Marcus Today End Of Day Report
- ASX 200 closes flat 5842.
- High 5871 Low 5842.
- Narrow range. Thin volume.
- Banks weigh. AMP has a day to forget.
- Miners enjoy Chinese data.
- Energy stocks in demand.
- AUD rallies to 77.78c
- Bitcoin slips a little to US$8021.
- US futures up 126.
- Asian markets weaker with China CSI down 0.55% and Japan down -0.36%
FUTURES AND HIGHS AND LOWS
- MARCUS CALL – Marcus talks about where stock ideas come from and goes through the banks with the Royal Commission kicking off again yesterday.
- SMALL STOCK PORTFOLIO – Henry adds BYE an old favourite to the portfolio plus plenty of company announcements to keep up with today.
- INSIDERS – Nothing new from our crowd sourced ideas, but we look at the growing threat of cyber-crime, hacking and data protection. More importantly though, how to benefit from it.
- TRADING PORTFOLIO – No new trades. No stop losses raised.
- INVESTMENT FOR BEGINNERS – Marcus has been running the Marcus Today Education course for beginners. It is aimed at teaching basic concepts of finance but includes a section about “Your Super”, including: What is it; Where is it; How to manage it.
- 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.
Advancers and decliners
- APT +5.16% launch of 4-year senior notes.
- SAR +5.57% quarterly results.
- WEB +3.31% earnings guidance reaffirmed.
- SHV +3.64% conference presentation
- VRL -15.24% games hurt theme parks.
- AMP -4.41% Royal Commission hurting.
- AAD -2.12% VRL issues.
- NTC +17.65% Canadian fixed wireless contract.
- EGS -27.04% Riverina update.
- CRD +8.05% quarterly update.
- NOX +1.27% promising trial results.
- The speculative stock of the day: Empire Energy (EEG) +116.67% in a trading halt following news that the NT would lift the moratorium of fracking. Clearly a positive.
- Biggest risers – SAR up 5.6%, WEB up 3.3%, WHC up 3%, ALU up 2.9%, WTC up 2.8%.
- Biggest fallers – AMP dn 4.4%, PTM dn 3.4%, GXY dn 3.1%, CCP dn 3.1%, BAL dn 2.8%.
- Bank of Queensland (BOQ -2.38%) - First half results. 8% lift in net profit to $174m, cash earnings up 4% to $182m and an interim dividend of 38c announced. BOQ agrees to sell its life insurance business to Freedom Insurance for $65m. CEO said the bank was well placed despite the industry facing a number of headwinds.
- Fletcher Building (FBU) - In trading halt to undertake entitlement offer. The company is raising NZ$750m through the offer at NZ$480c per share. Proceeds are to go towards repaying existing debt. FUB said there is no change to estimated underlying EBIT of NZ$680-720m.
- Cimic Group (CIM +0.46%) – First quarter profits up 7% as revenue rises. Net profit of $172m in the three months to March and full year guidance reiterated, expected to be between $720m and $780m.
- Village Roadshow (VRL -15.24%) - Trading update this morning and the word 'challenging' used. Results now expected to be below previous guidance. Both cinema and theme parks are struggling with attendance numbers. Theme parks as the Commonwealth Games have robbed them of visitors. NPAT now to be a loss of between $10m and break even.
- Whitehaven (WHC +3.04%) - March quarterly report – ROM coal production of 5.9Mt up 4%. Saleable coal up 3% on pcp. An interim dividend of 13c. Maules Creek established new quarterly records for ROM and saleable coal of 2.9Mt and 2.7Mt respectively.
- Bravura Solutions (BVS +5.07%) - The company has signed a deal with the Commonwealth Superannuation Corp for the implementation of its managed cloud service, Sonate.
- Nextdc (NXT) - the company is raising $281m through a placement and SPP to fund three new data centre sites in Sydney, Melbourne and Perth. The floor price will be 643c, a 3% discount to the five-day VWAP. The company has also reaffirmed guidance with EBITDA in the range of $58m-$62m with revenue of $152m to $158m.
- Oil Search (OSH -1.95%) - First report following the PNG earthquake. Total production down 36% to 4.84m barrels of oil equivalent. The Central Processing facility recommenced in late March at an initial rate of 4,000b barrels a day. Revenue down 24% in the first quarter. Revised production guidance now of 23-26mmboe with costs in the range of US$10.50 - US$13.50 a barrel.
- ANZ Roy Morgan Consumer confidence rose 0.8% to 116.0 last week, ending a string of weekly declines. Though the headline increase was modest, the detail was more encouraging, with four in five subindices posting gains.
ALL ORDINARIES SECTOR SUMMARY
ALL ORDINARIES TOP MOVERS
ALL ORDINARIES BOTTOM MOVERS
ASX 200 SECTOR SUMMARY
ASX 200 TOP MOVERS
ASX 200 BOTTOM MOVERS
- Consumption and non-mining business investment had made significant contributions to growth. In contrast, there had been declines in mining and dwelling investment. GDP had not grown as solidly as domestic demand over 2017 because net exports had subtracted from growth.
- Household consumption had increased strongly in the December quarter and had been revised higher in preceding quarters.
- Growth in employment had remained strong in the first few months of 2018, although the monthly increases in employment had moderated. Nationwide, employment had continued to grow strongly in the household services sector, particularly in the health and social assistance industry.
- Housing prices had declined further in Sydney and Melbourne. Members noted that Sydney housing prices had declined by a little under 5 % since their peak in mid-2017.
- Members noted that most components of business investment had increased over 2017, with the exception of construction activity in the mining sector.
- Banks' loan performance and underlying profitability.
- Low risk-free interest rates continued to underpin the valuations of many assets around the world.
- Domestically, risks remained from the high level of household debt and the growth of riskier lending in earlier year.
- Members noted that the resilience of the Australian financial system had continued to improve. Australian banks' profits had increased in the latest half-year period.
- Members were briefed on the proposed revisions to the capital framework outlined in a consultation paper released by APRA in February 2018. The proposal would see changes in the capital required for different loans to make the capital requirement more sensitive to the risk of the loans, but would not raise the aggregate capital requirement for the industry.
- Output in the advanced economies was expected to continue to grow at above-trend rates, supported by accommodative monetary policy and, in the case of the United States, more expansionary fiscal policy.
- The low level of interest rates had supported growth over 2017, which had reduced the unemployment rate and brought inflation closer to the target.
- The stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.
Other macro news
- The Northern Territory has reversed its ban on fracking, opening up more than half of the region to onshore shale gas development in a move expected to provide more gas to the east coast.
- Rents reached a median of $582 per week in Sydney in March - still the highest in the country - but were up just 0.5% for the quarter and 1.7% over the past 12 months, according to CoreLogic.
BOND MARKET UPDATE
ASIAN MARKETS NEWS
- Gross domestic product increased 6.8% in the first quarter from a year earlier, matching the pace from the previous quarter as projected in a Bloomberg survey. Slight beat to some forecasts.
- Retail sales increased 10.1% in March from a year earlier, compared with a 9.7% forecast.
- Industrial production rose 6.0% last month, versus a projected 6.3%.
- Fixed-asset investment climbed 7.5% in the first three months.
- The urban monthly surveyed unemployment rate stood at 5.1% at end-March.
- Industrial production in Japan was flat on the month in February of 2018, compared to the preliminary figure of a 4.1% rise and following a downwardly revised 3.1% fall in the preceding month.
EUROPE AND US MORNING HEADLINES
- US and Britain issue warnings over Chinese telecom equipment maker ZTE, as they ratchet up national-security scrutiny amid broader economic tensions between Washington and Beijing.
- Pound touches the strongest level since Brexit ahead of EU-UK trade negotiations this week.
- Trump's personal lawyer forced to reveal in a New York federal court that Fox News personality Sean Hannity, one of Trump's most ardent defenders, was also on his client list.
- The UK has launched a "root and branch" review of its audit watchdog after corporate scandals raised questions about its ability to police how accountants check the books of companies.
- US accused Russia of blocking international inspectors from reaching the site of a suspected poison gas attack in Syria and said Russians or Syrians might have tampered with evidence on the ground.
Marcus Padley is the founder of the Marcus Today share market newsletter. Marcus is a stockbroker and has been advising institutional clients and a private client base for over 32 years.To gain further insights from Marcus Padley and his team of analysts, register for a free trial of the Marcus Today daily newsletter.