The ASX200 is up 13 points in mid-morning trade after flat leads. Energy and Telco best. H’care down with CSL ex-div. Banks mostly ↑ materials mostly ↓. Class action for AMP, CBA and WOW. RC continues. #ausbiz



  • Royal Commission – Another round gets underway today, this time into the insurance sector.
  • Ex-dividend – Adairs (ADH) 8.0c, Brambles (BXB) 14.5c, CSL 127.8c, Clearview Wealth (CVW) 3.0c, Grange Resources (GRR) 1.0c, Inghams Group (ING) 11.6c, Motorcycle Holdings (MTO) 6.5c, News Corporation (NWS) 9.4c, New Zealand King Salmon Investments (NZK) 2.8c, PSC Insurance Group (PSI) 4.5c, Regis Healthcare (REG) 8.7c, Southern Cross Electrical Engineering (SXE) 3.0c, Thorney Opportunities (TOP) 0.9c, Wisetech Global (WTC) 1.7c
  • Economic data – NAB Business Confidence


  • UK – Employment Change, Unemployment Rate and Average Earnings incl. Bonus
  • European data – ZEW Economic Sentiment Index
  • US data – Wholesale Inventories


  • AMP and Commonwealth (CBA) – AMP and Colonial First State the subject of a class action on behalf of superannuation members. Claims of overcharging fees and uncompetitive returns on cash balances.
  • Fisher & Paykel (FPH) – filed a complaint with the US International Trade Commission (ITC), seeking an exclusion order to prevent the importation and sale of ResMed’s AirFit P10 range of nasal pillows masks in the US on the basis of patent breaches.
  • Macquarie Group (MQG) – CSLA Presentation in Hong Kong contains an update on short term trading update…which is in effect unchanged. “1H19 result is expected to be broadly in line with the 1H18 result, which included strong performance fees in MAM.”
  • A2Milk (A2M) – CSLA Investor Presentation. Expects sales revenues in the US and China to grow, although marketing and office costs will also increase.


  • Amcor (AMC) – CSLA Presentation in Hong Kong.



  • Resources – Deutsche Bank has reviewed the sector
    • BHP Billiton (BHP $31.20) – Deutsche Bank has downgraded to a hold (form Buy) recommendation with a target price of $34.50 (from $36.00). The downgrade comes after a solid performance, with the analyst thinking the easy gains have been made. They see further return of capital, which is positive, but not necessarily bullish for the sector.


  • Rio Tinto (RIO $70.95) – Deutsche Bank has a Hold recommendation with a target price of $78 (form $89). The analyst sees potential for off market buybacks but as for BHP, this is not a buy signal.


  • South32 (S32 $3.550 – Deutsche Bank has upgraded to a Buy (form Hold) recommendation with a target price of $4.10 (from $3.80). While the easy gains have been made and FY19 is likely to feature challenges from increasing costs and capital expenditure, arnings remains satisfactory.


  • CSL ($212.21) – Macquarie has an Outperform recommendation with a target price of $230.00 (from $223.500. The analyst thinks CSL is well-positioned to meet immunoglobulin demand based on the recent roll-out of the plasma collection centres. They also see solid growth of higher margin products such as Idelvion and Haegarda, as well as a favourable shift in mix.


  • Incitec Pivot (IPL $3.84) – Morgans has a Hold recommendation with a target price of $3.90 (from $3.45). The analyst was disappointed with the lower production guidance at Phosphate Hill which it believes has taken upside from higher fertiliser prices over FY18. FY19 and FY20 forecasts have been upgraded but this is dependent on an improvement in manufacturing performance, while the share price reflects the outlook.


  • National Australia Bank (NAB $27.69) – Is keeping rates on hold. Morgan Stanley has an Underweight recommendation with a target price of $26.40. The analyst thinks the decision suggests scrutiny of conduct and competition is having an impact on business decisions and hence profitability. Which will weigh on the share price. More broadly, the delay in re-pricing mortgages by the major banks suggests their pricing power is peaking. The analyst doesn’t think NAB’s move will drive a material pick up in new loans, given the amount of front book discounting, but it will reduce the risk of switching by existing customers.





US EQUITIES – S&P500 +5 (+0.19%), Dow Jones -59 (-0.23%), Nasdaq +22 (+0.27%).

Main themes

EUROPEAN MARKETS – All higher. STOXX500 +0.47%, UK FTSE +0.02%, German DAX +0.22%, French CAC +0.33%.


  • The US dollar was down 0.2% at 95.16.
  • The Aussie dollar is slightly higher at 71.15c.
  • Sterling rallied 0.9% amid press reports that a Brexit deal could possibly be struck within the next six to eight weeks

BONDS – 2-yr: +2 bp to 2.71%, 5-yr: UNCH at 2.82%, 10-yr: UNCH at 2.94%, 30-yr: -1 bp to 3.09%


  • WTI crude futures closed down US21c to US$67.54.
  • Iron Ore – IRESS reports iron ore was up US$1.50 at US$69.50 a tonne. The CommSec site says China Import (Fines 62% Fe) was down US30c at US$68.55/dry ton. (CFR Tianjin port) +0.9% to $66.62
  • LME metals – Mixed again. Cu -0.39%, Ni +0.45%, Al +1.21%.


  • US economic data – Consumer Credit $16.6B (consensus $14.5bnn Prior revised to $8.5bn from $10.2bn)
  • European data – September Sentix Investor Confidence 12.0 (expected 13.8; Prior 14.7)
  • Japanese data –  Q2 GDP growth revised up to 3.0% – strongest since 2016 – from 1.9% on capital spending activity
  • Chinese data yesterday –  Inflation of 0.7% was above expectations of 0.5%, to give a 2.3% invrease over the year.



“It’s bad taste to be wise all the time, like being at a perpetual funeral.” – D. H. Lawrence, English writer born this day in 1885. Died 2 March 1930.


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