Marcus Today End Of Report
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- ASX 200 up 19 to 6135.
- High 6135.5 Low 6109.
- Banks steady but fell due to ex-dividends.
- Resources once again leading us higher.
- Metals and mining index at a 6-year high.
- Energy firm. Telcos weak.
- TLS slumps on earnings downgrade.
- AUD higher at 75.45c.
- Bitcoin slips to US$8391.
- AUD Gold $1320 unchanged.
- US futures up 105.
- Asian markets firmer with Japan up 0.61% and China up 0.27%. Malaysia has roller coaster up 0.43%.
FUTURES AND HIGHS AND LOWS
- MARCUS CALL – Some insight on the main events this week and 'how to outperform the market.'
- SMALL STOCK PORTFOLIO – No changes to the portfolio and JMS has announced Brian Gilberton has taken the helm following the CEO illness.
- INSIDERS – A look today at LYC again from one of our members. We also take a look at the WFD's coming vote decision and some words of wisdom from some industry CEOs.
- TRADING PORTFOLIO – No new trades - one stop loss raised, ANZ adjusted for the dividend. Some of the buy signals today.
- INSIDERS CONNECT WITH US - We invite you to send us your own stock ideas.
Movers and Shakers
- LYC -9.56% media reports on issues with LAMP in Malaysia.
- TWE -4.17% broker downgrade.
- AMP +3.22% Moody’s consider credit profile.
- TLS -5.00% profit downgrade. Reaffirms dividend.
- NWS -6.22% bad night in the US on results.
- GWA +5.65% sale of door business.
- ED1 +8.40% first day as a listed company.
- HSO +4.45% gets another bid from PE.
- LOV +3.65% broker upgrade.
- MLX -3.74% profit taking on lower copper prices.
- LNK -2.72% broker downgrades on budget changes.
- QAN +2.78% lower oil price.
- GNC +1.55% broker upgrade.
- CUV -3.33% regulatory update.
- SFH +57.89% sells businesses to NBL.
- BLA -3.25% director resignation.
- MXI -15.94% earnings downgrade.
- PNV+4.85% shining brightly.
- Speculative stock of the day: Titomic (TTT) +19.41% after signing a MoU with Italian shipbuilder Fincantieri Australia to evaluate the use of Titomic Kinetic Fusion in the shipbuilding process. First of its kind and another tick in the box for TTT.
- Biggest risers –ED1, EHL, GWA, ELD, MOE, and HSO.
- Biggest fallers – LYC, AJM, NWS, TLS, TPM and NWL.
- Elders (ELD) +3.7% NPAT up 8% to $41.4m. Underlying earnings before interest and tax (EBIT) of $45.7 million were driven by continued strong performance in the retail business and additional earnings through bolt-on acquisitions. The outlook is mixed due to weather conditions. “Continued momentum and growth is likely in the banking and livestock funding products, which will contribute to the Financial Services margin.” “Continued dry conditions will allow feedlot utilisation to remain at high levels, but will also increase feed costs at the Killara feedlot.”
- Telstra (TLS) -5.00% re-affirmed guidance consistent with its FY18 guidance. However, EBITDA is expected to be at the bottom end of the range and free cashflow is expected to be at the top end to moderately above. The challenging trading conditions in FY18 are expected to continue in FY19, including ongoing pressure on mobile and fixed ARPUs and the accelerating impact of the NBN. Telstra also reaffirmed it expects its FY18 total dividend to be 22 cents per share fully franked including ordinary and special, in accordance with its dividend policy announced in August 2017 and its capital management framework.
- Healthscope (HSO) +4.45% Has received a non-binding proposal from Brookfield at 250c cash. Two bidders now in contention though Brookfield is behind the 8 ball given Australian Super who are involved in the BGH bid has 14% of HSO.
- Commonwealth Bank of Australia (CBA) +0.38% chief financial officer Rob Jesudason has resigned "to pursue an external role in Hong Kong", the bank announced. Alan Docherty has been appointed acting CFO. Not a great look but the incoming CFO is very experienced with a career at CBA since 2003.
- Praemium (PPS) – 1.37% Current CEO, Michael Ohanessian has been reappointed to the board as managing director.
- GWA Group (GWA) +5.65% has sold off its Door & Access business to focus on greater performing areas of its overall business. The sale was for $107m all up and is expected to be completed after FY18’s end.
- AusNet Services (AST) -1.15% results – Outlook statement. AusNet Services expects continued growth in its regulated asset base of around 3.5% per annum to FY2021. In addition, net debt to regulated and contracted asset base is expected to remain below 70% to FY2021.
- Nextdc (NXT) +0.27% Update on legal proceedings with Asia Pacific Data Centre Group (APDC). NXT has offered APDC access to the properties involved in the dispute to enable an independent valuation. It concludes “NEXTDC is resolute in its view that APDC is not operated with sound governance practices and as such it remains appropriate that the vehicle be wound up. Accordingly, the Company continues to proceed with its proposal to wind up the APDC Trust and related court proceedings.”
- Seven Group Holdings (SVW) +1.88% The company has upgraded its FY18 guidance with EBIT now expected to be around 20% to 25% higher than the $376.9m last year.
BEST AND WORST
- Nothing significant today.
BOND MARKET UPDATE
ASIAN MARKETS NEWS
- Xerox calls off US$6.1bn sale to Fujifilm.
- Donald Trump has waded into a row over Chinese telecoms equipment maker ZTE, promising to get the firm “back into business fast” after it was hit by a ban on buying American hardware and software. The order followed US$1.2bn of fines against the company last year after it was found to have breached trade embargoes against Iran and North Korea.
EUROPE AND US MORNING HEADLINES
- Italy close to forming a government. So close.
- UK shoppers still not spending. A report shows 2% drop in retail sales in April, same as March. Spending in stores, as opposed to online declined 5.4%,the quickest pace in six years.
- 321 days to separation. Brexit that is. Still no clarity or plan really.
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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