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The ASX traded once again in a narrow range with iron ore miners the standout. The ASX 200 rose 25 to 6615 (0.4%). Dow futures down 44 points. It was all about BHP, RIO and FMG today on the back of iron ore. FMG hit all-time highs up 13.3% and BHP were boosted by the twin forces of higher oil and higher iron ore, finishing up 4.9%. In energy stocks WPL rose 1.9% but the rest of the sector missed out on the good cheer. Banks were wishy washy with the Big Bank Basket off to $145.74, insurers flat lined and MQG rose 0.2% on news of its acquisition. Healthcare felt a little peaky today CSL down 0.7% and FPH off 3.2%. The industrials eased and without stimulus it was company specific moves. In corporate news, MQG announced a US$1.7bn acquisition of US based fund manager Waddell & Reed Financial. QAN down 1.1%, recovery plan on track. Domestic capacity now at 68% of pre-COVID levels & to rise to nearly 80% in 3Q21 as domestic borders re-open. KGN up 7.7%, acquires online retailer Mighty Ape for $122.4m. APT down 2.4%, November underlying sales $2.1bn vs year-ago $1.0bn. US now the major contributor. On the economic front, the total value of new loan commitments for housing rose 0.7% to $22.7 billion in October vs expectations of +2.5%. The seasonally adjusted balance on goods and services surplus increased $1,641m to $7,456m in October vs expectations of $5.8bn. The 10-year yields steady at 0.99% and the AUD pushing a little higher at 74.04c. Asian markets off slightly with Japan down 0.16% and China down 0.11%.
- ASX 200 up 30 to 6620.
- High 6628Low 6601. Narrow range. Iron ore the big feature.
- Big Bank Basket down to $145.74
- All Tech down 0.67%
- Dow Futures down 44
- Gold improves to AUD$2478
- 10-year yields pushing up to close to 1% at 0.99%.
- AUD rises to 74.04c
- Bitcoin rises to $19,110
- Asian markets off slightly with Japan down 0.16% and China down 0.11%.
- FMG +13.27% iron ore ensures record high.
- SFR +5.19% commodity price rises.
- WHC +8.79% coal price rises.
- KGN +7.70% Buys the Mighty Ape.
- MIN +7.56% iron ore rises.
- MSB -% profit taking.
- SZL -3.02% business update
- AMP -3.12% more issues with ASIC.
- A2M -2.54% China blues.
- 4DX -7.41% profit taking.
- NOX -10.16% completes placement
- CRW +12.57% day two, much better.
- MCP +12.00% bargain hunters.
- FMS +15.38% iron ore prices.
- 3DP +7.69% punters are back.
- Speculative Stock of the Day: Creso Pharma +53.97% UN decision to declassify cannabis and new purchase orders from EU.
- Biggest Winners: FMG, WHC, KGN, MIN. MGX, RIO, PRN and OZL.
- Biggest Losers: AND, HTA, MSB, FPH, AMP, CAR and Z1P.
- Afterpay (APT) -2.39% November underlying sales $2.1bn vs year-ago $1.0bn.ANZ $0.9bn vs year-ago $0.6bn. US $1.0bn vs year-ago $0.3bn. UK $0.2bn vs year-ago $0.05bn. Referrals to its global retailers continued to grow strongly with over 35m leads generated during the month of November (147% up on November 2019). Total US customers now exceed 13m.
- Regis Healthcare (REG)+0.54%Regis thought to be considering a real estate spin-off. REG reportedly looking at options to fend off potential acquirers following the rejection of Washington H Soul Pattinson’s offer. Regis’ latest set of accounts value the plant and equipment at $1.1bn. Sources say there is currently no plan to sell or divest the assets.
- Westpac (WBC) -0.49% APRA agrees to court-enforceable undertaking (CEU) from Westpac regarding its risk governance. The CEU requires Westpac to: Develop an integrated plan that incorporates all its major risk governance remediation programs, covering both financial and non-financial risks. Obtain independent assurance over the implementation of the plan with direct reporting to APRA. Assign accountabilities for delivery of the plan to named executives and Board members and incorporate outcomes into remuneration decisions.
- Qantas (QAN) -1.08% Group domestic capacity at 68% of pre-COVID levels for December and will rise to nearly 80% for Q3. While the group will post a substantial statutory loss for FY21, it expects to be close to break even at the underlying EBITDA level for H1 and net free cash flow positive (excluding redundancies) in H2. By 31-Dec, 50% of redundancy payments associated with 8,500 job losses will have been made. At the end of November, the group had $3.6bn in available liquidity. This facility is expected to be increased by about $500m before the end of the calendar year. The recovery plan is on track to deliver $600m in structural cost benefits in FY21, reaching at least $1bn in annual cost improvements from FY23 onwards. Balance sheet repair process expected to begin in H2 of FY21. Group expects its current domestic market share of above 70% to be maintained CEO comments: “International travel is likely to be at a virtual standstill until at least July next year and it will take years to fully recover, which means we’re carrying the overhead for billions of dollars worth of aircraft in the meantime. We’re also facing a revenue drop of at least $11bn this financial year alone compared to preCOVID.”
- Shaver Shop (SSG) +3.77% Acquires six remaining franchise stores in NSW for $13m. Expected to add $16-17m in sales in the first full year of ownership. The six stores are located in metro Sydney: Blacktown, Burwood, Castle Towers, Chatswood, Galleries (CBD), and Parramatta. To fund the transaction using cash and debt facilities, will complete on 1 February.
- Splitit Payments (SPT) -2.66% Merchant sales volume of US$15.3m during Black Friday shopping week, up 216% vs year ago. November merchant sales up 255% vs year ago. Total shoppers >410K, up 48K vs Q3. Total merchants >1600, up 20% vs Q3.
- Macquarie (MQG) +0.19% To acquire Waddell & Reed for US2500c/share in cash representing total consideration of US$1.7bn. A premium of ~48% to the December 1 closing price. On completion, MQG has agreed to sell Waddell & Reed Financial, Inc.’s wealth management platform to LPL Financial Holdings Inc. As a result of the transaction, Macquarie Asset Management’s assets under management are expected to increase to over $465bn. At the end of September Waddell & Reed Financial, Inc.’s asset management business had US$68bn of assets under management and its wealth management business had assets under administration of US$63bn.
- Kogan.com (KGN) +7.70% Acquires online retailer Mighty Ape for $122.4m.Mighty Ape is one of New Zealand’s leading online retailers, with a focus on gaming, toys and other entertainment categories. The acquisition will be funded from the company’s cash reserves. Significant revenue and cost synergies expected. Mighty Ape has forecast FY21 Revenue of $137.7m, Gross Profit of $45.7m and EBITDA of $14.3m (pre synergies).
- Macmahon Holdings (MAH) +6.00% Extends and upsizes debt facility to $170m from $75m.The maturity date of the facility has been extended by 2 years from July 2021 to July 2023 at an interest rate of under 3% plus swap rate. The facility may be used for equipment financing, working capital, and general corporate purposes.
- The total value of new loan commitments for housing rose 0.7% to $22.7 billion in October vs expectations of +2.5%.
- The seasonally adjusted balance on goods and services surplus increased $1,641m to $7,456m in October vs expectations of $5.8bn. Exports: +5% vs survey: +4%, imports: +1% vs survey: +4%.
Think this shows the effect of CV19 on student and tourist numbers.
COVID – 19 NEWS
- The U.S. recorded its deadliest day ever, with Covid-19 fatalities reaching more than 2,700 to surpass the previous peak in April.
- Angela Merkel said Germany will extend its partial lockdown by three more weeks
- Spain will allow families to meet in groups of up to 10 on Christmas Eve, Christmas, New Year’s Eve and New Year’s Day.
- UK has approved the first vaccine use in a Western country.
- US hospitalisations at all-time high.
- China Caixin PMI Composite Nov: 57.5 (prev 55.7).
China Caixin PMI Services Nov: 57.8 (est 56.4; prev 56.8).
- China is about to allow Australian coal back into the country. The Alpha Era vessel to discharge Australian coal at Fangchenggan.
- Japan to phase out new petrol cars by mid 2030s.
EUROPEAN AND US HEADLINES
- Morgan Stanley has said stocks are overbought and a key risk is the US Treasury market where 10-year rates are now near 1%.
- The US House of Reps has approved legislation could lead to Chinese companies being kicked off US exchanges if they do not allow regulators cannot review audits.
- Democrats signal compromise in stimulus bill. Biden says it’s a ‘down payment’.
The day after his wife disappeared in a kayaking accident, Paddy O’Flynn answered his door to find a grim-faced constable waiting in the front yard.
“We’re sorry, Mr. O’ Flynn, but we have some information about your dear wife, Maureen” said the officer.
“Tell me! Did you find her?” O’Flynn asked.
The constable said, “Sir, I have some bad news, some good news and some really great news. Which would you like to hear first?”
Fearing the worst, Mr. O’ Flynn said, “Give me the bad news first.”
The constable said, “I’m sorry to tell you, sir, but early this morning we found your poor wife’s body in the bay.” Holy Mother of God!” exclaimed O’ Flynn, at least she’s missing no longer. Swallowing hard, he asked, “What could possibly be the good news?”
The constable continued, “Well, when we pulled the late, departed up, she had 12 of the best-looking Atlantic lobsters that you have ever seen clinging to her. Haven’t seen lobsters like that since the 1960’s, and we feel you are entitled to a share in the catch.
“Stunned, O’ Flynn demanded, “Glory be to God, if that’s the good news, then what’s the really great news?”
The constable replied, “We’re gonna pull her up again tomorrow.”