- ASX 200 up 47 to 6300.
- High 6309 Low 6253.
- No time for Turkey. Risk on back.
- NEG passes party room.
- Results mostly disappoint.
- Banks and big miners bounce back as risks wane.
- Financials at a five-month high.
- AUD steady at 72.78c.
- Bitcoin hit again at US$5976.
- Aussie Gold slips to $1643.
- US futures up 60.
- Asian markets mixed as China down 0.56% and Japan up 1.63%.
FUTURES AND HIGHS AND LOWS
- MARCUS CALL – A check up on our current holdings and what to do in light of the Turkish turmoil.
- TRADING IDEAS – No new trades.
- SMALL COMPANIES – Nasty day for us in CVN yesterday with some ground being made back today. A look too at a couple of stocks suffering after the Monsanto court loss in the US.
Movers and Shakers
- ELD +2.04% and NUF +3.21% bounce back from glyphosate issues.
- WHC +1.33% record profit and special div.
- CVN +6.17% letter to shareholder soothes some nerves.
- JBH +5.77% broker upgrades.
- A2M +3.38% extends deal to China.
- NWS +2.89% positive broker calls.
- CGF -6.91% results at the lower end and soft guidance.
- DMP -6.52% Don Meij goes on a charm offensive. Miss due to hot weather.
- KGN -4.53% reverses rally from yesterday.
- BAL -3.05% becoming a substantial shareholder.
- KDR +3.51% SQM media release.
- RAP +6.06% bargain hunting.
- ORG +0.93% becoming a substantial shareholder.
- Biggest risers – APT, JBH, A2M, GWA, NUF.
- Biggest fallers – CGF, DMP, MFG, BAL, COH.
BEST AND WORST
- Challenger (CGF) –6.91% FY18 results. Normalised NPAT increased 6% to $406m underpinned by 16% growth in assets under management to $81m, and successful broadening of its product offerings. However, statutory NPAT was down 19% to $323m as it included investment experience. The full-year dividend grew 3% to 35.5c per unit, fully franked. FY19 normalised pre-tax return on equity is expected to lift from FY18 but not reach the 18% target; FY19 normalised net profit before tax is expected to be between 8%-12%, and the FY19 full franked dividend payout ratio is to be between 45%-50% of normalised NPAT.
- National Australia Bank (NAB) +1.50% Q3 trading update. Unaudited statutory net profit of $1.65bn and cash earnings growth fell 3% pcp due to higher investment spending and credit charges. Revenue was up 1% however expenses grew 2% after higher compliance costs. NAB also expect to recognise additional provisions in 2H FY18. The CET1 capital ratio is at 9.7%, down from 10.2% in March but NAB is confident they will meet APRA’s 10.5% ratio by January 2020.
- Domino’s Pizza (DMP) –6.52% FY18 result. Full-year NPAT increased by 15% to $136.2m and the fully franked full-year dividend grew by 15.5% to 107.8c driven by higher sales in all markets which grew 11.7% to $2.59bn. The company averaged almost 6 store openings a week in FY18. The outlook statement provided FY19 same-store sales guidance of between +3% to +6%; 225-247 organic new store openings; EBIT of between $227-$247m and net CAPEX to be between $60-$70m.
- Cochlear (COH) –3.03% FY18 results. Net profit up 10% YoY to $245.8m and Sales revenue rose by 9% to $1.35bn on new product launches and a focus on sales force expansion. Their implant business grew with units +8% (+11% excluding Chinese Tenders). Final dividend of $1.60 per share, up 14% supported by increased cash flow generation, full-year dividend is up 11%. Cochlear expects FY19 net profit to increase by 8-12% on stronger revenue growth in developed markets over emerging markets.
- Whitehaven Coal (WHC) -1.30% 43% rise in full-year underlying profit to $525.5 million, and confirmed that shareholders would be paid a 14¢ final dividend plus a 13¢ special dividend. Analysts had expected Whitehaven to report an underlying profit of $539.3m.
- Australia and New Zealand Banking Group (ANZ) +1.60% Trading update. 3Q18 Credit impairments charge down $85m on quarter, and provision charges at their lowest point since 2014 due to several one-off recoveries and a high level of write-backs in the institutional business. Impaired assets down $164m on quarter. The CET1 capital ratio at 11.07%, an increase of 3bps from March-18.
- Iselect (ISU) -0.60% Revenue down 2% to $181.4m. Net loss after tax of $13.5m. Balance sheet remains strong, with no debt and $33.0m cash at 30 June 2018. Company take on the outlook.
- ANZ Roy Morgan consumer confidence fell 0.6% to 118.2 last week, adding to the 0.8% decline from the previous week. Geopolitical tensions involving the US, China and Turkey impacted confidence despite upbeat RBA commentary and solid domestic conditions.
- NAB Business confidence index up 1 to 7 index points.
- Business conditions down 2 to plus 12 pts.
ASIAN MARKET NEWS
Chinese July activity data:
- The surveyed jobless rate in urban areas rose to 5.1% from 4.8% in June.
- Industrial output rose 6% in July from a year ago.
- Retail sales expanded 8.8% from a year earlier.
- Fixed-asset investment rose 5.5% year-on-year in the first seven months.
- Nio, a Chinese electric automaker backed by Tencent Holdings, has filed for an IPO of its American depositary shares.
EUROPEAN AND US HEADLINES
- Musk is now working with Silver Lake and Goldman to take Tesla private.
- Turkish lira steadies. Crypto turns to Crapto as Bitcoin sinks below US$6000. Now down 23% in August. The total market capitalisation of cryptocurrencies dropped to US$190bn, from a peak of around US$835bn in January.
- Saudi Arabia drops oil production in July.
- The future is coming faster than we think. Googles AI can detect eye disease more accurately than a doctor.
- UBS is trialling Netflix style algos for traders. Much like the suggestions we all have on the streaming service. Short DMP why not short this too. Scary.