ASX 200 raced out of the blocks but a Trump news conference brought us back to earth with a thud briefing before we dismissed it as noise and finished 51 points to the good at 6190 (0.8%) after a sprint in the match out. Up 4.4% for the week. Dow Futures showing a loss or 158 points. Gold miners were the stars of the show despite the AUD price going absolutely nowhere, as the AUD rose to 72.65c on a weaker USD. NCM up 3.5% and NST up 7.2% with second liners doing well, BGL up 10.2% and DEG up 8.0%. Big diversified miners also saw some buying after being left behind by the banks. BHP up 1.3% and RIO up 1.6%. Energy stocks remain in a hole with STO down 1.4% and WPL down 0.8%. Big Banks were mixed with the Basket around $126.73. NAB saw some upgrades and the stock up 1.3%. Healthcare under slight selling pressure, CSL up 0.1% and FPH down 1.5%. Tech was mixed, APT down 2.7% and the All Tech Index fell 0.5%. MQG up 2.3%, on its half-year results. Interim dividend 135c, 40% franked. MFG down 0.2%, total funds under management at the end of October $103.48bn vs month-ago $102.09bn. REA down 0.4%, on its quarterly update. In October, national listings were down 1% vs year ago, increases in Melbourne and Sydney offset by declines in other markets. TWE bouncing back, up 9.9%, on broker upgrades. NWS up 13.7%, on its quarterly update. Starting the fiscal year strongly, with higher revenue in many of its segments during Q1. AMC up 4.1% on its quarterly results, lifts dividend to 16.55c. Announces US$150m buyback. TAH doing well up 15.8% on the back of media speculation that private equity may be keen to take a look. In economic news, the RBA released its SOMP and China is ramping up the media outlet rhetoric on how ‘Australian will be punished’. Asian markets mixed with Japan up 0.9% and China down 0.7%.
- ASX 200 up 51 to 6190. Late surge helps.
- High 6202 Low 6151. Narrow range.
- ASX 200 up 4.4% for the week.
- Big Bank Basket rises to $126.73
- All Tech Index down 0.5%
- Dow Futures down 156 points.
- Gold steady at AUD$2667
- 10-year bond yield eases to 0.75%
- AUD rises to 72.65c
- Bitcoin rallies to $15573
- Asian markets mixed with Japan up 0.9% and China down 0.7%
- TWE +9.92% UBS upgrades to buy.
- CWN +2.68% question marks on Sydney licence remain.
- TAH +15.82% bid speculation.
- NWS +13.66% good quarterly.
- DEG +7.96% bought up on gold sentiment.
- UWL +6.92% race narrows for OPT.
- BVS -2.33% slide continues.
- BUD -5.08% LIFX to launch in Walmart Sam’s Club.
- MYQ -9.57% selling continues.
- WBT -8.16% Appendix 2A.
- OFX +9.02% WTC deal.
- APT -2.66% profit taking.
- BXB +1.96% broker upgrades.
- Speculative Stock of the Day: Papyrus Australia (PPY) +155.00% good volume after a progress and sales report. Turning banana tree trunks or BTT into substantial revenue streams from peat blocks to Bokashi for agriculture.
- Biggest Winners: TAH, NWS, BGL, TWE, GMA, RSG, RMS and RMC.
- Biggest Losers: HUB, RDC, YAL, NEC, CSR , APT and CMW.
- Freedom Foods Group’s (FNP) – ASIC whistle-blower believed to have raised Freedom Foods Group’s accounting red flags as far back as May 2019. One source told newswires that the practice was rampant in the business where a large proportion of all operational costs (~70%) were capitalised.
- iSelect (ISU) +1.82% ACCC investigating whether Innovation Holding’s acquisition of iSelect shares is likely to substantially lessen competition. ACCC statement: “We are considering whether the completed and proposed acquisitions are likely to substantially lessen competition. iSelect is a competitor to Innovation Holdings in offering comparison services for a range of financial and energy products to consumers and minority stakes held between competitors can give rise to competition concerns”.
- Tabcorp (TAH) +15.82% PE firms KKR and TPG thought to be interested in a possible takeover. Newswires note one PE firm is keen to bid for the entire Tabcorp business with a premium to the current share price that may result in a bid worth $9bn, while another group is interested in just the TAB wagering business, potentially valuing the unit at up to $3bn.
- REA Group (REA) -0.45% Q1 adjusted EBITDA $123.8m vs consensus $105m. Revenue $195.7m vs year-ago $202.3m. Outlook: “Our customers have not fully recovered from the impact of COVID-19 this year and the outlook for the property market is not clear. We have therefore made the decision to defer any price increases until July 2021. In October, national residential listings were down 1% vs year ago, with increases in Melbourne and Sydney of 14% and 2% respectively, offset by declines in other markets.” Continue to see strong levels of buyer enquiry, underpinned by low interest rates and healthy bank liquidity. Continue to target no increase in core operating costs for FY21.
- News Corp. (NWS) +13.66% Q1 EPS US8c ex-items vs consensus US0c. Revenue US$2.12bn vs US$1.96bn. Total segment EBITDA US$268.0m vs year-ago US$221m. Management comments: “News Corp has started the fiscal year strongly, with higher revenue in many of our segments during Q1, and a 21% increase year-on-year in profitability, despite the disruptive economic consequences of COVID-19. Total revenues for the quarter were US$2.1bn, a fall of 10%, but that contraction was largely due to the sale of News America Marketing, and the adjusted decline was 3%. Meanwhile, three of our segments, Dow Jones, Digital Real Estate Services and Book Publishing, reported year-over-year Segment EBITDA increases of at least 45%, highlighting the success of our investment strategy in publishing and digital real estate.”
- Amcor (AMC) +4.08% Q1 adjusted net income US$247m vs US$239m. Increases dividend and launches share buy-back. Adjusted EPS US16c vs consensus US15c. Revenue US$3.10bn vs consensus US$3.11bn. Adjusted EBITDA US$460m vs consensus US$453.7m. Quarterly dividend increased to 11.75cps. ASX will receive an unfranked dividend of 16.55 Australian cents. Launches US$150m buy-back of ordinary shares and CDIs. In FY21, sees adjusted constant currency EPS growth between 7-12% vs prior 5-10%. Includes pre-tax synergy benefits associated with the Bemis acquisition of US$50-70m. Estimated that currency would have no material impact on reported EPS. Adjusted free cash flow of US$1.0 to US$1.1bn.
- Magellan Financial (MFG) -0.23% Total funds under management at the end of October $103.48bn vs month-ago $102.09bn. In October, Magellan experienced net inflows of $601m, which included: Net retail inflows $188m, net institutional inflows $413m.
- Macquarie Group (MQG) +2.27% First half profit $985m vs consensus $963.6m. Net operating income $5.97bn vs consensus $5.25bn. Interim dividend 135c/share, 40% franked. Outlook: Dividend policy remains 60-80% annual payout ratio. The extent to which these conditions will adversely impact overall FY21 profitability is uncertain, making short-term forecasting extremely difficult. Unable to provide meaningful earnings guidance for FY21. While the economic impacts of the COVID-19 pandemic continue to be felt in the short term, MQG remains well-positioned to deliver superior performance in the medium term.
- Suncorp Group (SUN) +1.34% Total natural hazard costs of $348-408m at the end of October. As of November 6, Suncorp had received around 6,400 claims related to the QLD NSW Hail event, comprising approximately 3,300 motor claims, 2,800 home claims and 300 commercial claims. Claims numbers are expected to increase, as customers continue to lodge their claims. Suncorp’s FY21 natural hazard allowance is US$950m. The allowance is divided equally between the first and second halves of the financial year.
- Vicinity Centres (VCX) +0.72% Intends to pay a distribution for the six months to December 31. September quarter update: Moving annual turnover down 15.2% vs quarter-ago down 7.0. Ex Vic down 1.7% vs quarter-ago down 1.6%. Centre visitation 58% vs quarter-ago 61%.
- “Australia will pay tremendously for its misjudgement,” a searing editorial in the state-sanctioned China Daily has warned.
The RBA has released its Statement on Monetary Policy. Click here to view the full release.
COVID – 19 NEWS
- The UK has removed Denmark from the safe corridor.
- Zero cases in Australia for seventh consecutive day. Japan up to 1000. US 120,000 plus.
- South Korea sees 145 new CV19 cases. France has a second record cases of 58,046.
- Greece enters lockdown Saturday. UK goes to lockdown.
- The market value of the Bloomberg Barclays Global Negative Yielding Debt Index rose to $17.05 trillion on Thursday, an all-time high.
- President Xi Jinping is signaling his long-term vision for the Chinese economy likely requires it to expand at a average pace of less than 5% a year.
- Alibaba reported a 30% rise in sales in the September quarter, in line with expectations but down a tad from the previous three months. Alibaba booked almost 4.7 billion yuan of profit from Ant in the September quarter.
- Alibaba’s shares have gained more than 60% from their Covid-19-era lows in March and touched a record high in October when Ant priced its IPO.
- Thai Airways to sell 34 planes to the highest bidder.
EUROPEAN AND US HEADLINES
- Maybe some more election results.
- US Non-Farm payrolls number tonight. Big divergence on estimates. 21.5 m Americans still claiming some sort of unemployment assistance.
- Uber results miss targets. Loss narrows to US$1.09bn.
- AstraZeneca expects vaccine trial results this year.
- Ant Group IPO could face a 6-month delay.
Two Eagles, an old Indian chief, sat in his hut on the reservation smoking a ceremonial pipe and eying two US government officials sent to interview him.
One US official said to Chief Two Eagles, “You have observed the white man for 90 years. You’ve seen his wars and his technological advances. You’ve seen his progress, and the damage he has done.”
The Chief nodded in agreement.
The official continued, “Considering all these events, in your opinion, where did the white man go wrong?”
The Chief stared at the two government officials for over a minute…
“When white man found the land, Indians were running it. No taxes, No debt. Plenty buffalo. Plenty beaver. Women did all the work. Medicine man free. Indian man spent all day hunting and fishing, all night having sex.”
Then the chief leaned back and smiled before he added, “Only white man dumb enough to think he could improve system like that.”