A flat start for the ASX later Monday morning after Wall Street’s mixed session left trading on the futures market flat. The SPI futures closed down a point meaning a flat start to the week later this morning
Eurozone shares rose 0.2% on Friday and the US S&P 500 rose 0.6% to a new record high.
Despite that positive global lead local investors are far more wary, even though the Liberal party leadership brawl has been resolved with new Prime Minister Scott Morrison in charge along with a Treasurer in Josh Frydenberg.
The ASX 200 index may have closed up three points on Friday, but that still left it 91.9 points, or 1.5% lower over the week, at 6247.3.
Investors ignored a series of good results and positive news – such as the talks between TPG and Vodafone about an Australian merger.
Santos came back to life with a big takeover, a dividend, lower debt and OK profit and the shares jumped 11% to close Friday on $6.89. A2 Milk also produced a very good result and the shares jumped more than 10% to $10.79, despite a warning of higher costs in the coming year.
The major banks were the biggest weights on the index last week and will again come under pressure with the news on Friday night that criminal charges have been recommended against the NAB and CBA and others (including IOOF) have been severely criticised by the counsel assisting the Hayne Royal Commission.
Westpac shares were hammered, falling 8.5% to $27.66 after it reported on Friday that its net interest margin had fallen 11 basis points. NAB shares dropped 4.3%, CBA shares were down 4.6% and ANZ shares slid a nasty 5.6%. AMP shares dropped 1.1% after a new CEO was named.
Flight Centre shares slumped fell 15% to $57.90 after the media allegations of customer rip-offs and a culture of bullying inside the company. The fall happened despite a solid 14.5% lift in net profit to $264.2 million and a higher dividend.
TPG Telecom shares soared 29.4% to $7.73 on the news. Telstra shares also rose on the news, up 4.2% for the week to $3.21 while Vocus Group shares closed the week at $2.82, up 18.7%. The prospect of the TPG – Vodafone merger lessening competitive pressures in the mobile sector was enticing for investors.
Hutchison Telecommunications shares (it’s a partner in Vodafone) saw its rarely traded shares surge 87.5% to 10.5 cents (after falling 25% on Friday).
Tech darlings Wisetech Global, Altium, Afterpay, Iress and Carsales.com all reported last week and the shares surged as shorts were forced to cover their positions, resulting in big rises.
Wisetech Global closed the week up 26% at $20.00, Altium closed the week 27.5% at $27.47 while shares in Appen, which reports earnings tomorrow rose 23% to $13.73. Afterpay shares ended the week up 21% at $19.69 including a 6% plus rise on Friday.
BHP shares ended the week steady at $32.71 after a solid profit and record final dividend and the promise of more to come later this year. Rio Tinto shares eased 1.6%, while Fortescue metals shares fell more than 55 under $5 to close at $3.99.
Woolies produced a solid result, but some weaknesses, especially at Big W (and concerns about sales linked to the plastic bag debacle) and the shares lost 2.7% over the week to end at $28.80. Amcor shares rose 1.7% after its OK profit and CSL shares closed up 1.9%.
