The ASX200 is down 39 points in mid-morning trade after huge falls in commodity prices (oil -3%, Cu -4%) and more turmoil for emerging markets. Telcos up after TLS result ok. QBE also ok. Others not so ORG, TWE, IVC. Jobs later today. I am tired #ausbiz



  • Ex-dividend – Bell Financial Group (BFG) 2.8c, GUD Holdings (GUD) 28.0c, Navigator Global Investments (NGI) 12.1c, Plato Income Maximiser (PL8) 0.5c
  • Australian economic data – Westpac Leading Index, Employment Change, Unemployment Rate


  • Japanese data – Balance of Trade, Imports/Exports


  • UK data – Retail Sales
  • European data – Balance of Trade
  • US data – Housing Starts, Building Permits, Philadelphia Fed


  • Telstra Corporation (TLS) – Final dividend of 11 cents per share taking total dividend for FY18 to 22 cents per share; Added 342,000 domestic retail mobile customer services, 88,000 domestic retail fixed broadband customers, 135,000 Retail bundles and 229,000 wholesale mobile services; nbn connections grew by 770,000 to 1,946,000 for a total market share (excluding satellite) of 51 per cent; Sports Live Pass users increased by nearly 1 million to 2.3 million across AFL, NRL and Netball.



  • Sonic Healthcare (SHL) – FY2018 result in line with guidance – underlying EBITDA growth 6.4% (constant currency); Underlying EBITDA growth 8.3% to $962m (actual currency); Revenue growth 8.2% to $5.5bn; Net profit growth 11.2% to $476m; Earnings per share growth 9.9% to $1.12 cents; Final dividend up 6.5% to $0.49 per share (full-year dividend up 5.2% to A$0.81); Strong earnings growth in both Laboratory and Imaging divisions; Ongoing successful organic, acquisition and hospital laboratory joint venture growth strategies
  • InvoCare Limited (IVC)- Results below. Also announced the acquisition of Morrisons Funeral Directors in Auckland, New Zealand. Morrisons represents InvoCare’s ninth acquisition this calendar year with six transactions now announced or completed in Australia and three in New Zealand. Morrisons is a well-established, successful business performing circa 950 funerals, 720 cremations per annum and generating revenue of approximately NZ$5.2 million.



  • QBE Insurance Group (QBE) – Cash profit after tax up 3% to $385m, Adjusted net profit after tax down 18% to $380M3 (HY17 $464M5) reflecting a reduced level of positive prior accident year claims development and lower investment returns; Average Group-wide premium rate increase of 4.6%4,7 (HY17 1.0%4,7); Gross written premium up 1% to $7,887M (HY17 $7,590M4); Adjusted combined operating ratio of 95.8%2,3,4 (HY17 94.5%2,4,5); Attritional claims ratio (excluding Crop and LMI) improved to 51.3%3,4 (HY17 51.8%); Positive prior accident year claims development at $51M3,4 (HY17 $147M4,5); Adjusted commission and expense ratio broadly stable at 31.2%3,4 (1H17 31.3%); Annualised net investment return of 2.1% (HY17 3.6%); Debt to equity ratio reduced to 36.9% (FY17 40.8%); Indicative APRA PCA multiple strengthened to 1.74x (FY17 1.64x); Probability of adequacy of net outstanding claims broadly stable at 90.2% (FY17 90.0%); Interim dividend of 22 Australian cents per share (HY17 22 Australian cents); Including share buyback, total shareholder payout up 31% to A$397M (HY17 A$302M)


  • Treasury Wine Estates (TWE) – F18 EBITS3 up 17% to $530.2m; EBITS margin accretion to 21.8%, up 2.8ppts; NPAT up 34% to $360.3m; EPS growth to 49.7 cents per share, up 36%; Execution of transformational route-to-market change in the US in 4Q18; Depletions exceed shipments and forward days inventory cover in line with prior year, globally; Proactive exit of more than 2m 9Le cases of lower margin Commercial volume in F18, globally; Long-term investment in winemaking drives significant increase in Australian Luxury conversion from 2018 vintage; Simplify for Growth to deliver enhanced operational effectiveness and higher brand investment returns; F18 EBITS growth contributes to 4yr EBITS CAGR of 25%; TWE reiterates guidance for expected F19; EBITS growth of approximately 25%. Reiterated guidance for expected F19 EBITS growth of approximately 25%.
  • Origin Energy (ORG) Underlying EBITDA from continuing operations up 36% to $2.95bn, an increase of $774m, driven by improved performance in both the Energy Markets and Integrated Gas businesses. This delivered a $438 million increase in Underlying Profit to $838 million. Outlook. Origin expects underlying profit to be higher and further debt reduction in FY2019. It is expected Energy Markets Underlying EBITDA will be lower at $1.50-$1.60 billion. Without the impact of the changed treatment of certain electricity hedge premiums and decision to absorb the price increase in NSW, Underlying EBITDA would have been broadly in line with FY2018 at $1.74-1.84 billion. Australia Pacific LNG’s FY2019 production is expected to be 660-690 PJ.







US EQUITIES – S&P500 -22 (-0.76%), Dow Jones -138 (-0.54%), Nasdaq -97 (-1.23%).

Main themes

  • Concerns about emerging market economies continues with the Turkish lira down 5.5%. There were reports that Qatar pledged to invest $15bn in Turkey.
  • Energy weaker after oil fell on inventory data.
  • Macy’s (-15.95%) despite beating earnings expectations, with sales still weaker over th year.

EUROPEAN MARKETS – All significantly weaker. UK FTSE -1.49%, German DAX -1.58%, French CAC -1.82%


  • The US dollar was down slightly at 96.69
  • The Aussie dollar is little changed at 72.45.

BONDS – 2-yr: -2 bps to 2.61%, 5-yr: -5 bps to 2.72%, 10-yr: -5 bps to 2.85%, 30-yr: -4 bps to 3.02%.

The Italy bond yield rose to 3.161% amid concerns the 2019 budget will disregard EU deficit rules.


  • WTI crude futures closed down US$2.03 or 3% at US$65.08. EIA Stockpiles rose 6.8mb expectations were for a fall of 2.5mb).
  • Iron Ore – IRESS reports iron ore down US$1 at US$68.50 a tonne. The CommSec site says China Import (Fines 62% Fe) was down US45c at US$67.05/dry ton. (CFR Tianjin port)
  • LME metals – Big falls. Cu -4.02%, Ni -4.28%, Al -2.17%, Pb -7.09%, Zn -6.28%



US economic data – Retail Sales 0.5% (consensus 0.1%; prior 0.2% revised from 0.5%), Retail Sales ex-auto 0.6% (consensus 0.3%; prior 0.2%), Q2 Productivity – Preliminary 2.9% (m consensus 2.0%; prior 0.3%), Q2 Unit Labor Costs – Preliminary -0.9% (consensus 0.5%; prior 3.4%), and August Empire Manufacturing 25.6 (consensus 20.0; prior 22.6); July Industrial Production 0.1% (consensus 0.4%; prior 1.0%) and Capacity Utilization 78.1% (consensus 78.3%; prior 78.1%); June Business Inventories 0.1% (consensus 0.1%; prior 0.3%) and August NAHB Housing Market Index 67 (consensus 67; prior 68)

UK economic data – CPI 0.0% (expected -0.1%; last 0.0%) to be +2.5%yoy (as expected, last 2.4%). July core CPI +1.9%yoy (as expected, last 1.9%). Input PPI +0.5% (expected 0.1%; last 0.3%) and Output PPI 0.0% (expected 0.1%; last 0.3%). July House Price Index +3.0%yoy (expected 2.8%; last 3.5%)

Australian wages data – Wages growth was in line with expectations. That doesn’t mean it is good – with growth of 2.1% for the year. It just means no surprises!



“Any intelligent fool can make things bigger and more complex… It takes a touch of genius – and a lot of courage to move in the opposite direction.” – E F Schumacher, English economist born this day in 1911. Died 4 September 1977


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s