The ASX 200 finished off highs again up 48 points at 6679. Dow Futures slipping slightly by 16 points on hopes for a stimulus package. Banks were all the rage leading us higher with the Big Bank Basket up to $150.83. CBA led the charge up 0.9% with ANZ holding its AGM today and rising 1.3%. MQG too in the green up 0.6% but insurers still becalmed. Big miners bounced back hard as commodities continued to stay strong. BHP up 1.8%, RIO up 1.7% and FMG up 2.3%. Gold miners too in demand as bullion rose, NCM up 1.0%, NST up 4.1% and GOR up 5.4%. Oil stocks slightly higher with WPL up 0.8% and STO flopping 1.1% lower though.  Elsewhere APT continues to rally strongly as it threatens to overtake TLS with its market cap. The stock closed up 4.2% with the All–Tech Index up 2.5% and XRO up 2.2%. Healthcare under wraps but other defensives better with TCL up 1.4% and WOW up 0.8% and WES up 0.2%. In corporate news, CBA to merge Aussie Home Loans with Lendi. CBA will retain a 45% stake. Transaction not expected to have a material financial impact. UWL in a trading halt, to raise $60m at 150c to fund the purchase of Telstra’s Velocity & South Brisbane exchange assets. TLS unchanged. REX up 8.0%, told it can commence domestic operations between Sydney and Melbourne from March 1, 2021. BLX up 12.7% after a guidance update. A strong 1H expected. The Westpac-MI leading Index rose 0.5% in November, follows an upwardly revised 0.3% gain in October. Manufacturing and services PMIs both edged up. 10-year yields steady at 0.96% and the AUD slightly higher at 75.53c. Asian markets slightly higher with Japan up 0.24% and China up 0.22%

Today’s Highlights

  • ASX 200 up 48 to 6679.
  • High 6720 Low 6650. Afternoon sell off.
  • Big Bank Basket higher again at $150.83
  • All Tech up 2.47%
  • Dow Futures down 16 points.
  • Gold rises to AUD$2459
  • 10-year yields steady at 0.96%
  • AUD rises to 75.53c
  • Bitcoin steady at $19397
  • Asian markets slightly higher with Japan up 0.24% and China up 0.22%

STOCKS

  • RSG +10.34% PRU +7.02% gold miners blip higher.
  • AD8 +9.99% thin volume.
  • WHC +7.89% Winchester South coal reserves.
  • ANZ +1.35% AGM comments.
  • Z1P +6.70% technical breakout.
  • MP1 +6.07% rally gets back on track.
  • SZL +11.52% playing catch up to APT.
  • PLS -8.61% ex-entitlement.
  • SSM -12.13% new contract but no VIC or NSW perhaps
  • BSA +5.17% wins NSW and VIC NBN contract.
  • TLG -13.60% successful placement.
  • OPY +27.31% business update.
  • SPT +21.84% catch up football.
  • BLX +12.68% switched on today.
  • AMP -0.86% UBS says breaking up is hard to do.
  • Speculative Stock of the Day: Legacy Iron Ore (LCY) +22.50% drilling to commence at Yilgani targets
  • Biggest Winners: SZL, RSG, AD8, WHC, PRU, Z1P, DBI and MP1.
  • Biggest Losers: SSM, PLS, PRN, API, CEN, OCL and COE.

TODAY

  • Downer EDI (DOW) -1.68% Speculation Downer EDI is looking to offload the rest of its mining business. The unit consists of the Open Cut East, Underground and Otraco tyre management components. Cimic’s Thiess, Seven Group Holdings, and Macmahon Holdings named as logical bidders. It is also understood that Downer would hope to net $400m for the rest of the unit. Complicating the sale process is uncertainty regarding the demand for coal.
  • Openpay Group (OPY) +27.31% November total transaction value $35.7m, up 121% vs year ago. At the end of November, Openpay had 1.3m active plans, up 232% vs pcp. Active customers totalled 427k, up 139%, and active merchants jumped 35% to 2,476. Commencing its launch in the United States, with its consumer and business-to-business (B2B) platforms.
  • Beacon Lighting Group (BLX) +12.68% Expects H1 profit between $19.5-21.5m vs year-ago $9.5m.Sees H1 revenue sales in the range of $147.0-152.0m vs year-ago $122.5m.
  • ANZ (ANZ) +1.35% AGM comments, according to CEO Shayne Elliot, 92% of home loan customers that were granted a deferral have already rolled off, or intend to do so.
  • MACA (MLD) +1.80% Completes institutional placement and entitlement offer. Raises $59m priced at 102c/share.
  • Regional Express Holdings (REX) +7.98% Told it can commence domestic operations between Sydney and Melbourne from March 1, 2021. ASIC to place restrictions on REX following continuous disclosure failures. The decision means REX will not be able to rely on reduced-disclosure rules and instead must issue a full prospectus in order to raise funds from investors.
  • APA Group (APA) +0.88% Estimated H1 distribution of 24c/unit.
  • Freedom Foods Group (FNP) – In advanced discussions with a new investor to support the capital and operational turnaround of the business. Adds it is likely that an update on the capital raising will occur in January 2021.
  • CBA (CBA) – To merge Aussie Home Loans with Lendi. CBA will retain a 45% stake in the combined business, will also receive deferred consideration and a pre-completion dividend of $105m. The transaction is not expected to have a material financial impact on CBA’s capital position. Completion expected by the mid-calendar year 2021.
  • Uniti Group (UWL) – To acquire Telstra’s Velocity & South Brisbane exchange assets for $140m. Announces capital raise of up to $60m via placement and SPP at 150c/share. Expects full-year pro forma underlying EBITDA (ex-TLS Velocity acquisition) of $95m. Sees revenue (ex-TLS Velocity acquisition) of $185.3m with revenue including TLS acquisition of $206.9m. Sees underlying EBITDA (ex-TLS Velocity acquisition) of $95.0m, including TLS Velocity acquisition of $116.0m. Notes sustained strong organic growth from annuity infrastructure networks. Observes $39m of cash and $265m of drawn debt as of December 1, following completion of OptiComm and Harbour ISP acquisitions with strong free cash flow generation.
  • Codan (CDA) +5.11% Expects H1 profit of $40m.During the AGM in October, CDA expected that last year’s record H1 result of $30m would be exceeded in FY21. Also highlights the communications business will enter H2 with an order book in excess of $30m.
  • Service Stream (SSM) –12.13% The company announced a multi-year 4 +2+2 Unified Field Operations agreement with NBN for Queensland, South Australia, Northern Territory and Western Australia, with additional regions able to be allocated at nbn’s discretion. It is expected to generate approximately $70m of revenue for the Group in its first year, with subsequent years dependent on annual work volumes. BSA won the NSW and VIC contract by the looks of it.

ECONOMIC NEWS

  • The NZ economy is bouncing back faster than anticipated with deficits and debt much lower too.
  • Unemployment will now peak at 6.9% at the end of next year rather than the 7.8% predicted in September.
  • Australian Services PMI increased to 57.4 in December from 55.1 in November, preliminary data showed. It was the highest reading in five months and the fourth consecutive expansion in the services sector.
  • Local manufacturing PMI in Australia rose to 56 in December from 55.8 in November, preliminary data showed. The latest reading marked the sixth straight month of expansion and the highest since July.
  • The Westpac-MI leading Index rose 0.5% in November, follows an upwardly revised 0.3% gain in October.

BONDS

COVID – 19 NEWS

  • South Korean authorities are reviewing the possibility of raising the social distancing to level 3.
  • U.S. states and territories will get US$140m to prepare for Covid-19 vaccination campaigns and US$87m for tracking and testing.
  • U.S. hospitalisations for the coronavirus increased by more than 1,200 patients a day in the six days through Tuesday. There were 112,483 Covid-19 patients in U.S. hospitals as of Dec. 15, a 7.1% increase since Dec. 9.
  • France’s rolling seven-day average of new cases fell below 12,000 on Tuesday, marking a second day of pause.
  • New Yorkers can expect a shutdown of all but essential businesses soon after Christmas, Mayor Bill de Blasio said.
  • China has secured 100m doses of the Pfizer/BioNTech vaccine to boost supply. The German vaccine maker will supply no fewer than 100 million doses for China by 2021

ASIAN NEWS

  • Australia will challenge barley ban through WTO.
  • Top Chinese chip maker Semiconductor Manufacturing fell around 10% after the surprise resignation of one of its top executives.
  • MSCI Inc. became the third index provider to delete some Chinese stocks from its benchmarks, firms include China Railway Construction Corp, China Spacesat Co., China Communications Construction Co., CRRC Corp., Hangzhou Hikvision Digital Technology Co., Dawning Information Industry Co. and Semiconductor Manufacturing International Corp.

EUROPEAN AND US HEADLINES

  • Gmail down for second day in a row.
  • MacKenzie Scott has given away US$4.2bn in the last four months.
  • UK draws up plans to rival Singapore post Brexit. Tonnage tax the focus and flying the Union Jack (if there still is one).
  • Facebook is moving its data from Ireland back home.
  • Travellers to the UK are allowed to end self-isolation early if they pay for a coronavirus test and get a negative result five days after arriving. Trouble is that some test providers have been overwhelmed by demand and have had to pull out.
  • Federal Reserve meeting. Still waiting for Stimulus Lite.
  • Vanguard Total Stock Market Index Fund, which includes both a mutual fund and an exchange-traded fund, had US$1.04 trillion of assets as of Nov. 30, company data show.

And finally…

Clarence

XXX