Marcus Today End Of Day Report
VIEW MORE ARTICLES BY HENRY JENNINGS
- ASX 200 ekes out a 5-point gain to 6037.
- High 6039 Low 6012. Modest volume.
- End of an era for Lowy’s.
- Banks sold off again. Defensives save day.
- Resources mildly weaker. Energy stocks lose steam.
- Bond proxies and infrastructure firm.
- ALL comes up cherries.
- AUD slightly higher at 75.68c.
- Bitcoin falls again to US$7697.
- AUD Gold rallies to $1291.
- US futures down 59 after car import news.
- Asian markets weaker with Japan down 1.21% and China CSI 300 down 0.33%.
FUTURES AND HIGHS AND LOWS
- MARCUS CALL – Taking the top off. How we are dealing with the market 'rolling over the top'.
- SMALL STOCK PORTFOLIO – It's M&A time: A look at the MUA takeover which offers a very attractive return and why BWX is on our radar.
- INSIDERS – Plenty of emails from members on personal research and a brief look at an 'Insiders' stock, MWR up 46% since last week.
- TRADING PORTFOLIO – No new trades. We have been stopped out of two stocks. Two stop losses raised.
- INSIDERS CONNECT WITH US - We invite you to send us your own stock ideas. We also have the facility for you to email us any questions.
Movers and Shakers
- WFD -0.68% Unibail deal gets acceptance. End of an era.
- AAC +6.79% bull run.
- RWC - $945m capital raising and mopping up John Guest
- A2M +5.70% bargain hunting.
- APT +3.06% bulls are back.
- WTC +4.04% brokers continue to be impressed.
- TNE -5.92% broker downgrades.
- JHX -3.36% profit taking.
- MTS +7.69% broker upgrades and short squeeze.
- MSB -4.75% profit taking after run yesterday.
- WHA +6.99% optimism on China.
- CRD +9.29% low volume again.
- GXL -3.35% a dog.
- PDN +7.41% Uranium on the agenda.
- PNV +12.96% drawing broker coverage.
- PDL -3.49 % Ex-dividend.
- WBC -unchanged- victory with BBSW.
- Speculative stock of the day: No standouts today.
- Biggest risers – MTS, ALL, AAC, A2M, OCA and HSN.
- Biggest fallers – ASL, TNE, MND, GXL, MSB and HUB.
- MetLife Care (MEQ) – building a new retirement village in Auckland’s Southern community of Beachlands. The company bought 3 adjoining properties and plans to invest around $180m into the site to create over 210 independent living units.
- Auckland International Airport (AIA) –1.15% Monthly traffic data for April saw growth of 2.8% driven by an 8.3% increase in domestic passengers. International passenger growth declined by 1% as the Easter period started in mid-March as opposed to last year’s mid-April.
- Reliance Worldwide (RWC) – Trading halt and acquisition. RWC is in a trading halt pending the result of its institutional placement. The company has also acquired all outstanding John Guest shares for $1.22bn, representing a 12.4x multiple on FY17 EBITDA. RWC says the acquisition is inline with strategy of acquiring complementary products. The acquisition is expected to result in synergies of $20m EBITDA per year. The acquisition will be funded by a $1.1bn equity raising, including a $945m institutional component.
- Aristocrat Leisure (ALL) +8.02% 2H earnings. Revenue increased 28.5% pcp to $1.58bn, NPATA increased 12.7% pcp to $307.5m and the interim dividend increased 35.7% pcp from 14c to 19c fully franked. The result was driven by growth in the Americas and Digital businesses including the acquisition of Plarium and Big Fish. In the outlook statement, double-digit NPATA growth reaffirmed.
- Westfield (WFD) –0.68% The chairman address regarding the takeover by Unibail painted a picture of what the future combined business will look like and urged shareholders to accept the transaction. The new group will consist of 102 centres with a combined value of 62m Euros across 13 countries, with the largest development pipeline of any retail shopping centre, and the expectation of retaining the ‘A’ credit rating. WFD shareholders will end up with 28% of the stapled securities. Frank Lowe will retire as Chairman and Peter Lowe and John McFarlane, current Westfield directors, will sit on the Unibail board.
- Origin Energy (ORG) –0.51% has sold its digital metering business, Acumen, for $267m. Origin built the business from scratch 8 years ago and has entered into a contract with the buyer to continue development and deployment of the meters into the long-term.
- Cimic Group (CIM) +0.12% Has been awarded a $540m tunnel and infrastructure contract by Singapore’s Land Transport Authority.
- Westpac (WBC) - Court rules that WBC engaged in unconscionable conduct by attempting to rig the bank bill swap rate and breached the conditions of its financial services licence, but did not breach two other sections of the Corporations Act relating to market rigging.
- Collection House (CLH) –1.29% A subsidiary of the company has obtained its full Australian Credit Licence from ASIC and is now able to provide consumer loans.
BEST AND WORST
- Nothing significant today
ASIAN MARKETS NEWS
- Blue Orca, the research house formerly known as Glaucus, has another target in its sights in Samsonite. The stock tumbled in HK and was suspended. Blue Orca is questioning the accounting and corporate governance as the company has debt funded acquisitions to disguise slowing growth or so it says.
- Rusal said its chief executive and seven directors had resigned as the company may have issues repaying its debt.
- South Korea’s central bank kept interest rates on hold for a sixth consecutive month at 1.5%.
- Asian car maker stocks hit after Trump announced a national security review of US car imports. Expect EU manufacturers to follow suit.
EUROPE AND US MORNING HEADLINES
- In Canada, the government has blocked a Chinese takeover of Aecon on security concerns.
- In the UK, annual inflation slid to 2.4%, the Office for National Statistics said, against forecasts of economists who had expected it to stay at 2.5%
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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