Marcus Today End Of Day Report

By Henry Jennings | More Articles by Henry Jennings

 Today’s Headlines

  • ASX 200 up 11 to 6339.
  • High 6348 Low 6317.
  • ASX 200 up around 1% for the week.
  • Mixed end to a long week of results.
  • Banks firm but material stocks ease again.
  • TLS gathers pace.
  • AUD steady at 72.65c
  • Bitcoin steady to US$6439.
  • Aussie Gold firms slightly to $1617.
  • US futures up 26. Holds gains.
  • Asian markets mixed with Japan up 0.62% and China down 0.41%.

FUTURES AND HIGHS AND LOWS

MT STUFF

  • MARCUS CALL – The incestuous Super/Insurance industries. Telstra – resurrection or a moment in the sun?
  • TRADING IDEAS – No new trades. Three stop losses raised. CBA dividend strip working quite nicely. Have picked up the franking for free.
  • SMALL COMPANIES – A look at two additions to the portfolio following good results and big jackpots driving JIN result. One to watch.

POINTS

STOCK STUFF

  • ASL +19.38% completes entitlement offer. S&P credit watch positive.
  • UPD +4.52% despite concerns on privatisation.
  • ING +4.03% bounce continues.
  • NEA +4.18% broker comments.
  • TPM +4.73% telco rally continues.
  • GMG +5.27% hits record high on result.
  • KGN -3.69% volatility as Kogan questioned on selling intentions.
  • EHE -5.10% broker downgrades on results.
  • EVN -3.86% results disappoint.
  • IVC -3.65% broker downgrades.
  • ORG -2.20% Citi downgrades after results.
  • BAL -3.60% shorts back in control.
  • BRG -0.99% profit taking.
  • PLS +2.99% KDR +0.42% lithium firing again.
  • WBA +1.91% divestment of Bengerang and water rights for $132.7m.
  • Speculative stock of the day: KRL +40.45% after a takeover approach at 15c in cash by way of scheme of arrangement. Bidder PT Bayan Resources already holds 56% of the company. The board has recommended the offer in the absence of a superior proposal.
  • Biggest risers – ASL, SWM, LNK, HSN, GMG and TPM.
  • Biggest fallers – EHE, MGX, MAH, PTM, NGI and WGX.

RESULTS TODAY

TODAY

  • Goodman Group (GMG) +5.27% FY18 result. Net profit up 41% to $1.1bn, a final distribution of 14.25c was declared, up 8% on year. Operating profit in FY19 is expected to be $913m with operating EPS up 7% on FY18.
  • Link Administration (LNK) +6.32% FY18 result. Statutory net profit up 68% to $143m, revenue up 54% to $1.2bn and operating EBITDA 53% higher to $335m. A final dividend of 13.5c was declared taking the full-year payout to 20.5c, up 46% on year.
  • Evolution Mining (EVN) –3.86% FY18 result. Net profit up 21% to $263.4m, EBITDA up 11% to 795.1m and ASIC down 12% to $797 per ounce. Gold production down 5% to 801,187 ounces. Final dividend of 4c per share was declared. EVN is forecasting FY19 gold production of 720-770,000 ounces, cash costs are expected to be between $560-610 per ounce and group ASIC are expected to be around $850-900 per ounce. RBC consider the ‘boring’ result consistent with what conservative investors like to see, with an absence of surprises and thorough disclosure.
  • Jumbo Interactive (JIN) +17.40% Revenue up 22.7% to $39.775m. Profit after tax up 115% to $12.127m. Fully franked dividend of 11c making a total of 18.5c for the year. No outlook statement but this is the significant part of the announcement: “The number of large jackpots is a significant driver of sales. The sales trend over the last three financial year periods in the context of such jackpots in Australia.
  • Abacus Property (ABP) +2.19% FY18 results. Profit down 15% to $243.7m, FY19 distribution expected to be 2.8% higher than FY18 to 18.5c. Underlying EPS down 3% to 31.7c.
  • Kogan (KGN) –3.69% EBITDA doubles to $26.0m with NPAT of $14.1m up 110.4%. Strong balance sheet and fully franked dividend of 13c.

BEST AND WORST

ECONOMIC NEWS

  • Governor Philp Lowe faced a parliamentary enquiry this morning.He did talk about inflation especially a Fed tightening more quickly than anticipated as the US economy powers ahead. He said it is highly unusual to have interest rates at this low rate given the fiscal stimulus package underway.

Some highlights and focus from Governor Lowe in his opening address.

The Reserve Bank Board has devoted considerable attention to over recent times: the global outlook; household debt and the housing market; wages growth; and the outlook for inflation.

From the speech

  • Things are moving in the right direction. We are making progress towards full employment and having inflation return to around the midpoint of the target range, and further progress is expected.
  • The second point is that if we continue to make progress, you could expect the next move in interest rates to be up.
  • The third point is that because the progress that is being made is gradual, and is expected to remain so, there is not a strong case for a near-term adjustment in interest rates.
  • The Board’s view is that it is likely that we will hold steady for a while yet.

BOND PRICES

ASIAN MARKET NEWS

  • Malaysia GDP growth slows to 4.5% in Q2.
  • Google winds back China ambitions after staff rebel.
  • Chinese vaccine scandal is widening
  • WH Group, the world’s largest pork producer, said it had discovered cases of African swine flu among dozens of pigs culled at a factory in central China.

EUROPEAN AND US HEADLINES

  • US has warned that it may add a ‘nuclear element’ to the South China Sea. Pressure on China keeps on building.
  • Gold having a shocker. Strong USD to blame.

  • Moves started by authorities to strip Autostrade of road concessions after Italian bridge collapse.
  • Trump is using Turkey pastor row to rally the Christian voters in the US.

ANNOUNCEMENTS

MARKET MAP


Henry Jennings

About Henry Jennings

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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