Markets Live: ASX closes 22pts higher

That is all from us today. Thank you for your time and your comments. A reminder that subscribers are invited to participate in our Makings Sense of Earnings Season question and answer session at 12pm on Tuesday March 5. Details are available here.

Reporting season continues tomorrow with Ramsay Health Care, Pilbara Minerals, Ingham’s Group, Adelaide Brighton,and Atlas Arteria.

Good night.

The ASX/200 index added 22 points today.

The ASX/200 index added 22 points today.

The S&P/ASX 200 has closed 21.9 points higher at 6150.3 with volumes of 722 million, higher than average but normal for reporting season.

SEEK ended the day 8.3 per cent higher at $18.77 and Vocus Group climbed nearly 10 per cent to $3.86.

On the downside Reliance Worldwide dropped 6.6 per cent to $4.56 after founding chair Jonathan Munz decided to sell his remaining 10 per cent in a block trade at a 4 per cent discount. Mr Munz owned 100 per cent of the company until it floated and has gradually reduced his 30 per cent exposure. He will also retire from the chairmanship.

NextDC dropped 8.2 per cent to $6.50 and Afterpay Touch continued its fall with a 2.8 per cent decline to $17.64, it was at $20.50 on Monday.

Shares in Bubs Australian increased 5.3 per cent to 59.5 cents today, the highest price since October, after announcing a supply deal with Tatura Milk Industries that will allow it to convert fresh goat milk into a base used for infant formula in just one step.

The new process is claimed to create fresher product, improved taste and better solubility.

The baby formula maker, which owns its own goat herds, said on Wednesday that Bubs products will be produced at the Victorian Tatura facility – a wholly owned subsidiary of Bega Cheese. The Tatura dairy is an approved infant formula manufacturer and has its CNCA license (Certification and Accreditation Administration of the People’s Republic of China) needed to export goods to China.

Shares in Bubs Australian increased 5.3 per cent to 59.5 cents today, the highest price since October, after announcing a supply deal with Tatura Milk Industries that will allow it to convert fresh goat milk into a base used for infant formula in just one step.

The new process is claimed to create fresher product, improved taste and better solubility.

The baby formula maker, which owns its own goat herds, said on Wednesday that Bubs products will be produced at the Victorian Tatura facility – a wholly owned subsidiary of Bega Cheese. The Tatura dairy is an approved infant formula manufacturer and has its CNCA license (Certification and Accreditation Administration of the People’s Republic of China) needed to export goods to China.

As we head into the end of today’s session the S&P/ASX 200 is keeping higher with a 14.6 point gain to 6143.

Trading volumes are heavy in Telstra, Bingo Industries and South32. SEEK keeps rising and is now 9 per cent higher at $18.89.

Chief investment officer at Watermark’s $281 million Australian Leaders Fund, Justin Braitling, sent out a note to investors yesterday with a gloomy outlook for the market. He is «firmly in the bear camp» for the stock market and the fund’s exposure to equities has been very low for the past two years as corporate earnings in Australia have deteriorated since 2015.

«I cannot see shares making a new high any time soon; we could however see the market test new lows later this year or early next year,» he wrote. «Key sectors of the market are challenged — profits are unlikely to grow for the major banks in the medium term; this is also true for defensive sectors such as telecom and utilities». Australian Leaders Fund currently has a -1.3 per cent exposure to equities, meaning the amount of short positions just outweighs the long positions. It has held a similarly pessimistic position since early 2015.

Mr Braitling said that for global market to rally the world would have to return to synchronised growth, but this is unlikely because China’s economy is decelerating quickly «as credit to the shadow banking sector was removed last year».

«The lessons learned through the GFC have been front of mind as we have moved through the final phase of what has been one of the longest bull markets in modern history…While is may seem that [the Fund] has been stuck in a market neutral setting for some time, this is a function of the market backdrop and the risks that we see.»

Shares in SEEK are still up a whopping 7 per cent to $18.58, one of the biggest gains among the S&P/ASX 200 today (there are far greater gains among the all ordinaries).

This morning the it reported the classifieds site’s revenue for the six months to December 31 increased 21 per cent to $757.2 million compared to the same period in 2018 despite difficult economic conditions. Weakness in the Australian economy did not stop job listings website Seek from posting strong results on Wednesday, with chief executive Andrew Bassat expecting a federal election in May will bring greater stability for the business.

Earnings (before interest, tax, depreciation and amortisation) increased 6 per cent to $238.5 million, while net profit after tax fell 5 per cent to $99.3 million. When excluding factors such as additional investment spending on early-stage new business ventures, net profit increased 6 per cent to $123.8 million.

He said the business was «very solid and going strong» but the economy meant it was a «bit harder» than expected.

The Australia and New Zealand arm showed some of the strongest growth in the Seek group with an 11 per cent revenue jump and 13 per cent earnings growth. Revenue from Seek Asia increased 11 per cent with earnings up 10 per cent.

Read the full story from Jennifer Duke here

Shares in Ruralco are up 45.4 per cent today to $4.45 after it announced Nutrien, owner of Landmark, will buy out the company for $4.40 per share, a 44 per cent premium on Monday’s closing price of $3.06 (Ruralco did not trade yesterday). This gives the company an enterprise value of $615 million. The board expects to receive cash and pay a fully franked special dividend of 90 cents per share. The board has also decided to pay a fully franked interim dividend of 10 cents per share.

«The directors or Ruralco believe the scheme consideration, inclusive of the special dividend, represents compelling value for Ruralco shareholders and would create a robust rural services provider, with significant benefits for farmers, businesses and communities across regional and rural Australia».

Chairman Rick Lee said there is a «strong logic» in bringing together Ruralco and Nutrien’s subsidiary Landmark.

The deal is still subject to approval from the competition watchdog and the Foreign Investment Review Board. The biggest shareholders are Neal Edwards Pty Ltd (a company linked to former director John Edwards) and investment house Perpetual. Mr Edwards stands to make about $120 million from the sale and Perpetual will make about $69 million.

Next week myself and Stephen Bartholomeusz will be holding a online discussion about earnings season and answering questions. The event is for subscribers and more details can be found here.

Meanwhile, the S&P/ASX 200 remains higher at 6150 points boosted by a 14 point contribution from the financials sector. Communications is dragging (Telstra went ex-dividend today), and so is real estate.

ANZ Felicity Emmett has commented on the latest construction data:

«The construction sector has been a key support for the economy over the last few years, both in terms of growth and employment. While there is still a considerable amount of work in the pipeline for public engineering construction and residential construction, the weakness in second half of 2018 has been more marked than we expected, and if this points to an earlier and sharper turn in the cycle than we expected, it would suggest downside risks to our outlook.»

Источник: Theage.com.au

Источник: Corruptioner.life

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