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Before making any investment decision, you should seek the relevant advice.
Market Opener – 05 Feb 2018
Local Markets Commentary
Caution is expected to feature across Australian market trade today, following drops across US markets and falls for key commodity prices overnight Friday.
Some key regional and domestic economic indicator reports are due today, however, commencing from 9.30 am AEDST.
In addition, this week the Reserve Bank of Australia(RBA) holds its first policy meeting for 2018, and some high-profile stocks report for full-year or interim results.
Locally today, AiG’s January services sector activity index are due pre-trade, as are CoreLogic’s weekly capital city home prices.
ANZ is expected to publish January job advertisements 11.30am AEDST, and the Melbourne Institute a monthly inflation gauge report.
Meanwhile, the RBA is preparing for its first policy meeting of the year tomorrow.December trade figures and retail sales will also bein hand before tomorrow afternoon’s outcomes statement.
Overseas Market Commentary
Major European and US equities markets were propelled lower overnight Friday, amid mixed influential data releases and earnings reports from high-profile stocks.
China – Caixin PMI services 12.45pm AEDST Today’s Stock Watch Westpac Banking Corporation (WBC)Chasing $A750M in a hybrid bond offer in support of tier 1capital.
10.1% common equity tier 1 (CET1) ratio as at 31 December,against 10.6% at the end of September.
Bonds will be $100 each, the margin to be determined via abookbuild, but expected at 3.20% - 3.40% above the 90-daybank bill rate.
December quarter capital, funding and asset quality presentationlodged this morning.
Wesfarmers Ltd (WES)Expecting to book a $306M Target pre-tax impairment in interim accounts.
A 13.8% higher, $33M Target EBIT is anticipated, however.Also anticipating a pre-tax £454M impairment in the group’s interim accounts in relation to the Home base acquisition and Home base book value.
In addition, £37M worth of stock write-downs and a £40M storeclosure provision are expected.Further, Bunnings UK and Ireland (BUKI) deferred tax assets willbe written down to the value of ~£53M.
A BUKI £97M underlying loss before interest and tax isanticipated, mostly attributed to Homebase.
BUKI MD Peter Davis is retiring from WES, after previously being with Bunnings for 25 years.
UK home improvement and DIY career specialist DamianMcGloughlin has been appointed to take over from Mr Davis.
Argo Investments (ARG)6.2% higher, $A110.5M interim NPAT. 4.0% higher $A118.94Mrevenue.
15.5c fully-franked interim dividend, up 0.5c. $8.06NTA.
15.9c (basic) EPS.SPP planned ‘in the near future’.
Speedcast International (SDA)$A107M - $A184M base network construction and management contract secured with NBN Co.Bubs Australia (BUB) / Woolworths Ltd (WOW)Confirming BUB goat milk infant formula will be stocked byselect WOW stores from April.
Fairfax Media (FXJ) / NZME Ltd (NZM)FXJ and FXJ New Zealand subsidiary Stuff are applying to appealthe New Zealand High Court decision in favour of the NZ Commerce Commission’s determination last year not to approve the proposed merger of Stuff and NZME.
Wellard Ltd (WLD)Live cattle exports from Brazil have reportedly been suspended.
Wellard expects to source cattle from its other supplier countries should an extended suspension be declared.
ResourcesTalga Resources (TLG)Non-binding MoU in place with Robert Bosch GmbH, mainlytargeting using graphene to synthesise macroscopic structures.
State One Stockbroking Limited – Market Opener Monday, 5 February 2018 Page 2 of 4 The $US gained, and US sovereign bonds were again sold off, forcing yields yet higher.
Meanwhile, a European Central Bank (ECB) policy setter surmised rates could be lowered by any new regional financial crisis.
Among new data releases, US January employment statistics included 0.3% average earnings growth for the month, against a 0.4% rise for December.
Year-on-year, earnings grew 2.9% for January,following 2.7% in December.Both December figures represented higher revisions from originally released figures, and put with January’s, bolstered views of potential inflation pressure.
200,000 new US jobs were created in January,against 160,000 for December, and the unemployment rate remained at 4.1%.
December factory orders were reported 1.7%higher, on par with December.
A final January University of Michigan consumer sentiment index came in at 95.7, from 94.4.
Caution is expected to feature across Australian market trade today, following drops across US markets and falls for key commodity prices overnight Friday.
Some key regional and domestic economic indicator reports are due today, however, commencing from 9.30 am AEDST.
In addition, this week the Reserve Bank of Australia(RBA) holds its first policy meeting for 2018, and some high-profile stocks report for full-year or interim results.
Locally today, AiG’s January services sector activity index are due pre-trade, as are CoreLogic’s weekly capital city home prices.
ANZ is expected to publish January job advertisements 11.30am AEDST, and the Melbourne Institute a monthly inflation gauge report.
Meanwhile, the RBA is preparing for its first policy meeting of the year tomorrow.December trade figures and retail sales will also bein hand before tomorrow afternoon’s outcomes statement.
Overseas Market Commentary
Major European and US equities markets were propelled lower overnight Friday, amid mixed influential data releases and earnings reports from high-profile stocks.
China – Caixin PMI services 12.45pm AEDST Today’s Stock Watch Westpac Banking Corporation (WBC)Chasing $A750M in a hybrid bond offer in support of tier 1capital.
10.1% common equity tier 1 (CET1) ratio as at 31 December,against 10.6% at the end of September.
Bonds will be $100 each, the margin to be determined via abookbuild, but expected at 3.20% - 3.40% above the 90-daybank bill rate.
December quarter capital, funding and asset quality presentationlodged this morning.
Wesfarmers Ltd (WES)Expecting to book a $306M Target pre-tax impairment in interim accounts.
A 13.8% higher, $33M Target EBIT is anticipated, however.Also anticipating a pre-tax £454M impairment in the group’s interim accounts in relation to the Home base acquisition and Home base book value.
In addition, £37M worth of stock write-downs and a £40M storeclosure provision are expected.Further, Bunnings UK and Ireland (BUKI) deferred tax assets willbe written down to the value of ~£53M.
A BUKI £97M underlying loss before interest and tax isanticipated, mostly attributed to Homebase.
BUKI MD Peter Davis is retiring from WES, after previously being with Bunnings for 25 years.
UK home improvement and DIY career specialist DamianMcGloughlin has been appointed to take over from Mr Davis.
Argo Investments (ARG)6.2% higher, $A110.5M interim NPAT. 4.0% higher $A118.94Mrevenue.
15.5c fully-franked interim dividend, up 0.5c. $8.06NTA.
15.9c (basic) EPS.SPP planned ‘in the near future’.
Speedcast International (SDA)$A107M - $A184M base network construction and management contract secured with NBN Co.Bubs Australia (BUB) / Woolworths Ltd (WOW)Confirming BUB goat milk infant formula will be stocked byselect WOW stores from April.
Fairfax Media (FXJ) / NZME Ltd (NZM)FXJ and FXJ New Zealand subsidiary Stuff are applying to appealthe New Zealand High Court decision in favour of the NZ Commerce Commission’s determination last year not to approve the proposed merger of Stuff and NZME.
Wellard Ltd (WLD)Live cattle exports from Brazil have reportedly been suspended.
Wellard expects to source cattle from its other supplier countries should an extended suspension be declared.
ResourcesTalga Resources (TLG)Non-binding MoU in place with Robert Bosch GmbH, mainlytargeting using graphene to synthesise macroscopic structures.
State One Stockbroking Limited – Market Opener Monday, 5 February 2018 Page 2 of 4 The $US gained, and US sovereign bonds were again sold off, forcing yields yet higher.
Meanwhile, a European Central Bank (ECB) policy setter surmised rates could be lowered by any new regional financial crisis.
Among new data releases, US January employment statistics included 0.3% average earnings growth for the month, against a 0.4% rise for December.
Year-on-year, earnings grew 2.9% for January,following 2.7% in December.Both December figures represented higher revisions from originally released figures, and put with January’s, bolstered views of potential inflation pressure.
200,000 new US jobs were created in January,against 160,000 for December, and the unemployment rate remained at 4.1%.
December factory orders were reported 1.7%higher, on par with December.
A final January University of Michigan consumer sentiment index came in at 95.7, from 94.4.