The ASX200 is down 37 points in mid-morning trade after a disappointing US session. Telco +ve after TLS restructure. Disc and H’care the worst. HSO Asian path sale, AAD downdate, AMP up despite -ve broker moves. Lots on this week – local retail sales, BoJ, BoE and FOMC meetings, Chinese PMIs, Euro GDP, CPI and u/e, US jobs and ISM. #ausbiz


  • Japanese – Retail Sales


  • UK data – BoE Consumer Credit
  • European data – Business Confidence, Services Sentiment, Consumer Confidence Final, Economic Sentiment, Industrial Sentiment
  • US economic data – Pending Home Sales


  • Telstra (TLS) – New organisational structure driven by simplification of products. Product & Technology external appointment; Michael Ebeid (new – former boss of SBS) will run the Enterprise team servicing Australian and international business and government customers with market-leading solutions and services; Vicki Brady will continue to lead Consumer & Small Business designing digitally-led propositions for customers, managing customer relationships with superior sales and services capabilities, to acquire new customers and grow Telstra’s base; Nikos Katinakis (new) to lead Networks & IT focused on extending the company’s network superiority and enabling digital experiences with world-leading technology execution; Brendon Riley CEO of Telstra InfraCo which will efficiently leverage the InfraCo assets and drive growth in the Wholesale market, while creating future strategic optionality for these highly valuable assets; David Burns (currently with the Enterprise team) will lead Global Business Services (GBS) to bring together and radically simplify customer service operations and internal support services. GBS will drive a consistent approach to customer experience, efficiency and service levels. David’s appointment is effective today; Robyn Denholm will move to the role of Chief Financial Officer & Head of Strategy. She will support the CEO to drive the company’s overall strategy and deliver long term shareholder value growth; Alex Badenoch, Transformation & People will lead the T22 strategy transformation execution as well as drive the way the company works and operates, strengthening employee engagement. A Transformation Delivery Office has also been established to deliver an integrated and disciplined approach to implementation; Carmel Mulhern, Legal & Corporate Affairs will continue in her role engaging external stakeholders, including relationships with government and community. Carmel will also continue to hold the office of Group General Counsel and manage the internal provision of legal advice.
  • Healthscope (HSO) – Will sell its Asian Pathology operations in Singapore, Malaysia and Vietnam for $279m to TPG Capital Asia. Consists of 39 pathology laboratories across Singapore, Malaysia and Vietnam, operating under the Gribbles Pathology and Quest Laboratories brands. The net cash proceeds will be used to pay down debt and fund Healthscope’s expansion pipeline.
  • Ardent Leisure (AAD) – Update on results and performance. Revenue of $545-550 (from $585m), EBITDA -$50–$55. NPAT loss $84-94 (from loss of $63m.
    • Main Event – Revenue up18%. Includes a non-cash impairment charge of $38m associated with five underperforming locations; $5 million of preopening costs; and $7 million of other restructuring and non-recurring items. Reflects difficult trading conditions.
    • Theme Parks – Revenue expected at $67-70m (from $71m) still affected by October 2016 tragedy, discounted ticket pricing and adverse weather. Includes $75m Dreamworld revaluation decrement, $6m of Dreamworld incident costs (net of insurance recoveries), SkyPoint revaluation decrement of $4m and $1m of other asset impairments and non-cash losses. FY18 pro-forma corporate costs are expected to be $12m, down 26% from $16m in FY17
  • RCR Tomlinson (RCR) – Trading halt in relation to an announcement about its earnings.
  • Platinum (PTM) – Tim Trumper will join the Board as a Non-Executive Director,
  • Austal (ASB)- Government of the Republic of Trinidad and Tobago (GORTT) will purchase two Austal Cape Class Patrol Boats. The order is likely to be valued at circa AU$100m plus a multi-year ongoing maintenance and support package.
  • Caltex (CTX) – Refiner margins update.


  • Kogan (KGN) – 32,448,956 shares in voluntarily escrowed from 7 July 2016 by entities associated with Ruslan Kogan and David Shafer will be released from escrow on 20 August 2018


  • AMP ($3.30)- Update on its expected 2018 interim results and actions being taken to reset the business, prioritise customers and strengthen risk management systems and controls. 1H 18 underlying profit $490–500 million and 1H 18 result provision of A$290 million.
    • Citi has a Neutral recommendation with a target price of $3.50 (from $3.90). The analyst thinks the profit warning only addresses some of the issues and the risk of further disappointments remains.
    • Credit Suisse has an Outperform recommendation with a target price of $4.50 (from $4.80). The analyst notes that the update provides an element of clarity but there is still uncertainty regarding how much brand damage has been done and they are unsure if additional fee reductions are required. FY18 underlying profit estimates have bene reduced by 5.2%, outer years by -5%.
    • Macquarie has a Neutral recommendation with a target price of $3.90 (from $4.30) – The analyst had a $508m forecast. The analyst notes the rebasing of the business is a positive step, they see a risk of further rebasing, more one-off costs and reduced excess capital.
    • UBS has a Sell recommendation with a target price of $3.30. The analyst thinks this might just be the start of of the process (forecast had been $528m). While the fee reductions are the only recurring impact, they see debate on how various costs will be accounted for going forward.


  • BHP – Sale of onshore US Assets for US$10.8 billion, payable in cash.
    • Credit Suisse has a Neutral recommendation with a target price of $31.00. The analyst notes the form and timing of the return of proceeds is unknown. They think the deal unlocks many additional benefits but these are difficult to quantify, and allows management to focus on its core areas
    • UBS has a Buy recommendation with a target price of $37.00. The analyst notes the form of the returns as well as the timing will be determined at the completion of the transactions.





After a couple of quiet weeks it is full on for next week. Local retail sales, Bank of Japan meeting, Chinese PMI numbers, Bank of England meeting, European GDP inflation and unemployment, Fed meeting, US jobs numbers, and ISM





US EQUITIES – S&P500 -19 (-0.66%), Dow Jones -76 (-0.30%), Nasdaq -115 (-1.46%).

Main themes

  • US 2Q GDP in-line at 4.1%. Strong, but not too strong.
  • Technology underperforms – Amazon (+0.51%) losing earlier gains on strong earnings, Intel (-8.59%) lower amid concerns over its roll out of next-generation chips. Twitter (-20.54%) on news of a drop in active users.

EUROPEAN MARKETS – All stronger. STOXX 600 +0.40%, UK FTSE +0.50%, German DAX +0.40%, French CAC +0.57%.


  • The US dollar was lower at 94.67
  • The Aussie dollar is significantly weaker at 74.07

BONDS – 2-yr: -2 bps to 2.67%, 5-yr: – 1 bp to 2.85%, 10-yr: -2 bps to 2.96%, 30-yr: -1 bp to 3.09%


  • WTI crude futures fell US92c or 1.3% to US$68.69. The Baker Hughes rig count rose by 3. In other oil news, Russian energy minister Alexander Novak said the market remained volatile and responded to verbal interventions, adding that the market had priced in risks related to US sanctions against Iran.
  • Gold futures were down US$2.70 at $1,223.00.
  • Iron Ore – IRESS reports iron unchanged at US$67.50 a tonne. The CommSec site says China Import (Fines 62% Fe) was up US$1.90c or 2.9% at US$67.35/dry ton. (CFR Tianjin port)
  • LME metals – Mostly stronger. Cu +0.10%, Ni +0.62% and Al +0.19%.


  • US economic data – Q2 Advance GDP 4.1% (consensus 4.1%) and Q2 GDP Deflator 3.0% (consensus 2.1%); Final July Michigan Consumer Sentiment Index 97.9 (consensus 97.1)
  • US earnings – 50% of S&P 500 companies have reported earnings. Of those, 79.8% have reported better-than-expected earnings.
  • European data – German June Import Price Index +0.5% (expected 0.2%; last 1.6%) to be +4.8%yoy (expected 4.4%; last 3.2%), French June Consumer Spending +0.1% (expected 0.6%; last 1.0%). Preliminary Q2 GDP +0.2% (expected 0.3%; last 0.2%); Italian June PPI +0.3% month-over-month (last 0.7%); +2.9% year-over-year (last 2.4%); Spanish June Retail Sales +0.1% year-over-year (last -0.1%)


“If money is your hope for independence you will never have it. The only real security that a man will have in this world is a reserve of knowledge, experience, and ability.” – Henry Ford, American businessman born this day in 1863. Died 7 April 1947.


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