Marcus Today End Of Day Report
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On the tapes…
- ASX 200 rises 40 points to 5713 as big banks lead.
- High 5723 Low 5670.
- Volume muted. Rotation from resources to banks.
- Banks lead charge, MQG cheers.
- Insurers rise. REITs better.
- Miners sour as commodity prices fall.
- Energy up. Gold miners ease.
- CSL motors ahead. Even TLS better.
- AUD steady at 80.55c.
- US Futures up 103 points.
- Asian markets better with China CSI up 0.03% and Japan up 1.41%.
MT STUFF: Good performance from BKL XD. TCL better and JHX rebounding.
Ex Dividends today
- BKL +2.65%
- CTX -0.93%
- DOW -0.75%
- ORA -0.96%
- QUB +0.40%
- RWC -unchanged
- RFG -4.53%
- SFR -4.81%
- SDF -0.38%
Movers and Shakers
- LYC +5.00% rare earth prices rising fast.
- GXY +6.76% lithium stocks back in vogue.
- ORE +4.16% lithium back in fashion.
- A2M +4.34% investor presentation.
- ALL +2.60% technical buying.
- STO +2.60% rally continues. Resistance at 400c.
- MGC +1.96% takeover speculation continues.
- WES +0.71% on coal prices.
- PLS +11.49% after investor presentation.
- SIQ +4.12% following update on acquisitions.
- NCM -3.04% after investor presentation.
- UPD -5.36% profit taking after placement.
- NCK -3.05% on slim volume.
- Speculative stocks of the day: PAR +38.60% confirmed the significance of its Pentosan Polysulphate Sodium to treat Bone Marrow Edema Lesions (BMEL).
- Biggest risers – PLS, GXY, LYC, AAC, A2M and API.
- Biggest fallers – FNP, SFR, RFG, OGC, MSB and HT1.
FUTURES AND HIGHS AND LOWS
- Tabcorp (TAH) +2.72% Tatts (TTS) +1.02% the merger is likely to go ahead. TAH affirms the latest deal to deliver A$130m EBITDA per year and $80m EBITDA spending synergies. Major shareholder, Australian Super indicated support for the merger.
- Navitas (NVT) +2.95% Expands agreement with Swansea University and shifts from a royalty-based model to a joint venture.
- Macquarie Group (MQG) +2.96% The company has announced a stronger performance due to fees in the first half now expected to be up on 1H17 and broadly in line with 2H17.
- Steadfast (SDF) -0.38% FY17 results. Underlying revenue up 7.2% to $504m. Underlying EBITDA up 10.6% to $143m. Underlying NPAT up 9.8% to $66m. EPS 8.9cps increased 9.6%. A fully franked dividend 4.4cThe results came on the back of premium price increases across its Australian SME portfolio and the addition of new brokers to its network. Outlook for FY18 – underlying EBITA $155m - $165m. And underlying NPAT $70m - $75m.
- Eden Innovations (EDE) -unchanged- the company has been approved by the West Virginian DOT for the use of its EdenCrete concrete product. The new EdenCrete is now approved in 9 US states.
- Origin Energy (ORG) +1.29% has struck a $250m deal to buy out Malaysian partner in a gas project off the south-east coast, simplifying the structure of the asset ahead of the sale of its oil and gas offshoot Lattice Energy and clearing the way for potential expansion of the venture.
- Nothing today
BEST AND WORST
BOND MARKET UPDATE
- Japanese machine orders grew at the fastest rate in 18 months in July, coming in higher than expectations. Core machine orders rose 8% month on month in July, according to the Economic and Social Research Institute, bouncing back from a 1.9% fall in June.
- China plans to ban trading of bitcoin and other virtual currencies on domestic exchanges, after the country banned initial coin offerings last week. China accounts for about 23% of bitcoin trades.
- China has moved to restrict coal imports in an effort to provide further support to its local industry.
- Tungsten prices have jumped 50% in the last two months, China is enforcing output quotas for the metal.
- Looks like it’s nearly mission accomplished for Chinese authorities trying to prevent capital flight and pushing the yuan back up from its slump.
- Chinese electric car maker, BYD jumped as much as 6% in Hong Kong on Monday after a senior official said Beijing is considering banning the production and sale of traditional fuel cars.
EUROPE AND US MORNING HEADLINES
- An Apple a day? Tuesday is crunch time for Apple as it announces its new suite of products. Apple plans to unveil three phones, including a premium model called iPhone X. Plus, we get to see the revised Apple Watch and a new Apple TV. Is there no end to its brilliance? Hard to believe that we have only had the iPhone for ten years.
- US residential installations of solar panels slipped 17% in second quarter and will herald its first annual decline. Developers added a total of almost 2.4 gigawatts in the second quarter, putting the industry on pace to reach 12.4 gigawatts this year.
- Lloyds of London is facing a potential GBP100m -GBP150m damages bill from Hurricane Harvey and more to come from Irma. But the insurance market place says don't panic the system can withstand the losses.
- The War on Drugs continues with big pharmas in the UK challenging the NHS on powers to limit drug costs to only GBP20m in any year. Previously they would have been automatically funded if approved by health costs agency, Nice. The new anti-cancer treatment from Novartis costs US$475,000. It is one of the world’s most expensive. Try getting that on the PBS.
Henry Jennings has been involved in financial markets for over 35 years as both a trader and a broker in London and Sydney.
Starting his career in London trading derivatives and moving to Australia in 1989, Henry eventually settled at Macquarie Group, rising to become a Divisional Director responsible for Equity Trading in Australia. For the last decade, Henry has been involved in private client broking and now writes exclusively for the renowned financial newsletter Marcus Today. Henry regularly appears on ABC TV and Sky Business as a market analyst, commentator and strategist and has presented at various conferences most recently for the AIA on the Gold Coast.
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