The ASX put on 37 points today back up to 6857 (0.5%). Dow futures up 82 points. It was all about results today and generally pretty upbeat. CBA dropped 1.5% after its dividend disappointed slightly and dragged the others with it but the whole sector is up 50% from its lows. The Big Bank Basket steady though at $158.17. Insurers though did well, IAG results cheered and the stock rose 4.5% with a decent bounce in CGF after brokers turned mildly positive, up 4.7%. MQG kicked 3% again as brokers turned just positive with gains in MFG and ASX of 3.0% and 2.3% respectively helping the sector higher. Miners were mixed. BHP rose 1.0% and RIO up 0.7% but FMG slipped slightly by 0.6% after MIN CEO accused the company of bullying. In the gold sector NST shone on its results up 1.6%. In the tech space it was rocket ships launched as APT took off yet again up 4.2%, Z1P joined in up 12.2% as the CEO is in the US banging the gong. More prosaic industrials also firmed led by WOW up 1.2%, TLS up 1.0% and TPG up 2.3%. Even CSL rose slightly on a broker upgrade up 0.9%. In corporate news, there was so much with so much more to come. CIM down 17.1%, underlying profit missed consensus. Dividend 60c. On the economic front, Westpac-Melbourne Institute Consumer Confidence index for February: +1.9% to 109.1. The seasonally adjusted estimate for total dwellings approved rose 10.9% in December. 10-year bond yield dips to 1.22%. AUD stronger at 77.41c. Asian markets mixed with Japan down 0.1% and China up 1.7% ahead of New Year.
- ASX 200 up 36 to 6857.
- High 6869 Low 6828. Narrow range. Results focus.
- Big Bank Basket steady at $158.17.
- All Tech rushes higher by 2.2%.
- Dow Futures up 82.
- Gold dips to AUD$2380.
- 10-year yields rise again to 1.22% March 9th low of 0.61% a distant memory.
- AUD rallies to 77.41c
- Bitcoin pushes on to US$46154
- Asian markets mixed with Japan down 0.1% and China up 1.7% ahead of New Year.
MARCUS TODAY TEAM INSIGHTS
- MARCUS STRATEGY –The much anticipated CBA results were out this morning – we have described them as “OK not dazzling” and the rather negative tone of the research pre-results is unlikely to change much tomorrow by the looks of it. The dividend payout a bit conservative going ex-dividend on March 4. Most of the overnight themes were quite positive we have a look at those. We have made some changes to the Growth and Income portfolios and chase our tails trying to keep up with the results and results reactions. READ MOREHENRY’S TAKE – Two stocks added yesterday in PLS and AGY. A look today at one Bevan owns and whether it is the big one? Plus every four years it’s not just the US President that gets elected but, law changes in the cannabis market with one stock to watch as a speculative buy. Cannabis ETF have doubled since pre-US election in October. Ask the Analyst Friday 5 pm Register for the webinar now. READ MORE
- Z1P +12.16% US rocket launch.
- JMS +9.38% no idea but about time.
- MP1 +7.33% positive business update.
- CWN -3.35% back as storm clouds gather. Directors jump ship.
- IHR +26.09% Slattery effect.
- PBH +4.83% NHL partnership.
- CIM -17.08% results disappoint.
- BVS -7.48% slide resumes.
- VEA +6.32% refinery closure.
- VUL -8.88% buys Geothermal team.
- 4DS -7.50% few sellers appear.
- CXO -11.29% Unearthed Bell Potter presentation.
- RNT -8.77% fizz evaporating.
- WZR -6.52% the QBE of the fintech market.
- RHY +18.70% quarterly brings buyers. Cap raise coming?
- CAN +15.38% cannabis starting to attract attention.
- DOC +13.03% Motley Fool write up.
- Speculative Stock of the Day: One to watch BlackEarth (BEM) +122.83% signs with world leading graphite supply group.
- Biggest Winners: Z1P, JMS, AD8, MP1, PLL, IMD, VEA, APX, TYR and GNC.
- Biggest Losers: CIM, VUL, BVS, OML, ERA, PLS, TLG and ALK.
- CBA (CBA) -1.49% H1 cash profit down 10.8% to $3.89bn vs consensus $3.71bn. Statutory profit down 21% to $4.88bn, mainly due to lower realised gains on the sale of divestments, including BoComm life. Revenue down 1% to $11.9bn. Net interest margin (NIM) 2.01%, down 3bps on 2H20 mainly due to higher liquid balances and the impact of low rates. Cash rate headwinds are expected to be 7bps to NIM in FY21. CET1 capital ratio 12.1%, up 100bps on 2H20. Strong organic capital generation and ongoing benefits of divestments supported higher capital levels which remain well above APRA’s requirements. H1 dividend 150c/share, fully franked, down 25% vs year ago. Payout ratio of 66.95%. Loan impairment expense and provisions up $233m on 1H20 to $882m reflecting uncertainty in the economic outlook.
- Worley (WOR) -1.50% Speculation Jacobs Engineering could be looking to sell its 9.8% stake valued at ~$567.6m. There are suggestions the proceeds could be used to fund other acquisitions.
- Computershare (CPU) +1.46% H1 management profit US$117.9m vs consensus US$117.4m. Revenue US$1.10bn vs consensus US$1.09bn. Management EBITDA US$277.7m vs consensus US$276.8m. Management EPS 21.79cps vs year-ago 28.96cps. Interim fully franked dividend 23c/share. FY21 guidance: In constant currency, sees: Management EPS to be down by around 8% vs year ago. Management EPS for H2 around 30.0cps.
- Crown Resorts (CWN) -3.35% Speculation Nigel Morrison could replace Crown Resorts CEO Ken Barton on an interim basis.
- Lynas Rare Earths (LYC) – 1.73% CEO Amanda Lacaze discloses sale of 700k shares.Lacaze owns 2.7m shares and 2.5m performance rights following the transaction. The company states the sale was to satisfy tax liabilities.
- CIMIC Group (CIM) -17.08% FY underlying Net Profit after tax (NPAT) $600.5 vs consensus $658.3m. Reports FY: Underlying Revenue $12.61bn vs year-ago $14.70bn. Underlying EBITDA $1.91bn vs consensus $2.04bn. Dividend $0.60 FY Guidance: Underlying NPAT $400-430m vs consensus $563m. Market outlook remains positive for construction and services, with new work recovering.
- Brambles (BXB) – To combine Kegstar business with MicroStar. MicroStar will purchase Kegstar for US$52.2m and issue scrip in MicroStar to Brambles as consideration. The combined entity will be approximately 15% owned by Brambles and 85% owned by MicroStar’s current shareholders. Transaction expected to complete in H1CY21.
- Northern Star Resources (NST) +1.60% H1 underlying Net Profit after tax $194.4m vs consensus $154.8m. Reports H1: Revenue $1.11bn vs consensus $1.16bn. EBITDA $472.2M vs consensus $427.0m. Cash, bullion and investments of $372m at 31 December. Interim dividend $0.095/share (fully franked). FY Guidance: On track to meet FY21 production guidance of 940,000-1,060,000oz.
- PointsBet Holdings (PBH) +4.83% signs multi-year sports betting & marketing partnership with the National Hockey League.
- Mineral Resources (MIN) -0.54% H1 underlying Net Profit after tax $430m vs year-ago $129m. Reports H1: Revenue $1.53bn vs year-ago $987.0m. Underlying EBITDA $763m vs year-ago $330m. Interim dividend 100 cents per share vs year-ago 23 cents per share. FY Outlook: Mining Services volumes expected to increase 20-25%. FY Capital expenditure $600m.
- Insurance Australia Group (IAG) +4.55% H1 Cash earnings $462m vs year-ago $380m. Reports H1: NPAT $460.0m vs year-ago $283.0m. Gross Premiums Written $6.19bn vs year-ago $6.11bn. Underlying insurance margin 15.9% vs year-ago 16.9%. Dividend $0.07. Management comments: “While our business has been relatively stable, our profitability was affected by the pre-tax $1.15bn expense we announced in November for potential business interruption claims relating to COVID-19.”
- Telix Pharmaceuticals (TLX) – Concludes research cooperation agreement with Heidelberg University Hospital in Germany. Telix and UKHD will co-develop new conjugates and constructs for diagnostic and therapeutic use. The goal of the collaboration is to identify candidates and generate sufficient data to proceed to first in human trials.
- Praemium (PPS) –0.60% H1 Net Profit after tax $3.0m vs year-ago $1.4m. Reports H1: NPAT consensus is $1.1m. Revenue $31.7m vs year-ago $26.5m. Revenue consensus is $33.5m. Adjusted EBITDA $7.3m vs year-ago $7.0m. Adjusted EBITDA consensus is $8.0m.
- Oil Search (OSH) +0.48% Papua New Guinea,Papua LNG JV partners sign fiscal stability agreement. The signing of the agreement gives full effect to the Papua LNG gas agreement signed in Apr-2019.
- Ainsworth Game Technology (AGI) -1.99% Preliminary H1 Profit Before tax (PBT) -$14m. Reports preliminary H: PBT excludes a currency translational loss of approximately -$14m. Underlying EBITDA $6m. Revenue $72m.
- Centuria Capital (CNI) -0.81% H1 operating Profit after tax $34.0m vs year-ago $33.4m. Reports H1: Operating EPS 6.2 cps vs year-ago 8.1cps. Revenue $110.2m vs year-ago $79.9m. Net tangible assets per stapled security $1.07 vs year-ago $1.10. FY21 guidance: Upgraded distribution guidance to 10.0 cents per stapled security vs prior guided 8.5 cents per stapled security (cpss). Operating earnings guidance 11.5cpss- 12.5cpss.
- ALE Property Group (LEP) +2.36% H1 Distributable Profit $21.3m vs consensus $17.1m. Reports H1: Rental revenue $31.4m vs consensus $31.7m. Interim dividend 10.75cps. FY21 Guidance: Distribution guidance of 21.5cps, +3% year on year. Gearing expected to be impacted given distributions are expected to remain above operating earnings.
- Lendlease Group (LLC) -0.25% CEO Steve McCann to retire effective 31-May; Tony Lombardo appointed replacement. Lombardo is currently CEO Asia Lendlease. The executive search for Lendlease Group CFO is well progressed and the group expects to make an announcement in this regard in coming months.
- Ioneer (INR) -2.22% Rhyolite Ridge LithiumBoron Project update; expects Bureau of Land Management’s final Record of Decision to be made in 4Q21.
- Megaport (MP1) +7.33% H1 Net Profit after tax -$38.4m vs consensus -$21.0m. Reports H1: Revenue $36.0m vs consensus $37.4m. Normalised EBITDA -$8.7m vs year-ago -$10.3m. Management comments: “As of Q2 of FY21, all three of our operating regions are EBITDA positive. This puts us on track to achieve our goal of Group EBITDA break even on a run rate basis within FY21.”
- Saracen Mineral Holdings (SAR) – H1 underlying Net Profit after tax (NPAT) $148m vs year-ago $80.2m. Reports H1: Revenue $601.7m vs year-ago $409.9m. Adjusted EBITDA $296.6m vs consensus $288.0m. Statutory NPAT $120.5m. All results relate only to Saracen, Northern Star and Saracen financial results to be combined from 12th February 2021.
- Westpac-Melbourne Institute Consumer Confidence index for February: +1.9% to 109.1.
- The seasonally adjusted estimate for total dwellings approved rose 10.9% in December.
- Private sector houses rose 15.8%, in seasonally adjusted terms, while private sector dwellings excluding houses rose 2.3%.
- The seasonally adjusted estimate for the value of non-residential building approved rose 10.1%.
- More than 134m shots given worldwide. New York City has surpassed 1m vaccine doses.
- A U.K. government advisory panel raised concerns over a further mutation of the so-called Kent variant.
- PIMCO’s co-head of Asia- Pacific says biggest risk is pricing in prematurely the end of the pandemic.
- The 10-year U.S. breakeven rate — a market-based measure of average inflation rates over the next decade — broke above 2%. PIMCO’s co-head of Asia- Pacific says biggest risk is pricing in prematurely the end of the pandemic.
Is gold the answer to inflation? Maybe not.
- China’s producer prices gained for the first time in a year in January. The producer price index rose 0.3% from a year ago, in line with forecasts, and compared with a 0.4% drop in December.
- The consumer price index fell 0.3% last month from a year earlier, following a 0.2% increase in December. Pork prices, a key driver of changes in the CPI, fell 3.9% in January from a year earlier after falling 1.3% in December.
- China saw a steep decline in travel in January ahead of the Lunar New Year, with local governments introducing testing and quarantine requirements.
- Japanese markets hit 30-year highs.
EUROPE AND US HEADLINES
- Senate gets to second base on Impeachment.
- Fox News is not going to change according to Lachlan despite ratings falls.
- Travellers to the UK risk jail if they do not come clean on trips to high-risk countries. Ironic really as UK is one of the most high risk.
- Mitch McConneell has signalled to the GOP that impeaching Trump is a matter of conscience.
- Vale Mary Wilson.
I’ve just booked a table for Valentine’s Day. I hope my wife likes snooker.
A man goes to a pet shop and buys a parrot as company for his elderly mother. The pet shop owner explains that it may need some training, suggesting as an effective method to pop it in the fridge for a few minutes if it’s naughty.Anyway when he gets it home the parrot sits quietly on it’s perch the first evening, gaining confidence the next day though it starts swearing at the old lady. The following day it’s hurling a constant tirade of abuse. Remembering the tip from the vet, the man places Percy on a shelf in the fridge.Within seconds the rude bird is silent. Then it starts begging to be let out. After a couple of minutes the man’s heart softens and he releases Percy who sits quietly on his perch shaking. After about an hour the parrot, still trembling, says I’m so very sorry I’ve been so naughty, I promise I’ll never swear or ever be rude again but I must ask – what did the chicken do ?