The ASX 200 stumbled 60 points to 6821 (0.9%) closing near lows, as banks came under some pressure ahead of CBA results (and dividend) tomorrow. First real results day. Dow futures slipped slightly down 11 points. The Big Bank Basket fell back to $159.55 although MQG rose 6.6% after its positive operational update. Insurers were also in favour as bond yields rally, IAG up 2.4% and SUN up 2.8% as results show serious progress being made on simplification. Industrials slipped led by CSL down 1.3% and WOW off 1.5%. Also some of the telcos slid back with TPG down 2.3% and platform stocks like REA and SEK under some pressure. REITs under pressure too on bond yields with GMG down 2.5% and VCX down 3.2%. FMG was a highlight as Macquarie speculated on the size of its dividend, up 0.7%. Not much else shaking in miners though WPL and STO were disappointing given oil rising only finding small losses. Plenty happening in corporate news, BLD disappointed falling 7.4%, JHX smack on the money rising 1.0% and CGF fell 14.8% after disappointing with the dividend. In economic news, NAB business confidence rose 5 index points in January, to an above-average 10 points. In contrast, business conditions pulled back to +7 index points from the very strong December, to remain just above average and back around November levels. 10-year yields rise again to 1.22%. Asian markets firm with Japan flat though China up 1.4%.

Today’s Highlights

  • ASX 200 up down 60 to 6821 (-0.9%)
  • High 6900 Low 6829.
  • Big Bank Basket down to $159.55. RBNZ clamps down on bank lending.
  • All Tech Index down 0.8%. APT down 0.9%
  • Dow Futures down 11 points.
  • Gold rises to AUD$2381.
  • 10-year yields rise again to 1.22%.
  • AUD heading higher at 77.26c
  • Bitcoin pumps to US$46295.
  • Asian markets firm with Japan flat though China up 1.4%.

STOCKS

  • CGF -14.82% dividend disappointment.
  • SZL +4.94% BNPL bounce continues.
  • Z1P -2.65% profit taking.
  • ASM +3.94% titanium powder approved.
  • SPL +4.62% program global expansion
  • ABC -5.90% taking a cue from BLD perhaps.
  • CCP -4.82% profit taking perhaps.
  • WZR -4.17% nothing changes. Can’t keep it up.
  • AVA -5.43% ex dividend. Remember those.
  • 5GG -6.62% coming back to Earth.
  • CSL -1.27% slide continues. Macquarie research report ambivalent.
  • FMG +0.72% focus on dividends.
  • CWN – trading halt Packer’s Crown slips.
  • SIG -4.79% brokers sour on result.
  • IPO of the Day: BikeExchange (BEX) – 11.54% lacklustre listing. Raised $20m at 26c.Market cap of $77m. Sales $12.3m.
  • Speculative Stock of the Day: Reedy Lagoon (RLC) +176.47% decent volume following an update on the RLC Iron project to create ‘green iron’ to smelt magnetite using biochar instead of coal.
  • Biggest Winners: PLL, MQG, HT1, SZL, GNC, SPL and APE.
  • Biggest Losers: CGF, EHL, BLD, VUL, ABC, ABB, PPH and CCP

TODAY

  • Suncorp Group (SUN) +2.78% First-half cash earnings $509m vs year-ago $365m. Revenue $7.35bn vs consensus $5.76bn. Profit $490m vs year-ago $642m. Gross Premiums Written $4.34bn vs year-ago $4.18bn. Group underlying insurance trading ratio (ITR) 8.4% vs year-ago 9.3%. Fully franked interim dividend of 26cps vs year ago 26cps. Outlook: “While the operating environment has improved, the outlook remains uncertain given the COVID-19 pandemic and its economic impact. The executive team has developed a three-year plan to drive growth and further efficiencies across the core businesses. The group’s operating expense base including restructuring charges is expected to be around $2.8bn in FY21 and FY22. The FY23 operating expense base is expected to return to around $2.7bn, with efficiency gains effectively offsetting inflation and the costs of investing in growth over the three-year period.”
  • Shopping Centres Australasia Property Group (SCP) -0.85% H1 Funds from Operations (FFO) 6.72 cents per unit (cpu) vs year-ago 6.21 cpu. Reports H1: Adjusted Funds from Operations (AFFO) 5.80cpu vs year-ago 5.4cpu. Statutory Net Profit after tax $102.9m vs year-ago $90.2m. Net property income $88.3m vs year-ago $99.2m. Distribution 5.70 cpu. FY21 Guidance: FFO per unit guidance is at least 14.4cpu. AFFO per unit guidance is at least 12.2 cpu. Medium-term target is to return AFFO per unit to the pre-COVID level of 7.5cpu per half.
  • Macquarie Group (MQG) +6.62% Trading conditions across the group improved in the quarter. Markets-facing businesses’ (Commodities and Global Markets (CGM) and Macquarie Capital) combined 3Q21 net profit contribution significantly up on 3Q20. FY21 YTD net profit contribution broadly in line with FY20 YTD. Group financial position comfortably exceeds regulatory requirements. Group capital surplus of $8.1bn. Bank CET1 ratio 12.1% (Harmonised: 15.5%), Leverage ratio 5.2% (Harmonised: 6.0%), Liquidity Coverage Ratio 172%, Net Stable Funding Ratio 112%. Outlook: Currently anticipate the FY21 result to be slightly down on FY20.
  • James Hardie Industries (JHX) +1.03% Q3 Adjusted operating profit (NOPAT) US$123.3m vs consensus US$105.3m. Revenue US$738.6m vs consensus US$703.3m. EBIT US$167.9m ex-items vs consensus US$144.5m. Special dividend of 70c/share. FY Guidance (Mar 2021): Adjusted NOPAT expected between US$440-450m vs prior guidance US$380-420m and consensus US$432.7m. Intends to resume its ordinary dividend policy in FY22, beginning with a H1 FY22 dividend to be declared in November 2021.
  • Challenger (CGF) -14.82% H1 normalized profit $136.8m vs consensus $138m.Statutory profit attributable to equity holders $222.8m vs year-ago $220.4m. Normalised RoE after-tax 8.0% vs year-ago 10.4%. Total assets under management $96.1bn vs year-ago $86.4bn. Interim dividend 9.5c vs year-ago 17.5c. FY Guidance: Normalised profit before tax guidance expected in the range of $390m to $440m. Earnings are expected to be weighted to H2 reflecting the gradual deployment of Life’s excess cash and liquid investments over the year.
  • Emeco Holdings (EHL) -8.06% H1 operating EBITDA $117.9m vs consensus $116.5m. Revenue $298.6m vs consensus $290.8m. Profit $3.3m vs year-ago $26.9m. Outlook: Broadly flat earnings expected in the Rental division in 2H21, with growth expected in FY22. Continued earnings growth in Pit N Portal from underground rental and new mining services projects commencing and ramping up into FY22. Growth in external revenue and earnings in Force workshops in 2H21. Group EBITDA margins expected to remain around current levels, depending on the ratio of services to rental, with cash flow and ROC remaining strong. FY21 sustaining capex expected to be approximately $115m, including asset rebuilds and replacement capex. Committed FY21 growth capex is $27m.
  • Boral (BLD) -7.39% H1 underlying Net Profit after tax $156m vs year-ago $156m. Reports H1: Revenue $2.70bn vs year-ago A$2.96bn. Revenue consensus is $2.68bn. EBIT ex-items $215m vs year-ago $234m. FY Guidance (Jun 2021): Boral Australia: Underlying market conditions for the remainder of FY21 are uncertain, do not expect EBIT margins (excluding Property) in H2. Boral North America: Building Products order book at the end of December looks good and production volumes should continue to ramp up to meet strong market demand. Benefits are expected from price increases announced late in 1H FY21. Fly Ash: Expected to be impacted by continued COVID-related utility slowdowns and intermittent shuts, typical 2H seasonality that results in lower earnings and margins.
  • Dexus Property Group (DXS) -3.55% H1 Funds from Operations (FFO) $0.344 vs year-ago $0.345. Reports H1: FFO consensus is $0.24. Revenue $626.6m vs year-ago $583.5m. Rent collections were at 96.0% for the Dexus portfolio in the six months to 31 December 2020. Adjusted FFO $0.288 vs year-ago $0.269. Net Profit after tax attributable to security holders after tax $442.9 vs year-ago $994.2. Net Tangible Assets $10.96 vs $10.86. Distribution confirmed at A$0.288/security. Outlook: Dexus expects an FY21 full year distribution per security amount that is consistent with FY20. The FY20 full year distribution per security amount was 50.3 cents.
  • Scentre Group (SCG) –1.08% Expects H2 distribution of 7cps. Preliminary cashflow for the year-ended December 2020: Cash receipts $2.36bn, net operating cash flow $771m.
  • Crown (CWN) – Trading halt: NSW commissioner’s inquiry report to be released today. Crown intends to make an announcement following its release.

ECONOMIC NEWS

  • NAB survey business confidence rose 5 index points in January, to an above-average 10 points. In contrast, business conditions pulled back to +7 index points from the very strong December, to remain just above average and back around November levels.
  • RBNZ it will reinstate mortgage lending restrictions on March 1 and tighten them further for investors from May 1. NZ property prices heading only one way. Fastest pace since March 2017.

CV19 NEWS

  • Hong Kong Chief Executive Carrie Lam said there were indications the city’s Covid-19 wave was subsiding just in time for Lunar New Year.
  • A team of WHO scientists will be holding a briefing on their findings so far on how the virus got started.
  • The chief of the US CDC suggested that testing people for the coronavirus before U.S. domestic flights could help reduce transmission.
  • Texas GOP representative Ron Wright has died from CV19.
  • Vaccine tracker: More than 134m doses now been given. 4.74m a day. US has 43.1m doses in arms.

BOND MARKETS

ASIAN NEWS

  • China urges Tesla to abide by its laws and provide better governance.
  • NZ breaks off relations with Myanmar.
  • Softbank lays Golden Eggs with latest results. The two Vision Funds saw a US$13bn rise in the valuation of their investment holdings during the three months to December, boosted primarily by the rise in holdings of ride-hailing group Uber and DoorDash. WeWork long forgotten. Makes even Bev look pedestrian.

US AND EUROPEAN HEADLINES

  • Bitcoin on a surge past US$47,000.
  • EU could well follow us here in making big tech pay for news.
  • New UK quarantine restrictions come into effect this week although no hotels have been booked for the arrivals from overseas.
  • South Africa has halted the roll out of the AstraZeneca vaccine. Not that effective on its variant.
  • UK rock stars are up in arms about Brexit and the cost of touring in EU now. One US poll says third of all Americans have not heard of Brexit.
  • US Senate impeachment trial kicks off tomorrow in the US. 

And finally…oldies but goldies…famous quotes on sprt

Twelve of the finest (unintentional) double-entendres ever aired on TV and radio:

1. Ted Walsh – Horse Racing Commentator – ‘This is really a lovely horse. I once rode her mother.

‘2. New Zealand Rugby Commentator – ‘Andrew Mehrtens loves it when Daryl Gibson comes inside of him.

‘3. Pat Glenn, weightlifting commentator – ‘And this is Gregoriava from Bulgaria . I saw her snatch this morning and it was amazing!’

4. Harry Carpenter at the Oxford-Cambridge boat race 1977 – ‘Ah, isn’t that nice. The wife of the Cambridge President is kissing the Cox of the Oxford crew.

‘5. US PGA Commentator – ‘One of the reasons Arnie (Arnold Palmer) is playing so well is that, before each tee shot, his wife takes out his balls and kisses them. Oh my god !! What have I just said??’

6. Carenza Lewis about finding food in the Middle Ages on ‘Time Team Live’ said: ‘You’d eat beaver if you could get it.’

7. A female news anchor who, the day after it was supposed to have snowed and didn’t, turned to the weatherman and asked, ‘So Bob, where’s that eight inches you promised me last night?’ Not only did HE have to leave the set, but half the crew did too, because they were laughing so hard!

8. Steve Ryder covering the US Masters: ‘Ballesteros felt much better today after a 69 yesterday.’

9. Clair Frisby talking about a jumbo hot dog on ‘Look North’ said: ‘There’s nothing like a big hot sausage inside you on a cold night like this. ‘

10 Mike Hallett discussing missed snooker shots on ‘Sky Sports’: ‘Stephen Hendry jumps on Steve Davis’s misses every chance he gets.’

11. Michael Buerk on watching Philippa Forrester cuddle up to a male astronomer for warmth during BBC1’s UK eclipse coverage remarked: ‘They seem cold out there. They’re rubbing each other and he’s only come in his shorts.’

12.. Ken Brown commentating on golfer Nick Faldo and his caddie Fanny Sunneson lining-up shots at the Scottish Open: ‘Some weeks Nick likes to use Fanny; other weeks he prefers to do it by himself

Clarence

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Gold.