The ASX is down 40 points in mid morning trade, with Gold the only shiny sector (an oldie but a goodie). Big falls on Wall St overnight. Results from TPM and KMD and FNP back online after capital raising. #ausbiz



  • Ex-dividend – Brisbane Broncos (BBL) 0.8c, Blackwall (BWF) 1.9c, CI Resources (CII) 3.0c, Crown Resorts (CWN) 30.0c, K&S Corporation (KSC) 2.0c, Probiotec (PBP) 0.8c, Perpetual Equity Investment, Company (PIC) 3.0c
  • Economic data – House Price Index
  • RBA Meeting Minutes
  • RBA Assistant Governor Bullock Speaks at 3.15pm
  • Japanese data – Coincident Index Final and Leading Economic Index Final


  • European data – ZEW Economic Sentiment Index, Consumer Confidence Flash
  • UK – Inflation Rate, PPI and Retail Price Index
  • Economic data – ANZ weekly consumer confidence up 2.2%, largely reversing 2.5% fall the previous weak. Broad based improvement


  • Bank Royal Commission continues today – Yesterday we saw lots of talk about the sale of CBA credit card insurance products which it knew offered no advantage for customers (no chance of claiming benefits), and an admission from the banks that there was no process in place to verify customer expenditure. CBA back again today.
  • TPG Telecom (TPM) – 1H results. Underlying NPAT up 5% to $217.7m on revenue growth of 1%. Earnings bridge shows detractors included margin reduction, iiNet fixed voice falls, and increased electricity prices. This was more than offset by “other growth”. 2 cent dividend. Upgraded guidance


  • Kathmandu (KMD) – 1H NPAT up 23.0% to NZ$12.3m on revenue up 4.3%. Gross margins up 170bps. Same store sales down 0.8% (+2.7% on actual exchange rate but -0.8% on constant currency), made up of -1.9% in stores and +13.9% online. The fall was 6.3% in NZ while Aus sales were up 1.9%. Operating expenses up 5.1% with higher rents a major factor. 1 new store, 5 relocations and 3 major refurbs. Balance sheet – 13.8% fall in stock per store over the year. NZ4c dividend, fully franked for Aussie shareholders. ACQUISITION – KMD will acquire Oboz, a premium footwear brand. For US$60m and earn-out of up to US$15m. TRADING UPDATE – Sales for first six weeks of 2H are 7.9% above pcp on constant exchange rates, with sss up 7.0%. Margins +460bp or 4.6% above last year.


  • Sydney Airport (SYD) – Februay 2018 traffic statistics.


  • Trade Me Group (TME) – Document relating to the redemption of a small number of Restricted Shares in the Long-Term Incentive Share Scheme.
  • Mayne Pharma (MYX) – MYS’s Abbreviated New Drug Application (ANDA) for generic NuvaRing® has been accepted for filing by the US Food and Drug Administration (FDA). NuvaRing is an intra vaginal hormonal contraceptive delivery device combining etonogestrel and ethinyl estradiol over a 3-week period. Merck’s NuvaRing had total US sales of approximately US$830 million for the 12 months ending 31 January 2018, according to IQVIA.
  • Oil Search (OSH) – 2017 Climate Change resilience report.
  • ANZ – Looking at an IPO of its UDC Finance business. UDC is New Zealand’s leading asset finance company funding plant equipment, vehicles and machinery. Rationale is to simplify the bank and improve capital efficiency.


  • Seek (SEK $20.59) – Morgans has downgraded to a Reduce (from Hold) recommendation with a target price of $19.07 (from $21.07). The analyst is concerned about the Australian launch of Google For Jobs, saying that while Seek has the power to see off the threat from Google, there may be an initial drag on short term earnings and also a dip in market sentiment given the potential impact of a new player. While long term supporters, they see the short term risks as elevated.


  • Wesfarmers (WES $43.56) – UBS has a Neutral recommendation with a target price of $41.30. UBS believes the demerger is a positive for the grocery industry and Wesfarmers should become a higher-returning, higher-growth business.


  • Gateway Lifestyle Group (GTY $1.99) – Yesterday GTY announced the acquisition of residential land lease communities in South Australia for $45m. UBS has a Buy raised its target price by $2.30 and expects the acquisition to improve the overall asset quality and support a lower trading cap rate for the manufactured home estate assets. They also expect further asset recycling to pay down debt, which may offset the earnings benefit.


  • Newcrest Mining (NCM $19.75) – UBS has raised its target price to $14.70 from $13.90. The analyst believes the Golpu copper mine could reduce costs by around US$400/oz by 2028., and lower long-term gold revenue exposure by -15% to around 60%. The ratio of long-term gold to copper revenue will depend on several factors acquiring more of Golpu (above the current 50% stake) risks having too much copper in the portfolio and affecting the stock’s gold premium.





US EQUITIES – S&P500 -39 (-1.42%), Dow Jones -336 (-1.35%), Nasdaq -138 (-1.85%).

Main themes –

  • Tech sector is under pressure, led by Facebook -7.05%, after disclosing that Cambridge Analytica mined the data of some 50 million users without their permission.
  • The EU has published two lists of retaliatory US tariffs totalling €6.4bn – including a 3% tax on digital revenue, which was also negative for the tech sector.
  • Political concerns also an issue after Trump twitter tirade (from CNBC) over the weekend

EUROPEAN MARKETS – all significantly lower. STOXX -1.07%, UK FTSE -1.69%, German Dax -1.39%, French CAC -1.13%.


  • The US dollar was down 0.4% at 89.99.
  • The Aussie dollar fell to a low of US76.67 before recovering to US77.19c.

BONDS – 2-yr: UNCH at 2.29%, 5-yr: UNCH at 2.64%, 10-yr: UNCH at 2.84%, 30-yr: UNCH at 3.08%


  • WTI oil fell US28c to US$62.06. Middle East tensions are providing support. On Friday the weekly Baker Hughes rig count showed an increase of 4 oil rigs in the US to 800.
  • Gold futures were down 0.08% at $1311.30. As per yesterday’s reports, the expected interest rate rise by the Fed next week put pressure on prices but this was limited by continued political turmoil.
  • Iron ore was unchanged at US$73.00 on the measure I use from IRESS but other sources are reporting a fall of US$2.25 or 3.2% to US$67.35, with pressure coming from high inventories and a weak domestic steel market.
  • LME metals were mixed – copper -0.49%, nickel -1.06%, aluminium +0.14%.


  • No US data today
  • Uber’s self-driving car has killed a pedestrian in Arizona. Uber is halting self-driving car tests.
  • Reuters reported that ECB officials were shifting the focus from bond purchases to the expected path of interest rates, reviving bets that the ECB may raise rates sooner than previously thought.
  • Brexit – Britain and the EU have made progress in reaching a broad agreement on a post-Brexit transition period and the Irish border. Both the GPD and Euro are stronger against the US dollar.


“The key to making healthy decisions is to respect your future self. Honour him or her. Treat him or her like you would treat a friend or a loved one. A Stanford study showed that those who saw a photo of their future self made smarter financial decisions.” – A. J. Jacobs, American author born this day in 1968.


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