ASX 200 flip flopped around closing down 13 points at 6781 (0.2%). Dow futures losing 35 points. Another day dominated by results and broker reports. Banks eased back despite soaring bond yields, the Big Bank Basket fell to $156.69 with CBA off 0.7% and WBC down 1.5%. Other financial did better with MQG up 3.4% on the Texas freeze and ‘Griddy’ windfall. QBE jumped 5.6% on broker upgrades. In healthcare, CSL continues to attract lacklustre broker commentary following results and closed down 2.4%. SHL off 2.9% and FPH down 4.1%. Miners were the stand outs, BHP up 3.3% and RIO up 3.6% as copper hits 10-year highs, Gold miners also finding support despite only modest bullion price rises. NCM up 0.5% and NST rallying 2.8%. Industrials generally were weaker across the board, COL down 1.9%, APT lost 1.8% after early gains, TCL falling 0.8% and TLS slipping 1.5%. Energy stocks fell as Brent fell, WPL down 1.3% and STO off 1.0%. Tech down slightly with the Index falling 1.1%. In corporate results, BSL rallied 2.3% after an early sell off, BIN down 2.2% as CEO says he will stay even after takeover, OML did very well after its number rising 14.5% with SYR up 11.3% as it will reopen its Balama project. BOQ in a trading halt, to acquire ME Bank for $1.33bn. Launches equity raising. OML up 12% on results. LLC fell 1.3% on lacklustre results but pipeline projects look strong. In economic news, the 10-year yield leapt to 1.60%. AUD form at 78.76c. Asian markets mixed with Japan up 0.8%% and China off 1.4%.

Today’s Highlights

  • ASX 200 down 13 at 6781.
  • High 6825 Low 6774.
  • Big Bank Basket dipped to $156.69
  • All Tech Index drifts 1.1%.
  • Dow Futures down 35 points.
  • Gold weaker at AUD$2266
  • 10-year yield rises again to 1.60%. Starting to get interesting.
  • AUD firm at 78.76c
  • Bitcoin hits fresh highs over the weekend at US$56199.
  • Asian markets mixed with Japan up 0.8%% and China off 1.4%.

STOCKS

  • LOV +16.39% feeling it from the broker upgrades.
  • SYR +11.30% restarting Balama.
  • WEB +8.92% CTD +8.29% Vaccine bounce.
  • APX -4.77% downtrend continues.
  • IOU -13.01% heading down to placement price.
  • IRI -11.28% investor conference call transcript.
  • AXE +50.00% electronic transmission in Qubits.
  • CXL +12.09% webinar announcement.
  • BD1 +16.61% back in winner’s circle.
  • CSL -2.42% brokers remain ho hum.
  • FCL +8.75% finally some positives.
  • OZL +7.00% copper explosion.
  • QBE +5.56% broker upgrades.
  • WGX +4.42% revenue jumps 32%.
  • SLC +6.12% major new contract with Symbion
  • Speculative Stock of the Day: Renascor (RNU) +33.33% Eco-friendly graphite purification technology. Strong volume day.
  • Biggest Winners: LOV, OML, ADN, CGC, TYR, SYR, MMM and DEG.
  • Biggest Losers: NVX, ERA, BET, BGL, APX, ANN and HMC.

TODAY

  • Bank of Queensland (BOQ) – Expects to announce 1H21 cash net profit growth of 8-10%. Net interest margin (NIM) is expected to be up ~3bps on 2H20. CET1 expected to be above 10.0% at the end of 1H21 vs target range of 9-9.5%, excluding the impacts of the capital raising. 1H21 dividend expected to be ~17cps inclusive of new shares issued through capital raise. FY Guidance: Above system growth in lending (no change). NIM slightly positive vs. prior guided 2-4bps decline. Cost growth of 3% to support the growth momentum of the business vs. prior cost growth of 2%. Divestment of St Andrew’s expected to be completed in 2H21. Dividend payout ratio target range of 60-75% of cash earnings for FY213. To acquire ME Bank for $1.325bn. Annualised synergy benefits of ~$70-$80m are expected by the end of year 3. Equity Raising: launches 1 for 3.34 entitlement offer to raise $1bn along with a $350m institutional placement. The offer price for the Placement and the Entitlement Offer will be $7.35 per share.
  • Reliance Worldwide Corp. (RWC) -2.54% First-half adjusted profit $99.3m vs consensus $95.7m. Revenue $642.4M in line with preliminary earnings of $642m and consensus. EBITDA $166.3m vs preliminary earnings of $164-167m and consensus $165m. Interim dividend 6.0c/share, 20% franked. January 2021 sales relative to the pcp have continued to show positive momentum with sales on a constant currency basis +14% higher than for same month last year but +24% higher on a daily sales basis despite there being 2 few trading days in month vs pcp, recorded positive sales growth in all regions during H1 of February. Inflation pressure on raw materials (zinc, steel and resins), freight and packaging may adversely impact 2H earnings. Adds share buybacks will be considered in future.
  • Bluescope Steel (BSL) +2.26% First-half underlying profit $332.8m vs year-ago $199.6m. Revenue $5.83bn vs year-ago $5.88bn and consensus $6.09bn. EBIT $530.6m vs preliminary ~$530m. Interim dividend $0.06, flat vs year ago. Expects second half underlying EBIT of $766m.
  • Chorus (CNU) -3.49% First-half profit NZ$24m vs year-ago NZ$31m. Revenue NZ$473m vs year-ago NZ$783m. EBITDA NZ$323m vs year-ago NZ$332m. Fibre connections increased by 62,000 to 813,000. Interim dividend of 10.5cps. FY Guidance (Jun 2021): EBITDA NZ$640-$660m (tracking towards the lower half) vs consensus NZ$649.9m. Capital expenditure guidance range increased to NZ$670-700m vs prior NZ$630-670m.
  • Lendlease Group (LLC) -1.35% First-half core operating profit $205m vs consensus $224.4m. Operating EBITDA $405m vs year-ago $525m. Interim distribution 15.0c/security. Highlighted progress on its strategy to realign exposure to the retirement sector. Outlook: Positioned to improve returns as operating conditions continue to recover. Construction backlog revenue for the core business is $14.5bn, $11.8bn of which is for external clients.
  • Bingo Industries (BIN) -2.19% First-half underlying profit $16.7m vs consensus $17.9m. Revenue $241.1m vs consensus $224.6m. Underlying EBITDA $65.2m vs consensus $63.7m. Interim dividend 1.50c/share, fully franked. Outlook: Expects a softening in its addressable market in FY21 as a result of COVID-19 related economic impacts, however the near-term outlook is better than previously anticipated. 2H FY21 to date has shown a continued improvement in pricing and if this trend continues to remain confident that it will achieve an EBITDA margin close to the bottom of this range.
  • Senex Energy (SXY) +7.58% First-half underlying profit $0.6m vs year-ago -$9.9m. Revenue $44.8m vs year-ago $13.2m. Adjusted EBITDA $24.6m vs year-ago -$1.3m. Natural gas production of 8.0PJ, +271% vs year ago. 0.5cps dividend and a special dividend of 0.5cps. FY Guidance (Jun 2021): Natural gas production guidance narrowed to 17-18PJ from 16.3-18.6 PJ. Capital expenditure guidance updated to $35-45m, from $30-40m. Free cash flow of $10-20m and Underlying EBITDA of $30-40m guidance remain unchanged, with the latter tracking to the top half.
  • 3P Learning (3PL) +1.64% First-half underlying profit -$0.8m vs year-ago -$1.9m. Revenue $24m vs year-ago $23.2m. Adjusted EBITDA $4.4m vs year-ago $3.5m. Management Comments: “We expect the momentum in the core business to continue and it could be enhanced by many enterprise opportunities in the sales pipeline.”
  • Costa Group Holdings (CGC) +12.97% Full-year profit $65.2m vs year-ago -$29.7m. Revenue $1.16bn vs consensus $1.13bn. EBITDA $152.8m vs consensus $163.6m. Final dividend 5.0cps. Outlook: Early season performance from its international segment has been positive, including strong pricing in China. Translation of International segment results are likely to be impacted by the recent strengthening in AUD.
  • Macquarie Group (MQG) +3.44% Now expects FY21 Group result of +5-10% vs year ago due to extreme winter weather conditions in North America. Previously FY21 was anticipated to be slightly down on FY20. Extreme winter weather conditions in North America have significantly increased short-term client demand for Macquarie’s capabilities in maintaining critical physical supply across the commodity complex and particularly in relation to gas and power. Macquarie’s Commodities and Global Markets (CGM) business physically ships gas on the majority of major pipelines across the US and over time has built capacity to support clients by delivering power and physical commodities to help them meet the unexpected needs of their customers.
  • Audinate Group (AD8) +8.34% First-half profit -$1.2m vs year-ago $0.3m. Revenue $15.4m vs consensus $15.1m. EBITDA $1.8m vs year-ago $1.9m and consensus -$0.8m. Outlook: Good trading conditions have continued into the beginning of 2H21, albeit expect Brooklyn revenue to continue to be impacted by the downturn in live events and live sound. Accelerated investing for growth, sees a target of headcount of >140 staff (inclusive of Cambridge) by the end of FY21 and a resulting increase in operating costs of between $2-$3m in H2.
  • amaysim Australia (AYS) – First-half profit $6.5m vs year-ago $4.0m. Revenue $227.9m vs year-ago $244.6m. Outlook: Following the sale of Mobile to Optus, the business’ main asset is a material cash balance (following costs associated with the transaction) and the company is currently subject to an unconditional off-market takeover offer from WAM Capital Limited.
  • MACA (MLD) +0.79% First-half profit $11.6m vs consensus $17.0m. Revenue $467.6m vs consensus $431.3m. EBITDA $58.4m vs $68m. Interim dividend 2.5cps (fully franked). FY Guidance: Revenue to exceed $1.05bn, which as at February 2021 is largely secured.
  • oOh!media (OML) +14.48% Full-year underlying profit -$8.0m vs consensus $18.8m. Revenue $426.5m vs guidance of $420-430m and consensus $427.3m. Underlying EBITDA $63.2m vs consensus $64.3m. Revenue has recovered strongly in key formats and for 1Q CY21 is currently pacing at 80% of the corresponding period in CY19. Road, Retail, Street Furniture and NZ revenue levels for January 2021 were at close to 100% of January 2019 revenue levels. As expected, Fly and Locate continue to be impacted by significantly reduced passenger numbers and CBD audiences. Capital expenditure for CY21 is expected to be lower than CY19 ($56m) with decisions aligned to revenue growth opportunities and concession renewals.
  • Ampol (ALD) -2.72% Full-year replacement cost of sales operating profit (preferred profit measure) $212m vs consensus $209.8m. Revenue $15.43bn vs consensus $18.30Bbn. Fully franked final dividend of 23cps. In addition to the $355m impairment recorded in the first half result, Ampol has recorded a further $59m impairment of assets with its end of year review of Convenience Retail sites asset carrying values. Outlook: Market conditions in early 2021 continue to be challenging, with headwinds including Australian dollar strength impacting F&I earnings and ongoing COVID-19 related travel restrictions impacting fuel volumes. On track to deliver $195m EBIT uplift by 2024, with 2021 expected to benefit from continued expansion of both Gull (New Zealand) and SeaOil (Philippines) networks, increased demand from international third party customers and continued focused execution of our Convenience Retail strategy.
  • NIB Holdings (NHF) +6.49% First half profit $66.2m vs year-ago $57.1m and consensus $75m.Profit number includes $7.0m non-cash impairment charge against nib Travel intangible assets due to covid-19. Revenue $1.25bn vs year-ago $1.23bn and consensus $1.26bn. Underlying operating result $86.9m vs consensus $80.3m. Interim dividend 10c, flat vs year ago.

ECONOMIC NEWS

  • Fitch affirms AAA rating- Outlook negative
  • Copper climbed more than 3% on Monday and is heading for an unprecedented eleventh monthly rise in February.
  • Goldman Sachs sees Brent oil at US$75 as supply an issue.

CV19 NEWS

  • US CV19 Deaths near 500,000.
  • Vaccine Tracker: 205 doses given in 92 countries. 6.44m a day. 63.1m in US 1.33m a day.

BOND MARKETS

ASIAN NEWS

  • Senior Chinese diplomat Wang Yi says US China relations were soured under the Trump administration. He said US/China must respect each other and not interfere in internal affairs. He urged the removal of tech tarriffs.
  • FTSE Russell will add 11 Star market stocks to Global Indices.
  • Japan has grounded Boeing 777s after engine failure in US.
  • HK weekend home sales jump to eight-year high.
  • Taiwan has warned its currency could head higher as exports of chips boom. Exports will likely rise 9.58% this year, compared with a previous estimate of 4.59%.

US AND EUROPEAN HEADLINES

  • US thirty-year mortgages are back to 3% as bond yields jump.
  • UK schools to reopen 8th March.
  • Texans are getting whacked with huge power bills after signing up to a service called ‘Griddy’ that makes us of wholesale prices. Great until the recent freeze. Governor Greg Abbott how working to sort out skyrocketing energy prices.

And finally….

A guy took his blonde girlfriend to her first football game. They had great seats right behind their team’s bench. After the game, he asked her how she liked the experience. “Oh, I really liked it,” she replied, “especially the tight pants and all the big muscles, but I just couldn’t understand why they were killing each other over 25 cents.” Dumbfounded, her date asked, “What do you mean?” “Well, they flipped a coin, one team got it, and then for the rest of the game, all they kept screaming was, ‘Get the quarterback! Get the quarterback!’ I’m like, hello? It’s only 25 cents!”

Clarence

XXX