ASX 200 Up 4 to 7588
- HIGH 7609 LOW 7574 Narrow range. Results and Reactions.
Winners: SYA GNC YAL QBE CRN CBO ABB BET
Losers: RBL AQZ AGL PPK APX LFG HUB
- POSITIVE SECTORS: Consumer staples. Insurance.
- NEGATIVE SECTORS: Banks. Healthcare. Tech.
- BIG BANK BASKET: Down to $188.26
- ALL -TECH INDEX: Down 0.8% APT off 1.2%
- GOLD: Rallies to AUD $2380
- BITCOIN: US$45412. Pausing for breath.
- AUD: Firms to 73.63c. 10-YEAR YIELD: Weaker at 1.18%
- ASIAN MARKETS: Tokyo down 0.2% Hong Kong down 0.6%, China down 0.8%.
- US FUTURES: Dow futures down 2. NASDAQ down 14.
ASX 200 flat lined after a strong start finishing up 4 to 7588 another record close. Once again, we saw early gains ambushed by NSW cases. Canberra also going into a 7-day lockdown, not sure anyone will notice. It was all about results and reactions today. The first Super Thursday. CBA saw brokers ‘ho hum’ the results from yesterday and NAB released its Q3 trading update. We know already about the buyback. The sector has run extremely hard and was due to pause. The Big Bank Basket fell to $188.26. TLS reported better numbers and a share buyback. Good news and the market liked it pushing TLS up 3.7%. QBE surprised to the upside for a change rising 8.1% on rising insurance rates, AGL proved the rally was all hot air and fell 5.5% on results, GNC rose 11.7% after guiding higher and DOW rose 4.2% on results. Nothing on the economic front.
STOCKS ON THE MOVE
- GNC +11.70% upgrade to guidance.
- YAL +8.23% coal price strength.
- QBE +8.12% good surprise this time with results.
- CRN +7.92% coal prices.
- ABB +6.94% basking in recent update.
- BET +6.22% bounce continues
- RBL -7.89% something is up.
- AGL -5.53% results reveal pain.
- APX -4.87% board changes.
- PPK -5.19% white graphene production update.
- AQZ -5.68% lockdowns spread.
- POS +9.09% nickel bump.
- AXE +16.04% swinging higher.
- PIQ +11.00% Biotem manufactures Promarket D kits.
- BYE +18.18% stirring. ASX query brings out the Schultz response.
- SOR +26.98% bouncing back.
- EXP -6.69% CV19 casualty.
- CXO -6.10% profit taking.
- AMP up 3.2% on results. No dividend.
- DOW up 4.2% on results.
- GMG down 2.3% on results.
- XRO down 2.7% on cost comments at AGM.
- PPS +1.19% appoints its acting CEO as the new CEO. Formerly at ME Bank.
- MYR up 9.57% on guidance as they fend off Solly Lew.
- IPO of the Day: Canon Resources (CNR) +9.57% strong debut. Cobra Olive (CBO) +7.53%
- Speculative Stock of the Day: ADA +34.95% results bring bull’s roar. Profit triples to $7.7m. Decent volume.
- NextDC (NXT) -0.46% Acquires an additional 40,000sqm of adjoining land to their M3 site for $24m cash. M3 will provide data centre services to Enterprise and Government customers as well as hyperscale cloud providers in a new Availability Zone within the Melbourne market.
- Westpac (WBC) -0.04% There is speculation WBC is looking to divest its wealth management unit. One sub-unit is the BT Panorama platform, which is expected to be worth over $1bn or 17-19x EBIT. Mercer, AMP, KKR, Aware Super and AustralianSuper named as potential candidates.
- QBE Insurance Group (QBE) +8.12% First-half adjusted cash profit US$463m vs year-ago -$666m. Gross premiums written US$10.20bn vs consensus US$9.86bn. Combined operating ratio 93.3%. Interim dividend of 11c, franked at 10%.
- AMP (AMP) +3.24% First-half underlying profit $181m vs year-ago $115m.Revenue from continuing operations $1.71bn vs year-ago $1.80bn. No interim dividend. Dividend policy will be reviewed following the completion of the demerger in H1 FY22.
- Telstra Corp. (TLS) +3.66% Full-year underlying EBITDA $6.70bn vs guidance of $6.5-7.0bn. Announces $1.35bn on-market buyback. Revenue $23.13bn vs guidance of $22.6-23.2bn and consensus of $23.09bn. Capital expenditures $3.02bn vs guidance of $2.8-3.2bn. Final dividend 8.0c/share, includes an ordinary dividend of 5.0c/share and special dividend of 3.0c/share. In FY22 sees underlying EBITDA of $7.0-7bn.
- Xero (XRO) -2.71% Repeats outlook in AGM presentation. Total operating expenses (excluding acquisition integration costs) as a percentage of operating revenue for FY22 are expected to be in a range of 80-85% which is consistent with levels seen in H2 of FY21 and the pre-pandemic period. Integration costs, relating to the three acquisitions announced during FY21, are expected to increase total operating expenses as a percentage of operating revenue by up to 2% for FY22. The acquisition of Planday is expected to contribute three percentage points of additional operating revenue growth in FY22.
- National Australia Bank (NAB) +0.18% Q3 unaudited cash earnings up 10.3% to $1.70bn.CET1 ratio of 12.6%. NIM is broadly stable. At the end of July, total deferred loan balances associated with current lockdowns were less than $1bn.
- Praemium (PPS) +1.19% Appoints Anthony Wamsteker as CEO.Wamsteker has held the role of Executive Director and Interim CEO since May 2021.
- AGL Energy (AGL) -5.53% Full-year underlying profit down 34% to $537m vs consensus $531.3m. Revenue $10.94bn vs consensus $11.00bn. Adjusted EBITDA down 18% to $1.67bn vs guidance lower half of $1.59-1.85bn. Final dividend of 34c. The short-term outlook remains challenging as performance in FY22 continues to reflect the material falls in wholesale electricity prices that have occurred in recent years.
- Mirvac (MGR) -0.67% Full-year operating EPS 14c vs guidance of >13.7c and consensus of 13c. Operating EBIT $704m vs consensus $671.1m. Dividend of 5.1c. NTA $2.67 vs year-ago $2.54. Development pipeline ~$28bn. In FY22 sees EPS at least 15c and a dividend of 10.2c.
- Downer EDI (DOW) +4.15% Full-year underlying NPATA $261.2m vs consensus $230.8m. Revenue $12.23bn vs consensus $12.15bn. Underlying EBITA $467.3m vs consensus $481.7m. Final dividend 12c. Downer expects its core Urban Services to continue to grow in FY22 both in revenue and earnings.
- Goodman Group (GMG) -2.25% Full-year operating profit $1.22bn vs guidance $1.2bn.Distribution of 30c. In FY22 sees, operating EPS of 72.2 c (+10% on FY21. The group is well-positioned to maintain ‘work in progress’ of around $10bn throughout FY22, with multi-storey developments remaining a meaningful contributor. Forecast distribution for FY22 will remain at 30.0 cents per security.
- GrainCorp (GNC) +11.70% Upgrades FY21 underlying profit to $125-140m vs previously guided $80-105m.Post-harvest winter receivals and higher summer receivals, coupled with a favourable outlook for the upcoming winter crop, have supported strong export volumes, forward contracted sales and supply chain margins.
ECONOMIC NEWS/ BOND MARKETS
IN THE NEWS
- James Packer says that a shareholder cap is not necessary to address the dysfunction that has caused the king to lose its Crown. CWN concedes it may have to sub lease its melbourne casino to a rival operator.
- CBA’s Matt Comyn has backed the governor in his call for payment legislation to be extended to ensure global giants play by the rules. Good luck with that. They make their own rules.
- Canberra enters a lockdown. Sydney numbers continue to hold firm at 345.
- New Zealand laid out a plan for easing some of the world’s toughest border curbs, with the government aiming to speed up its vaccine rollout this year and begin a phased reopening of the border in early 2022.
- Vaccine Tracker: 4.56bn doses in 183 countries. That is another 2 countries added. Which ones? In Australia we had 200,802 doses on average with now 4 months to cover 75% of the population.
- The world’s third busiest port has been shut done with the terminal at Ningbo port closed after one worker infected.
- China is hitting back at Canadian PM Trudeau calling him arrogant and extremely unreasonable over efforts to block an extradition to the US.
- Chinese Authorities release five-year plan to strengthen rule of law. Regulatory crackdown will go for years.
- China Mobile, the world’s largest wireless carrier by subscribers, reported a 6% rise in profit for the first half of this year, boosted by new 5G users.
US AND EUROPEAN NEWS
- Chesapeake is buying Shale producer Vine in a US$2.2bn deal. It was only 6 months ago the company emerged from a CV19 induced bankruptcy.
- An obscure market indicator is flashing some warning signs. The gap between US money-supply growth and GDP is now below zero. It is an indicator known to eco-geeks as Marshallian K. Obscure it may be, but it has been right a number of times in warning of trouble at mill. The Marshallian K fell below zero in 2010, a year when the S&P 500 Index suffered a 16% correction. A similar dip in 2018 portended a selloff that almost killed that bull market.