ASX 200 up 79 to 6484 before being so rudely interrupted. Dow futures up 216 points. The ongoing market data issues triggered the halt to trading according to the ASX. Dow Futures up 230 points. All sectors were in positive territory, the rotation into value names continuing with energy and real estate the most improved. WPL up 1.1%, OSH up 2.7%, URW up 9.2%, GMG up 1.5%. ASIC handed down its review into the BNPL sector, observing one in five customers are missing payments. No new customer protections were recommended. BNPL providers will need to comply with the design and distribution obligations from October 2021. APT down 0.4% welcomed the report. TWE up 2.9%, the market arguably pleased with the trade deal over the weekend. The big four banks were all up between 1.4% and 2.7%. MQG down 0.5%, trading ex-dividend. CSL up 1.8%,to invest more than $800m to construct a vaccine manufacturing facility in Melbourne. QAN up 1.6%, CEO expects the airline to stop burning through cash and restore seat capacity to at least half its pre-virus levels by Christmas. ELD up 0.1%, full-year profit came in ahead of consensus. The agricultural sector remains on track for a recovery after successive years of drought-affected seasons in eastern Australia. SUN up 1.1%, COVID-19 impact across general insurance portfolio for 1H21 to be broadly neutral. Sets aside $125m just in case. SKC down 4.1% on management changes. NEC down 1.64%, CEO to step down after revealing a relationship with former colleague. Asian markets firmed with Japan up 1.8% and China up 0.97%.

Today’s Highlights

  • ASX 200 up 79 to 6484. Remarkably stable for the day.
  • High 6487Low 6405. Trading ceased at 10.23am. Back tomorrow with luck.
  • Big Bank Basket rallies to $135.84
  • All Tech up 0.29%
  • BNPL in focus on ASIC report.
  • Dow Futures up 230.
  • Gold rises to AUD$2601
  • 10-year yields back off to 0.87%
  • AUD rises to 72.89c
  • Bitcoin kicks to $15,982
  • Asian markets firmed with Japan up 1.8% and China up 0.97%

STOCKS – Until the system went down

  • URW +9.29% Meeting of Supervisory board.
  • PLS +4.04% lithium rally continues.
  • BWX +3.70% strategic partnership with THG.
  • PNV -2.63% AGM webcast.
  • NEC -1.64% loses CEO.
  • AMI -9.29% placement.
  • INR +11.36% change of director’s interest.
  • VUL +6.70% kicks again.
  • KLL +7.50% rally continues.
  • LEP +0.92% pub portfolio gets revalued up $51.6m.
  • HPG +6.45% finding support.
  • QAN +% Happy 100th Birthday. Telegram from the Queen?
  • Speculative Stock of the Day: Alterity Therapeutics (ATH) +26.92% US patent for next generation neurodegenerative diseases.
  • Biggest Winners: URW, CIA, PLS, MGG, NWS, BWX and MGX
  • Biggest Losers: SKC, ZIM, PNV, SPL, VGI, MOE and AST.
  • SKYCITY Entertainment (SKC) -4.05% CEO Graeme Stephens to retire on November 30,COO Michael Ahearne appointed as CEO. CFO Rob Hamilton resigns, to step down in February next year. Chief Marketing Officer Liza McNally to step down in March next year. Combined NZ domestic year to date revenue 88% of pcp on a like-for-like basis. EBITDA and cashflow materially ahead of expectations (at time of equity raising). In FY21, expects group normalized EBITDA to be above FY20 but still well below pre-COVID levels. Planning for international borders to remain closed for the duration of FY21. Dividend policy remains under review, no interim dividend but on-track to pay a final dividend for FY21 in September or October.
  • Nine Entertainment (NEC) -1.64% CEO Hugh Marks resigns after revealing a relationship with former colleague. Marks reportedly told staff in an email Saturday that he has begun the “process of moving on”, and that Nine would begin looking for his replacement on Monday. Senior executives Chris Janz and Mike Sneesby named as potential candidates.
  • BWX Limited (BWX) +3.70% Enters into a strategic partnership with global technology platform, THG Holdings. THG’s end-to-end eCommerce infrastructure will assist in taking BWX brands direct to consumers across Europe and Asia. Initially targeting five priority markets, increasing to 14 markets in FY22.
  • NAB (NAB) +1.84% To raise $750m via the issue of NAB Capital Notes 5. Once issued, the notes will qualify as Additional Tier 1 Capital for the purposes of NAB’s regulatory capital requirements.
  • Damstra Holdings (DTC) +4.09% In FY21, expects revenue between $33-35m, representing growth of 60-70%. Sees underlying EBITDA between $5-7m. expects 570k users and 638k clients. Vault integration update – Cost savings will be fully run-rated by the end of Q3 FY21 with the original target of $4m synergies upgraded to $5m.
  • Cleanaway Waste Management (CWY) +2.15% Solid Waste Services – FY20 EBITDA margin uplift of 220 bps due to AASB16. Revised medium term target is 29%-29.5% vs prior 27% pre AASB16. Industrial & Waste Services – FY20 EBITDA margin uplift of 30 bps due to AASB16. Revised medium term target 15.5%-16.0% vs prior 15% pre AASB16. Liquid Waste & Health Services – FY20 EBITDA margin uplift of 160 bps due to AASB16. Revised medium term EBITDA target is 21.5%-22.0% vs prior 20% pre AASB16.
  • Adairs (ADH) +1.22% Appoints Brett Chenoweth as Chairman, effective today. Chenoweth is currently Chairman of Madman Entertainment, Canberra Data Centres and The Advisory Board of HRL Morrison & Co.
  • Suncorp Group (SUN) +1.09% Expects COVID-19 impact across general insurance portfolio for 1H21 to be broadly neutral. Remains confident the intention of its business interruption (BI) policies is clear and that policies do not respond to pandemics, that said, SUN now expects to recognise a further $125m (pre-tax) provision for potential BI claims in 1H21 assuming no further material COVID-19 outbreaks.
  • Aurelia Metals (AMI) -9.29% Completes placement and institutional component of its entitlement offer. ~$93m was raised across at a price of 43c/share.
  • CSL (CSL) +1.80% Plans to invest more than $800m to construct a vaccine manufacturing facility in Melbourne. Follows agreement with the Australian Government for the 10-year supply of influenza pandemic protection for the Australian population, antivenoms for Australian snakes, spiders and marine creatures and Q-Fever vaccine. The facility will also manufacture Seqirus’ proprietary adjuvant MF59 – a substance added to some vaccines to improve immune response and to reduce the amount of antigen needed for each vaccine, enabling more doses to be manufactured more rapidly.
  • Qantas (QAN) +1.57% CEO expects the airline to stop burning through cash and restore seat capacity to at least half its pre-virus levels by Christmas. AlanJoyce, CEO said in an interview that the re-opening of Australia, which contributes two-thirds of Qantas’ profit, should enable the airline to claim 70% of the domestic market, up 10 percentage points on pre-Covid-19 levels. Adds that in a post-Covid world, more international passengers would embrace direct ultra-long-haul routes, which could allow Qantas to reboot its delayed “Project Sunrise” strategy of launching direct flights from Sydney to New York and London.
  • Elders (ELD) +0.08%$ Full-year underlying profit $107.7m vs consensus $101.3m. EPS 69c vs consensus 66c. EBIT $120.6m vs consensus $113.2m. Revenue $2.09bn vs consensus $2.14bn. Fully franked dividend of 13c. Outlook: “The agricultural sector remains on track for a recovery after successive years of drought-affected seasons in eastern Australia. Production is forecast to grow but the value of production is expected to remain steady due to reduced prices. COVID-19 continues to disrupt the agricultural sector, however the business and broader industry has remained adaptable. Continuing uncertainty also remains in export markets.”
  • ALE Property Group (LEP) +0.92% The valuation of 86 properties at the end of October was $1.23bn vs $1.17bn at the end of June. LEP has collected 100% of portfolio rent through the COVID-19 pandemic. All of the group’s properties are now open following the reopening of hospitality venues in Victoria on November 9.

ECONOMIC NEWS

ASIC’s buy now pay later industry report key points (no new customer protections were recommended)

  • The total amount of credit extended in the BNPL industry has almost doubled in 12 months. The number of transactions increased 90% from 16.8m in the 2017-18 financial year to 32.0m in the financial year 2018-19
  • One in five consumers are missing payments. In the 2018–19 financial year, missed payment fee revenue grew 38% to $43m
  • It noted that while popular, some consumers are suffering harm. Adding there are regulatory changes coming that will impact the industry, with the design and distribution obligations coming into effect in October 2021.
  • The industry is also developing a code of conduct.

Morgan Stanley recommended investors overweight equities and corporate bonds against cash and government debt, and sell the U.S. dollar. “Keep the faith, trust the recovery.”

BONDS

COVID – 19 NEWS

  • Masks must be worn on Auckland public transport and on all domestic flights throughout New Zealand.
  • South Korea reported 223 new cases in 24 hours, up from 208 a day earlier.
  • California reported 10,968 new cases Sunday, a three-month high.
  • France reported 27,228 new coronavirus cases on Sunday.

ASIAN NEWS

  • Industrial output rose 6.9% in October from a year earlier, versus a median estimate for a 6.7% increase, the National Bureau of Statistics said Monday. Retail sales growth accelerated to 4.3% from 3.3% in September, though missing expectations for a 5% increase.
  • Fixed-asset investment grew 1.8% in the first 10 months of the year, versus a forecast 1.6% gain. The surveyed urban unemployment rate inched lower to 5.3%.
  • Japanese GDP grew an annualized 21.4% in the three months through September from the previous quarter, expanding at the fastest clip since 1968.

EUROPEAN AND US HEADLINES

  • Some analysts believe that outgoing POTUS will make some last-minute hard-line moves against China. Trump may announce sanctions or trade restrictions against more Chinese companies, government entities or officials, citing human rights violations.
  • PNC near to a deal to buy BBVA’s US business for US$11bn.
  • UK PM forced to self-isolate as Cummins set to eave building.
  • KKR and Rakuten to acquire 85% of Seiyu in deal valuing retailer at US$1.6bn.
  • Simon will pay an adjusted US$43 a share instead of previous US$52.50 for rival shopping centre company Taubman.

And finally…

Bill and Sam, two elderly friends met in the park every day to  feed the pigeons, watch the squirrels and discuss world problems. 

One day Bill didn’t show up. 
 
Sam didn’t think much about it and figured maybe he had a cold or something. 
 
But after Bill hadn’t shown up for a week or so,  Sam really got worried. 
 
However, since the only time they ever got together was at the park, Sam didn’t know where Bill lived, so he was unable to find out what had happened to him.

A month had passed, and Sam figured he had seen the last of Bill, but one day, Sam approached the park and – lo and behold! – there sat Bill!  
 
Sam was very excited and happy to see him and told him so.  Then he said, ‘For crying out loud Bill, what in the world happened to you?’

Bill replied, ‘I’ve been in jail.’ 

‘Jail?’ cried Sam. ‘What in the world for?’  

‘Well,’ Bill said, ‘you know Sue, that cute little blonde waitress at the coffee shop where I sometime go?’   ‘Yeah,’ said Sam, ‘I remember her.  What about her?’
 
‘Well, one day she filed rape charges against me;  and at 89 years old, I was so proud that when I got into court, I pleaded ‘guilty’…

‘So, the bloody judge gave me 30 days for perjury’!!!!!

Clarence

XXX