The ASX rose 16 points to 6547 after a cautious start on US weakness. Strong finish. Local job numbers cheered banks and led to the turnaround. Dow futures down 35 points. Narrow range and pausing for thought as once again AGMs and investor briefings dominated. The Big Bank Basket is going from strength to strength on the back of jobs numbers showing a big bounce back in employment. The basket rose to $143.92 with CBA up 1.7% and WBC up 2.3%. Insurers fared badly today as a court ruling on CV19 business payouts infected the sector. IAG in a trading halt with capital raising talk. QBE dropped 3.9% and SUN off 3.0%. Miners were mixed, BHP down 0.9% and RIO up 0.8%. Gold miners eased with NCM off 2.2% and energy stocks flatlining. Industrials saw mixed fortunes, WES up 1.6%, GMG up 0.5% and healthcare caught a cold led by CSL down 0.7% and COH off 2.1%. Tech dominated by APT up 3.4% and the Index up 0.6%. In corporate news, NEC up 0.4% after releasing its FY24 targets, revenue weighted heavily to its digital businesses. FXL up 5.61% on its business update and Mastercard partnership announcement. ALU off 0.9% after reiterating FY21 guidance. OSH down 2.4% on its strategy update. PNV up 3.1%, enters Belgium, Netherlands, Luxemburg and Sweden through the extension of the partnership with PolyMedics. HPI to raise $40m at 304c to fund three acquisitions. AAC up 5.2%, the market looking past its expectation for lower meat and cattle sales in H2. On the economic front, unemployment rose 0.1% to 7% in October as expected. The 10-year bond yield unchanged at 0.89% with the AUD at 72.89c. Asian markets mixed with China up 0.4% and Japan now down 0.8%.

Today’s Highlights

• ASX 200 up 16 to 6547 (0.1%). Closing surge.
• High 6547 Low 6498. Narrow range. Average volume.
• Insurers in trouble on court ruling.
• Jobs number cheer.
• Big Bank Basket rallies to $143.92. Huge rally off lows continues.
• All Tech up 0.6%
• Dow Futures down 40
• Gold eases to AUD$2562
• 10-year yields unchanged at 0.89%
• AUD steady at 72.89c
• Bitcoin steady at $17,954
• Asian markets mixed with China up 0.4% and Japan now down 0.8%.

STOCKS

• ADN +10.34% investor presentation.
• PPT +7.62% investor day invitation
• ALQ +7.89% broker upgrades on results.
• BSL +5.29% guidance update
• FXL +5.61% business update and Mastercard deal.
• PLL -5.06% more profit taking.
• WAM -5.08% ex dividend.
• ELD -4.52% brokers cool to result.
• KGN -3.63% options issue dominates ahead of AGM.
• VUL -5.29% profit taking.
• 4DS +18.52% chips are up.
• MX1 +15.25% more details on nano deal.
• BET +10.00% NJ Racing commission approves approval.
• 3DP +13.98% bulls are back.
• SYR +12.07% bulls back buying.
• ORE +8.49% lithium back in favour.
• Speculative Stock of the Day: Metalhawk (MHK) +30.00% sounds like a heavy metal bank but it’s a gold explorer IPO listed today. Drilling has commenced at Emu Lake.
• Biggest Winners: AND, ORE, ALQ, PPT, DEG, AAC and FXL.
• Biggest Losers: WAM, PLL, BGL, IAP, TLG, ELD and PGH.

TODAY

• FlexiGroup (FXL) +5.61% Announces strategic partnership with Mastercard. Mastercard will work with its partners to drive adoption and will support the development of the open-loop, work anywhere, pilot. The platform is able to support different integration and commercial models to achieve scale in different markets. The partnership is the first announcement of humm ventures, an initiative designed to spearhead innovation between the company and new partners. Business Update: FXL’s portfolio continues to perform strongly with a downward trend in the 30+ days arrears performance for all segments as at September 2020 as a result of a prudent approach to credit risk and approvals. In light of the improved credit performance and cost management, FXL expect H1 FY21 Cash profit to be ahead of the H1 FY20 performance of $34.5m.
• Altium (ALU) -0.91% In short, macro-environment remains challenging and the challenges will remain for some time. In the current financial year, experienced a slow Q1 because of COVID conditions: have picked up some momentum in Q2 and will release Altium Designer 21 in early December. The positive signs we have seen in the last two months and our growing confidence in our H2, which is historically stronger than our H1 lead us to reaffirm our guidance for the full FY21. Reiterates FY21 guidance: revenue US$200-212m vs consensus US$208m. EBITDA US$76-89m vs consensus US$83.2m.
• Bluescope Steel (BSL) +5.29% Guides H1 underlying EBIT of around $475m. On 22 October the company guided underlying EBIT of $340m and on the 9th of November it announced a one-off $40m addition due to sale of a property. Segment performance: Australian Steel Products is expected to deliver a substantially better result than 2H20. North Star continues to despatch at full capacity with automotive volumes normalising across the half. 1H21 underlying EBIT is expected to be lower than 2H FY2020. Building Products Asia & North America expected to deliver a considerably better performance than 2H20. In ASEAN we now expect 1H21 underlying EBIT to be at least double that of 2H FY20. Buildings North America: The core engineered buildings business is on track to deliver a better result than 2H20. New Zealand and Pacific Islands’ performance is improving substantially on 2H FY2020, primarily due to a return to normal operations post-COVID-19 and very strong domestic demand, particularly for coated and painted products.
• Dexus Property Group (DXS) -0.30% DXS and Canada’s CPP Investment Board looking to sell Brisbane’s $300m Gold Tower.
• Oil Search (OSH) -2.36% Alaska update: OSH wants any development of its Alaskan assets to be profitable at an oil price ~US$40/bbl with the asset holding a 33% increase in oil compared to previous estimates Strategy update: Aims to deliver low cost, low greenhouse gas intensity, high-value energy that meets society’s needs with the ambition of being the preferred energy company for all stakeholders. Three phases to meet the goal: Focus business and resources on the assets that matter, driving sustained low costs and simplification of the PNG operations. Deliver world-class resources, starting with commercialising the Pikka development at a breakeven cost of supply of less than US$40/bbl and prioritising the delivery of Papua LNG. Evolve by focusing on maximising shareholder returns and free cashflow, achieving full potential from Alaska and considering targeted complementary energy investments. Now aiming to reduce operated GHG emissions intensity by in excess of 30% by 2030.
• Senex Energy (SXY) +2.90% Reiterates annual production of greater than 10 mmboe (60 PJe) target by the end FY25 at AGM. Chairman comments, “we will pay a dividend of between 20 and 30% of free cashflow no later than the end of the FY22. The Roma North expansion alone will help us achieve annual EBITDA of between $80m and $95m, and free cashflow of between $40m and $60m come H1 of FY22.”
• Vocus Group (VOC) +3.07% Planning IPO of Vocus New Zealand before the end of FY21. Expects a successful IPO to provide greater balance sheet flexibility allowing VOC to invest in core long-term strategic fibre opportunities to extend its network reach and build on its product capabilities. It will also provide the board with the ability to review its long-term dividend policy. Goldman Sachs, Jarden and Craigs have been appointed as Joint Lead Managers of this process.
• Polynovo (PNV) +3.06% Enters Belgium, Netherlands, Luxemburg, Sweden through the extension of the partnership with PolyMedics Innovation (PMI). PMI sales have exceeded projections to date and are showing signs of further growth. PMI has recently placed its fourth stock order with PolyNovo since January 2020.
• Hotel Property Investments (HPI) – Announces $40m placement at 304c/security to partly fund the acquisition of Mango Hill $31.3m, Summerhill $22.7m and Jubilee Tavern $9.3m.
• Australian Agricultural (AAC) +5.65% First half profit -$1.7m vs year-ago -$14.1m. Revenue $143.9m vs year-ago $182.7m. Meat sales $102.9m vs year-ago $105.8m. Cattle sales $41.1m vs year-ago $77.0m. Statutory EBITDA $15m vs year-ago -$3.4m. Lower meat and cattle sales are expected in H2.
• Nufarm (NUF) -0.72% Two months to the end of September underlying profit of -$85.7m. Revenue $267.3m vs year-ago $181.2m. The two months to 30 September are a period of lower demand for crop protection and seed technologies, consistent with seasonal agricultural cycles. Revenues (excluding the divested South American crop protection businesses) for this period typically reflect around 10% of annual sales. Underlying EBIT -$78.8m vs year-ago proforma -$86.4m. October trading update: Positive momentum has continued with year on year revenue growth in all crop protection regions and Seed Technologies in October 2020.
• InvoCare (IVC) -0.61% Appoints Olivier Chretien as CEO, effective January 1.
• Nine Entertainment (NEC) +0.42% FY24 targets: $230m structural cost-out. ~60%+ of EBITDA from digital businesses. Greater than 35% of group revenues from subscription. ~30% of Nine’s revenue from video-on-demand.
• QBE Insurance Group (QBE) -3.94% Responds to AFCA test case decision. Expects maximum net cost of business interruption claims in Australia of $5m per occurrence.
• Cromwell Property Group (CMW) – Receives second strike as shareholders vote 62.2% against the remuneration report. Board spilled as shareholders vote 59.9% in favour of the resolution.
• SEEK (SEK) -1.01% Expects FY21 EBITDA ~$400m vs year-ago $414.9m. Sees revenue of ~$1.60bn vs year-ago $1.58bn and reported profit of ~$50m vs year-ago -$111.7m. Year to date revenue is well above the assumptions underlying the illustrative scenario provided at FY20 Results. SEEK ANZ, OES and Zhaopin have performed well above the illustrative assumptions, with SEEK Asia also above those assumptions but to a lesser extent. Revenue growth has been driven by a mix of rehiring of roles lost during previous months, and growth in some sectors.

ECONOMIC NEWS

Jobs data 

Key statistics:

Seasonally adjusted estimates for October 2020:

• Unemployment rate increased to 7.0%.
• Participation rate increased to 65.8%.
• Employment increased to 12,773,900.
• Employment to population ratio increased to 61.2%.
• Underemployment rate decreased to 10.4%.
• Monthly hours worked increased by 21 million hours.
• Unemployment increased by 25,500 to 960,900 people (and increased by 238,900 over the year to October 2020)
• Full-time employment increased by 97,000 to 8,643,700 people, and part-time employment increased by 81,800 to 4,130,200 people
• Over the year to October 2020, full-time employment decreased by 186,800 people and part-time employment increased by 54,500 people
• The part-time share of employment over the past 12 months, increased 0.8 percentage points to 32.3%.

• Scott Morrison said he wouldn’t compromise Australia’s national security and sovereignty, as Beijing ramped up its criticism of his government.

BONDS

COVID – 19 NEWS

• U.S. deaths from the coronavirus surpassed 250,000. 1707 Americans died yesterday alone.
• South Korea may review raising the social distancing steps further to level 2 if the average daily number of newly confirmed coronavirus cases exceeds 200 for a week.
• Freezers required to store Covid-19 vaccines are in place at health systems that are preparing to administer the initial doses once the shots receive a green light from regulators.
• New Jersey has reported daily cases in excess of 4,000 three times this week.
• Italy registered 753 deaths related to Covid-19 on Wednesday. France reported 28,383 new confirmed coronavirus cases on Wednesday.

BONDS

ASIAN NEWS

• President Xi Jinping pledged that China wouldn’t engage in decoupling. “We will not reverse course or run against the historical trend by ‘decoupling’ or forming a small circle to keep others out,” Xi said.
• No Joy for Joyy after Muddy Waters calls the company a fraud. Muddy Waters Research founder Carson Block said Joyy’s live-streaming service YY is “guilty of bot forming, creating fake transactions and having fake users.”

EUROPEAN AND US HEADLINES

• IIF says governments and companies took on US$15 trillion in new debt in first 9 months of 2020.
• Apple will halve App store cuts for small business.
• Soybeans traded at the highest level in more than six years as increasing demand from top importer China.

• EIA data shows demand for fuel in US as restrictions ramp up ahead of Thanksgiving.
• UK EV company to list through a Spac deal. Arrival worth around US$5.4bn.

And finally….

Clarence

XXX