The ASX 200 fell hard again today though rallying into the match out falling 79 to 7197 (1.1%) with the banks seeing declines on news that authorities may clamp down on risky lending practices. So glad we had that RC. The Big Bank Basket fell to $182.42 (1%) with CBA off 1.3% and MQG falling 1.7%. MFG continued to fall, down 2.2% and PNI also in the sellers’ sights today down 9.1%. Big iron ore miners fell again too, BHP off 1.3%, BSL off 3.9% and RIO down 0.6% but FMG spared somewhat. Gold miners firmed with NCM up 1.9% and NST up 2.9%. Industrials slipped across the board, CSL continue to weigh, down another 2.6% with TLS down 0.8% and tech off led by APT down 4.2% and XRO down 1.8%. The All-Tech Index dropped 1.9%. Energy stocks saw some profit taking as crude prices drifted back, STO down 1.3% and WPL off 2.2%. Travel stocks feeling a little unloved as Vic case number surpass NSW numbers. QAN down 3.5% and WEB off 1.9%. In corporate news, APA extended the bid for AST until the takeover panel can rule on exclusivity whilst SIQ attracted a private equity bid at 1035c from TPG. Nothing on the economic front today but some signs in Asia that Evergrande may be restructured rather than bailed out. The stock rose around 9% in Asian trade. 10-year yields rising again to 1.49%. Fumio Kishida wins PM vote in Japan. More stimulus promised.
- Winners: SIQ, ADT, OMH, KED, SBM, RRL, SLR, STX, GRR
- Losers: PNI, SYR, CHN, TYR, JRV, MIN, ARF, NEA
- Positive sectors: Gold miners.
- Negative sectors: Most. Tech Banks Healthcare.
- Hi 7254 Lo 7146
- Big Bank Basket: Falls to $182.52 down 1%
- All-Tech index: Down 1.9% APT down 4.2%
- Gold: Unchanged at AUD2399.
- Bitcoin: Falls to US$42173.
- Aussie Dollar: Falls to 72.53c 10-YEAR YIELD: Higher again at 1.49%
- Asian Markets: Japan down 2.09% Fumio Kishida wins PM vote in Japan.
- Hong Kong up 0.38% China falls 1.35% ahead of holiday.
- US Futures: Dow futures up 163 NASDAQ futures up 84.
STOCKS ON THE MOVE
- SIQ +18.07% takeover bid at 1035c.
- KED +7.62% annual report. Less than 8000 shares traded.
- SBM +6.69% bottom fishing in golds.
- ECX +3.91% SIQ deal helping valuation.
- DGL +1.69% acquisition of Profill Ind.
- AGL +3.35% bargain hunting continues.
- KCN +14.33% Thai judgement due.
- COE +8.33% gas exposure.
- MX1 +6.25% US government baggage contract signed.
- LIS +3.43% kicks higher.
- GOR +1.69% Gruyere update.
- KNI +23.26% presenting at a conference
- VUL +1.00% acquisition of site for commercial plant.
- VMY +2.63% Mulga Rock project – early works.
- TCLR -22.02% leverage hurts.
- CTT -4.46% growth stock sell off.
- LYC -4.84% rare earths under a little pressure.
- MIN -5.60% iron ore and lithium falls.
- PPK -4.18% post LIS sell off continues.
- PEB -4.33% opens retail offer.
- QAN -3.48% FLT -1.39% WEB -1.87% all easing back after a positive run.
- IPO of the Day: Touch Ventures (TVL) +26.25% this is a private equity company that invests in post revenue and later stage venture capital opportunities.
- Speculative Stock of the Day: Two days in a row for RDT +11.11% kicking on from yesterday’s 100% plus gain. Mt Ida could be a new lithium province.
IN THE NEWS
- Goldman Sachs has raised its Brent crude oil target to US$90 a barrel.
- APA has extended the deadline to theor proposed takeover of AST under the takeover panel makes a ruling on the exclusive due diligence (DD).
- Smartgroup (SIQ) receives offer from TPG Global and Potentia Capital of 1035c. SIQ has granted due diligence and intends to unanimously recommend that Shareholders vote in favour of the Proposal. The offer reflects a 31% premium to its last closing price.
- Templeton Global Growth (TGG) have voted in favour of its proposed share-based merger with WAM Global (WGB) at a scheme meeting today.
- ORI – the company is set to take a $345m-$370m hit to its profit after tax after non-cash impairment charges of $260-$270m on its 50% shareholding in Yara Pilbara Nitrates and goodwill impairments wiping out a $70m gain on non-core land sales.
- CWN – Appoints RBL chairman to the board. Anne Ward will be a new independent non-executive director.
- Agnico Eagle Mines and Kirkland Lake Gold (KLA) -9% will merge to create a US$24bn Canadian gold mining company. Kirkland shareholders will receive 0.7935 of an Agnico Eagle share for each KLA, representing approximately a 1% premium to the 10-day volume weighted average prices on the Toronto Stock Exchange as at close of trading on September 24.
ECONOMIC NEWS/ BOND MARKETS
- APRA and other financial regulators have confirmed a move to clamp down on some higher risk lending strategies. Ultra-low interest rates, strong demand for housing and soaring prices are stretching more borrowers into higher debt-to-income brackets.
- Causes of Death numbers in 2020 have been released today. CV19 was the 38th leading cause at 898 deaths. Alcohol-induced death rates increased by 8.3%. Top five causes, Ischaemic heart disease, Dementia including Alzheimer’s disease, Cerebrovascular diseases, Lung cancer and Chronic lower respiratory diseases.
- For CV19 deaths, the median age at death was 86 years. Dementia was the most common pre-existing condition. Victoria accounted for 800 deaths.
- Engineering construction activity – Seasonally adjusted work done rose 3.2%.
- Victoria poised to cut Pfizer dose intervals in an effort to reach vaccination targets faster.
- CFMEU has four members test positive including President John Setka.
- Maldives leads the world with 97.8% of its population double dosed.
- Fitch has downgraded Nevergrande debt. Stock up around 9% today. Looks like a huge restructure is on the cards rather than a bail out.
- China injects more money into the system. Evergrande rallies nearly 10% on news of bank sell down. Evergrande is selling a ~US$1.5bn stake in regional bank Shengjing to help make debt payments. Evergrande is due to make a payment to lenders today. Another US$15.5bn pumped in today. Seasonal demand for cash also weighing ahead of a week-long national holiday.
- North Korea launches a hypersonic glider.
- Goldman Sachs says hidden local government debt is half of China’s GDP. The total debt of local government financing vehicles rose to about 53 trillion yuan (US$8.2 trillion) at the end of last year from 16 trillion yuan in 2013.
US AND EUROPEAN NEWS
- European markets expected to open slightly positive after losses yesterday.
- CATL is to acquire Millennial Lithium in Canada for US297m.
- A new study has found that ‘Hidden Debt’ on the Chinese Belt and Road is now around US$385bn.
- Amazon has launched ‘Astro’ a home patrolling robot. Hope it is better than Alexa which is absolutely hopeless. Google thing is so much better.
- UK is launching temporary lorry driver visas. UK had promised to ban petrol and diesel cars by 2030, but have now brought that forward to Friday.
And finally…thanks Rainer…
Had a meeting in a hotel but the phone signal was rubbish. I went to the foyer, they normally have reception there.
Walked into a business meeting the other week, put a kebab on the desk and said “we really have to think about strategy”. One of my colleagues asked “what’s with the kebab?” I said “salad and a little chilli sauce”.
One bone says to another, “how did we end up meeting in a joint like this?”
Told a joke over a zoom meeting and no one laughed. It wasn’t remotely funny.
This Yeast Club meeting is called to order. All rise.
The best way to arrange a family meeting is by turning off the wifi.
I went to a meeting of the National Traffic Warden Association last night. It was an all ticket event.