ASX 200 finished the week with a whimper not a bang, closing down 13 to 6405 (0.2%). For the week the index is up 3.47%. Dow futures down 20 points. A quiet end to the week, banks slightly weaker with the Big Bank Basket downs slightly to $133.26 and NAB the worst of the ‘wunch’ down 0.47%. BHP slipped 1.9% in the big miners but FMG ended higher by 0.3% and gold miners bouncing back hard, NCM up 2.8% and EVN up 6.4%. Energy stocks under pressure as oil slipped, STO down 2.2% and WPL down 0.8%. TLS continued to rally in the split, its not you its me, and rose 1.6%. REITs slipped led by GMG and GPT down 0.6% and 2.3% respectively. In tech, APT was a winner, but when isn’t it. Up 1.6% today with the All Tech Index up 0.4%. Industrials weaker with TCL down 0.9% and SYD off 0.9%. In corporate news, 3PL up 13.2% after receiving a competing takeover offer from Think and Learn of 145c. LOV up 14.5% acquires European retail store network of German wholesaler beeline GmbH for €60 (sixty Euros). RHC down 1.6% on its quarterly update, revenue up 1.5% vs year ago. AMI in a trading halt, to acquire the Dargues Gold Mine for up to $205m. Announces $130m raising. PNV up 8.6%, FDA approved it’s pivotal trial investigation device exemption. NXT up 0.7% despite positive comments from CEO at AGM. In economic news, CBA has upgraded its economic forecasts and now expects a fall in GDP of 3.3% in 2020 to be followed by a 4.2% increase in 2021 and 3.8% in 2022. Unemployment rate expected to be 5.9% in 2021 and 5.4% in 2022. 10-year yields back off to 0.87%. Asian markets drop with Japan down 0.90% and China down 0.95%.
- ASX 200 down 13 to 6405.
- High 6415 Low 6378. Range narrows. Volume drops.
- For the week, the ASX has risen 3.47%.
- Big Bank Basket slips slightly to $133.26
- All Tech up 0.36%
- Dow Futures down 20.
- Gold rises to AUD$2598
- 10-year yields back off to 0.87%
- AUD slips to 72.25c
- Bitcoin kicks to $16,405
- Asian markets drop with Japan down 0.90% and China down 0.95%.
- LOV +14.46% bargain basement acquisition in Germany.
- JIN +8.27% Lotterywest deal.
- SAR +7.06% NST +7.16% PRU +6.69% gold back.
- URW -6.15% credit watch after no capital raise.
- EVT -3.65% vaccine bump wearing off.
- VCX -3.06% profit taking.
- PDN -6.90% conference presentation
- PSQ -1.24% drilled on 3000 shares.
- 3PL +13.28% fresh bid at 145c.
- M7T +10.78% 7-year itch.
- TPW -1.09% Regal says it can double.
- TWE -1.71% tipped at Sohn today.
- CSL +0.29% an undiscovered gem according to Sohn presenter.
- Speculative Stock of the Day: Cellnet Group +65.12% Business update. YTD net profit before tax (unaudited) of $1.60m, up 410% on the same period last year. October revenue (unaudited) was $12.6m, which was up 18% year-on-year, and NPAT was $1.05m.
- Biggest Winners: RMC, LOV, GNC, PNV, JIN, RED and NST
- Biggest Losers: ABY, KAR, URW, AFG, OCL, EVT and CGF.
- Jumbo Interactive (JIN) +8.27% Sign 10-year agreement with Lotterywest to provide online software platform and services. Jumbo will receive a 9.5% service fee for every customer transaction through a white label platform. The term is to be a three-year initial term with an option of extension for a further three years followed by four years (3+3+4). The extension options are at the discretion of Lotterywest. Lotterywest has the option to transition white label players to the Lotterywest website and app 12-months from the date of go-live which is currently scheduled for late December 2020.
- 3P Learning (3PL) +13.28% Received an offer from Think and Learn Private Ltd of 145c/share. A competing bid to IXL Learning’s price for 3PL of 135c/share. Think and Learn Private Ltd operates under the brand name BYJU. There is no certainty that the proposal will result in a binding offer from BYJU. 3PL recommends that shareholders take no action at this point in time.
- Lovisa Holdings (LOV) +14.46% Acquires European retail store network of German wholesaler beeline GmbH for €60 (sixty Euros). The acquisition is expected to add more than 80 stores to the Lovisa global store network across 6 European countries. The combined cash requirement for fitout and inventory for the conversion of stores to Lovisa is expected to be less than €5m. All 24 stores in France and 39 stores in the UK are temporarily closed. In the remainder of the store network the company has seen a continuation of the improved sales trend previously reported.
- Ramsay Health Care (RHC) -1.60% Q1 Australian revenue up 1.5% vs year ago (ex-Victoria up 6.6%) reflecting a 1.7% increase in surgical admissions (ex-Victoria up 8%) and lower non-surgical activity. EBITDAR declined compared to the pcp impacted by the restrictions on activity in Victoria during the second lockdown, and the increase in costs and impact on case mix as a result of the COVID-19 environment. Ramsay Santé reported an increase in surgical volumes of circa 5.4% vs year ago combined with lower non-surgical activity. Ramsay UK reported a decline in total revenue of 9.9 vs year ago with volumes picking up in the latter part of the quarter. Management comments: “Given the near-term uncertainties in the market, we are not in a position to provide guidance for FY’21. Notwithstanding the current environment, over the medium to long term the health care industry fundamentals remain positive.”
- Aurelia Metals (AMI) – To acquire the Dargues Gold Mine for up to $205m. Dargues is expected to produce an average of 45-55koz gold p.a. at an average AISC of $1,150-1,350/oz over the next five years. Transaction expected to be accretive on a Net Asset Value (NAV) per share basis. Aurelia intends to raise ~$130m consisting of a ~$41m institutional placement and a ~$89m 1 for 4.2 accelerated pro-rata non-renounceable entitlement offer.
- Midway (MWY) -7.69% sees no material impact from China’s ban on log imports. One Chinese customer has deferred a shipment of logs from the Tiwi Islands. Midway has no other log shipments planned this year. Adds there is no indication that this ban will impact woodchips and all Midway’s current wood chip export contracts are being fulfilled.
- Polynovo (PNV) +8.57% FDA has approved Polynovo’s pivotal trial investigation device exemption. This approval allows PolyNovo to begin patient recruitment once the various hospital Independent Review boards (IRB) grant approval. Estimate recruitment will begin early in CY 2021 and conclude around end of CY2023. Clinical program is supported by BARDA funding of US$15m.
- NextDC (NXT) +0.70% Experiencing a strong start to FY21. CEO comments: “We’ve experienced a strong start to FY21, already achieving major milestones for the business. The guidance we have provided in FY21 reflects the company’s expectation for further solid data centre services revenue growth of between 21% and 25% over that seen in FY20. The top end of that guidance represents a $250m data centre services revenue stream with strong growth in recurring data centre services revenue, underpinned by long-term customer contracts. This includes over 17MW of contracted capacity that had yet to commence billing as at 30-Jun-20. Furthermore, we are on track to deliver growth in our underlying EBITDA in the range of 20% to 24%, now increasingly driven by the performance of our second-generation facilities as customer utilisation ramps up.”
CBA has upgraded its economic forecasts & now expects a fall in GDP of 3.3% in 2020 to be followed by a 4.2% increase in 2021 & 3.8% in 2022. Unemployment rate expected to be 5.9% in 2021 & 5.4% in 2022.
COVID – 19 NEWS
- Wisconsin’s daily cases exceeded 7,000 for a third consecutive day. New York State saw nearly 10,000 new coronavirus cases over two days.
- Portugal is extending restrictions on Monday, adding 70 municipalities to a list where people’s movement are limited. Hospitalisations for Covid-19 in France reached 32,683.
- The U.K reported 33,470 new cases on Thursday. Italy registered 636 deaths related to Covid-19 on Thursday,
- Free trade deal to be signed this weekend. Known as the Regional Comprehensive Economic Partnership or RCEP.
- The race is on between Tesla and its Chinese counterpart. The starting price for a Nio ES6 SUV is about US$54,000, more than a third higher than that of Tesla’s popular Model 3 sedan. Monthly sales are now around 5000 whilst Tesla is around 12,000 but the battle is on and price competition will ensue.
EUROPEAN AND US HEADLINES
- Trump bans investments in Chinese companies controlled by military.
- GOP resistance is satrting to crack slightly. Trump allies say Biden should have security briefings.
- Johnson’s right-hand man, advisor Dominic Cummins is set to resign.
- Speculation that Trump may start his own TV streaming channel as he is so upset with Fox.
- Panic buying starting in US as toilet rolls back in favour.
- Half of Goldman Sachs new partners are female or minorities.
- Two weeks to Thanksgiving. Don’t be a turkey, stay home. Or risk Xmas. 50m will travel. Driving the preferred travel choice.
- Disney Plus signs up 74m in less than a year.
- One report suggests 125m EVs and Onshore wind turbines by 2030.