The ASX 200 is down 21 in mid-morning trade after weak leads. Utilities and Energy worst, Cons Disc best. HSO receives updated bid, BXB update, OSH Q, BGA AGM, AGL site tour, FLT rebounds. #ausbiz
- AGMs from Bega Cheese (BGA), Brambles (BXB with trading update), Nick Scali (NCK), McMillna Shakespeare (MMS), WorleyParsons (WOR). Q reports from Oil Search (OSH), Mirvac (MGR).
- US earnings – Allegheny Tech (ATI), Biogen (BIIB), Caterpillar (CAT), Harley-Davidson (HOG), Lockheed Martin (LMT), McDonald’s (MCD), PulteGroup (PHM), United Tech (UTX), Verizon (VZ). After The Close – Chubb (CB), Texas Instruments (TXN).
- FED Speak – Minneapolis Fed President (non-voter) Neel Kashkari, Atlanta Fed President (FOMC voter) Raphael Bostic, Chicago Fed President (alternate voter) Charles Evans
- Healthscope (HSO) – Has received another offer from the BGH – AustralianSuper Consortium at $2.36. The Board said it is assessing the position and shareholders don’t need to take any action at this stage.
- Brambles (BXB) – 1Q trading update. Sales revenue from continuing operations of US$1,420.6m for the first three months of the financial year ending 30 June 2019 (FY19), up 3% on pcp at actual FX rates and 6% at constant FX (US stronger). Group sales revenue growth of 6% is in line with Brambles’ stated objective of delivering annual mid-single digit revenue growth and reflects revenue momentum across all segments. Management noted, however, that “the business is, however, challenged by ongoing cost inflation across our major markets, including the US and Europe”. Overall, underlying profit in 1H 2018-19 is expected to be broadly in line with the prior corresponding period, on a constant-currency basis.”
- Oil Search (OSH) – Q production report. Total production in 3Q was 7.5mmboe, 39% higher than 2Q and close to the pre-earthquake level of 7.6mmboe produced in 4Q17. Higher global oil and gas prices led to average realised oil and condensate price of US$76.17 per barrel, up 5% on 2Q, and an average realised LNG and gas price of US$10.45/mmBtu, 18% higher than in the previous period. This, together with a rebound in production and sales volumes, drove an 81% increase in total revenue to US$474.9 million
- Commonwealth Bank (CBA) – Has sold its 80% interest in its Indonesian life insurance business, PT Commonwealth Life to FWD Group. CBA’s Indonesian bank, PT Bank Commonwealth, will enter into a 15-year life insurance distribution partnership with FWD. Sales price likely to be $426m, with potential additional payments subject to performance. PTBC will also continue to earn income on the distribution of life insurance products.
- Link Administration (LNK) – Investments in Property Exchange Australia Limited (PEXA). Subject to a PEXA IPO, LNK intends to sell 12.5m of the 26.5m shares it currently holds in PEXA. The remaining 14 million shares will be subject to voluntary escrow and are expected to represent 10% of the issued capital of PEXA. The value of proceeds will be dependent on the IPO price but expected to be in excess of $165m.
- AGL Energy (AGL) – Operational site tour for institutional investors and analysts at the AGL Loy Yang power station and adjacent coal mine in Victoria.
- Fisher & Paykel (FPH) – New CFO. Lyndal York
- OzMinerals (OZL) – West Musgrave Upgrade
SPI FUTURES -12
US EQUITIES – S&P500 -12 (-0.43%), Dow Jones -127 (-0.50%), Nasdaq +20 (+0.26%).
Main themes –
- Positive sentiment regarding China
- Tech sector outperforms.
- President Trump said his administration is working on a major middle-class tax cut to be introduced at the beginning of November.
EUROPEAN MARKETS – Mostly lower. STOXX500 -0.42%, UK FTSE -0.102%, German DAX -0.26%, French CAC -0.62%.
- The USD is stronger at 96.01.
- The Aussie dollar is a little weaker at US70.87c.
BONDS – 2-yr: +2 bps to 2.90%, 5-yr: +3 bps to 3.05%, 10-yr: +2 bps to 3.20%, 30-yr: +3 bps to 3.38%
- WTI crude futures closed down 5cat US$69.13. Saudi Arabia said it could increase production to 11mbpd (from 10.7mbpd currently) ahead of sanctions against Iran which are set to start on 4 November, while maximum capacity would be 11mbpd..
- Iron Ore – IRESS reports iron ore was up US$1.00 at US$73.50 a tonne. The CommSec site says China Import (Fines 62% Fe) was up $1.55 to US$75.00/dry ton. (CFR Tianjin port)
- LME metals – All Cu +1.02%, Ni +0.81%, Al -0.50%.
ECONOMIC DATA, NEWS & POLITICS
- Italian politics – The Italian government has kept to the EU, noting that plans for a 2019 deficit of 2.4% remain intact, but the government could take steps to reduce the deficit during the fiscal year. Prime Minister Giuseppe Conte reiterated Italy has no plans to exit the euro. Italian debt rallied in early trade, but the gains were largely surrendered by day’s end.
- US results. Hasbro (-3.1%) after missing top and bottom line estimates due to the bankruptcy of Toys “R” us. So far, 82% of S&P500 companies which have reported have met or exceeded earnings expectations.
QUOTE OF THE DAY
“If you think you’re too small to have an impact, try going to bed with a mosquito.” – Anita Roddick, English businesswoman and founder of The Body Shop, born this day in 1942. Died 10 September 2007.