The Bull

Wednesday 17

October, 2018 4:30 PM



CommSec Daily Report Wednesday

CommSec Daily Report Wednesday

Aussie shares are off to a better start, with the ASX 200 index up 0.4 per cent and helping to recoup most of Tuesday?s losses.

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16.05.2018 12:31 PM

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Aussie shares are off to a better start, with the ASX 200 index up 0.4 per cent and helping to recoup most of Tuesday’s losses. The fact that most sectors are edging higher and that none of the major banks are ex-dividend today (for the first time this week) is helping. Tensions in the Middle East, higher US interest rates and North Korea calling off talks with South Korea scheduled for today remain risks.

The telcos remain under pressure, mainly weighed down by Telstra (TLS) which warned of lower annual profits on Monday. TLS shares have slumped by ~10 per cent in just three days.

Mining stocks are mixed at lunch. BHP Billiton (BHP) and Rio Tinto (RIO) are both up while gold miners are down on a 2 per cent slide in the price of the precious metal overnight. Newcrest (NCM) and Evolution (EVN) are down as much 2.5 per cent.

A2 Milk (A2M) is plummeting by 14.8 per cent after disappointing investors with its sales forecasts. The dairy group expects revenue of between NZ$900-NZ$920m for the financial year. While this is between 63-67 per cent above the prior year’s result, it is still approximately $30-$50m below analyst expectations.

A2M’s slump is a weight on its peers. Bellamy’s (BAL) is down 10 per cent while Bubs (BUBS) is slipping by 2 per cent. Keep in mind that infant formula makers have been standouts in recent years. A2M is still worth six times more on the market today than two years ago. BAL back in 2015 started the year at $1.65 per share and finished the year at more than $13.

Automotive Holdings (AHG) – the country’s biggest owner of car dealerships – remains under pressure after warning of lower profits yesterday.

After seven straight days of losses, Myer (MYR) is now up by 4.5 per cent despite announcing a 2.7 per cent fall in sales to $635.3m in the past three months which it has blamed on the “…unseasonably warm start to winter…” This has weighed on winter clothing and shoes. The newly appointed British CEO will take the reins of the company on 4 June.

Coca-Cola Amatil (CCL) is up 0.75 per cent and is holding its AGM today. While its New Zealand and Fiji businesses are performing strongly, conditions have been more challenging in Indonesia and PNG.

On the economic front the latest Wage Price Index highlighted that wages growth remains subdued. Wages have edged higher by 0.5 per cent in the March quarter; a touch below market forecasts of 0.6 per cent.

1.4bn shares have changed hands so far today worth $2.6bn. 519 stocks are up, 513 down and 374 are flat.

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