MID MORNING MARKETS 19-03-19

The ASX 200 is flat in midday trade after mildly +ve leads. Materials best, Healthcare worst, banks mixed. WBC has abandoned planners, TPM reaffirmed guidance and WTC will raise $250m.  #ausbiz

m1m2m3TODAY

  • Ex-dividend – Apiam Animal Health (AHX) 0.8c, Austal (ASB) 3.0c, Brisbane Broncos (BBL) 1.0c, Blackwall (BWF) 2.0c, Carsales.com (CAR) 20.5c, Reece (REH) 6.0c, Thorney Opportunities (TOP) 0.7c
  • RBA Meeting Minutes
  • RBA Kent Speech– “Bonds and benchmark”
  • Economic data – House Price Index

TONIGHT

  • UK – Employment Change, Average Earnings incl. Bonus, Unemployment Rate
  • European data – Construction Output, Labour Cost Index, Wage Growth, ZEW Economic Sentiment Index

COMPANY NEWS

  • TPG Telecom (TPM) – Results. EBITDA $420n, NPAT $46.9m, EPS 5.1cps. Impairment charge of $227.4 (previously advised). Underlying EBITDA +2.76% to $424.3, underlying NPAY +3.5% to $225.2. Underlying EBITDA continued to be adversely affected by the loss of margin as DSL and home phone customers migrate to low margin NBN services, but TPM was again successful in offsetting these headwinds in 1H19. Reaffirm guidance for EBITDA of $800-820m and BAU capex to $180-220m.
  • Wisetech Global (WTC) – Trading halt and equity raising. $250m insto placement

Westpac (WBC) – Restructure of its wealth strategy. Realigning its major BT Financial Group (BTFG) businesses into the Consumer and Business divisions; Exiting the provision of personal financial advice by Westpac Group salaried financial advisers and authorised representatives; Moving to a referral model for financial advice by utilising a panel of advisers or adviser firms; Entering into a sale agreement as part of the exit with Viridian Advisory, which will see many BT Financial Advice ongoing advice customers offered an opportunity to transfer to Viridian. A number of the Group’s salaried financial advisers and support staff will transition to Viridian from the anticipated completion date of 30 June 2019. Some authorised representatives may also move to Viridian by 30 September 2019; Simplifying the Group’s structure and re-organising Group Executive responsibilities; Continuing to invest in the BT brand, reflecting its strength and market position, although BTFG will no longer be a standalone division; and Unlocking value by exiting a high cost, loss-making business. We expect the costs associated with exiting and restructuring will be offset by future cost savings. So EPS positive  in 2020. The one-off impacts from the transaction and implementation will be spread over FY19 and FY20. Initial estimates include one off costs of between $250-$300 million.

 


OVERNIGHT

m1

SPI FUTURES +20

US EQUITIES – S&P 500 +10 (+0.37%), Dow +65 (+0.25%), NASDAQ +26 (+0.34%)

Main themes

EUROPEAN MARKETS – Mostly higher. STOXX500 +0.27%, UK FTSE +0.98%, German DAX -0.25%, French CAC +0.14%.

CURRENCIES

  • The USD is little changed at 96.51
  • The Aussie dollar is stronger at US71.04.

BONDS – 2-yr: +1 bp to 2.45%, 3-yr: +1 bp to 2.40%, 5-yr: +1 bp to 2.41%, 10-yr: +1 bp to 2.60%, 30-yr: -1 bp to 3.01%

COMMODITIES

  • Oil – WTI futures were up US57c or 1% to US$59.09.
  • Iron Ore – IRESS reports that iron ores was up US50c to US$88.00. CommSec reports iron ore was up US$1.60 or 1.9% to U$87.80.
  • LME metals – Mixed. Copper +0.07%, nickel +0.66%, aluminium +1.39%

ECONOMIC DATA, NEWS & POLITICS

  • Reports (South China Morning Post) that meeting between President Trump and President Xi may be pushed back to June

 

  • Economic data – NAHB Housing Market Index (actual 62; Briefing.com consensus 63; prior 62)
  • Brexit – Speaker of the House of Commons John Bercow won’t allow a third vote on the Brexit deal unless the proposal is substantially different from the previous versions. This comes after Prime Minister May warned MPs that a failure to support her deal would lead her to seek a lengthy extension from the European Union.
  • Commerzbank and Deutsche Bank confirmed merger discussions
  • Italy – Foreign Minister Enzo Moavero Milanesi acknowledged that Italy is aware of security concerns associated with the country’s plan to participate in China’s Belt and Road Initiative.
  • European data – January trade surplus EUR1.50bn (expected deficit EUR8.00bn; last surplus EUR17.00bn)

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