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Monday 21

May, 2018 5:39 AM



CommSec Daily Report Monday

CommSec Daily Report Monday

Aussie shares are off to a firmer start, with the ASX 200 lifting by 0.5 per cent and sitting near three-month highs thanks to gains from some banks and miners.

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07.05.2018 01:15 PM

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Aussie shares are off to a firmer start, with the ASX 200 lifting by 0.5 per cent and sitting near three-month highs thanks to gains from some banks and miners. This marks the sixth time in seven sessions equities are lifting and adds to last week’s 1.83 per cent surge (the best weekly gain in more than a year).

Westpac (WBC) is up 1.5 per cent after a 6 per cent lift in 1H cash profit to $4.25bn came in ahead of market consensus. The result was partly driven by better than expected revenue, growth in lending, better margins and low Bad and Doubtful debts. WBC will pay eligible shareholders a 94c interim dividend. While the bank provided no specific guidance, it has flagged higher funding costs over the second half.

Macquarie (MQG) – which handed down a $2.55bn FY17 profit result last week – is up 1.8 per cent and has received a broker upgrade this morning. AMP is down slightly and has received a broker downgrade.

Keep in mind that Westpac (WBC), National Bank (NAB), ANZ Banking Group (ANZ) and Macquarie (MQG) will all trade exdividend from Monday – Thursday next week which could be a weight on the financials.

Most of the large miners are improving, with BHP Billiton (BHP) near four-month highs. Friday afternoon after market close there was some media speculation that oil giant BP could be considering buying some of the miner’s energy assets. South32 (S32) is lifting by 2 per cent and has been pushed higher on a 4.5 per cent surge in aluminium prices. S32 generates ~40 per cent of its earnings from the metal.

The price of oil has jumped by 1.9 per cent and has hit the best levels in three and a half years. This was partly on the possibility of new US sanctions against Iran (the world’s seventh largest oil exporter). Woodside (WPL) is up 0.8 per cent.

Orica (ORI) is slumping by 7 per cent after posting a 1H net loss of $229m. This compares to a $195m profit a year earlier. ORI – which sells explosives and chemicals to mining companies – recorded a 37 per cent slide in profit before significant items to $123.6m but does expect an improved second half.

Newcrest (NCM) said it started collecting tailings from its Cadia gold mining operations. Australia’s largest gold producer said it expects full production rates before the end of the financial year.

NAB’s Business Survey for April has improved. Conditions last month rose to a reading of +21 (up from +15) while confidence hit +10 (up from +8). Readings above 0.0 indicate optimism.

The focus this week will be on Tuesday night’s Federal Budget at 7.30pm AEST. Offshore, updates on inflation in the US and China will receive some attention.

1.4bn shares have changed hands so far on Monday, worth $2.3bn. 631 stocks are up, 453 are down and 385 are unchanged

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