
” He’s dead”
The fellow says ” is that all?”
She says” I can’t afford anymore”
He says” You can say more than that.. No extra charge”
She says : OK “Boat for sale”

 

Clarence

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