ASX hits 3-week low as US futures sink

ASX closes at three-week low, spurred on by a downturn in US futures.

37 min read

1:49PMFebruary 19, 2021.

Updated 5:23PMFebruary 19, 2021

Iron ore spiked, while Wall Street was weighed down by tech stocks and jobless claims. Picture: AAP

Welcome to the Trading Day blog for Friday, February 19. The S&P/ASX 200 sank this afternoon, falling as much as 1.7% before recovering to finish 1.3% lower. Tech stocks and jobless claims pulled Wall Street down. The Dow Jones Industrial Average fell 0.6%. The S&P 500 declined 0.4% and the Nasdaq Composite lost 0.7%, adding to losses after a volatile day for tech stocks. Locally, profit results are from QBE, Goodman, Cochlear and Inghams, among others.

Ben Wilmot5.08pm:Primewest eyes new fund

Property funds company Primewest Group has lifted its funds empire to close to $5bn and is flagging the launch of a new rural property fund.

The WA-based company lifted assets under management to $4.9bn in a busy first half and has another $165m of properties under contract.

The group lifted funds revenue by 9 per cent and had first half operating earnings per security of 2.1c per security, with it well-positioned for expansion as it has $26.5m worth of cash.

Chairman John Bond said the company had delivered on its strategy with consistent growth in assets under management following a period of high transaction activity.

The company expanded its institutional daily needs mandate to over $930m and launched Primewest Bespoke which currently manages $170m in assets.

Primewest recently completed a $60m institutional placement, with funds to be used to support cornerstone investments in two managed funds.

The first, the Primewest Property Income Fund is an open-ended investment trust available to retail investors. It has $61m in secured assets and is targeting to secure $150m in assets in the next 12 months.

In the second play, Primewest is expanding the mandate of its existing Primewest Agricultural Trust No. 1, and is chasing opportunities in the agricultural sector as it targets lifting the fund from $100m to $350m ahead of an eventual float.

The company confirmed its previously announced fiscal 2021 distribution guidance of 5c per security, noting it has traditionally delivered strong growth over the second half of the financial year.

4.39pm:ASX sinks to 3-week low

Australia’s sharemarket fell sharply to a three-week low as rising bond yields sparked some jitters globally.

But after falling as much as 1.7 per cent to 6769.9 points on light volume, the index finished down 1.3 per cent at 6793.8 as global markets pared intraday falls.

S&P 500 futures were down 0.2 per cent in late trading after falling 0.5pc intraday and regional markets also recovered substantially from sharp intraday falls.

The Energy sector was worst off with Woodside down 5.3pc WTI crude oil futures fell more than 2pc intraday amid reports that oil production was slowly resuming in Texas after an unprecedented shut-in due to cold weather.

The Health Care, Materials and Consumer Discretionary sectors also underperformed with CSL down 5pc on broker downgrades, Rio Tinto down 3.3pc on profit taking after its results and Domino’s down 2.9pc on profit taking.

But QBE up 3.1pc and Cochlear soard 8.4pc on strong earnings reports while Crown rose 5.3pc after Credit Suisse upgraded to Outperform.

Ben Wilmot 3.06pm:360 Capital fund snaps up stake in NZ’s PMG Property Funds Management

The 360 Capital REIT has bought a half interest in NZ-based PMG Property Funds Management, one of that country’s top real estate fund managers.

The NZ-based business has more than $NZ665m of real estate funds and will expand with the backing of the 360 Capital-run fund.

The $NZ17.5m equity partnership has been structured as cash of $NZ13.3m and a potential earn-out of $NZ4.2m over a period of two years based on key financial milestones.

The partnership gives the 360 Capital-run fund exposure to a growing funds management platform across NZ and access to on the ground management expertise to enable it to invest in direct commercial and industrial real estate transactions.

As part of the deal, the 360 Capital fund has committed to a $NZ10m underwriting position for the acquisition of a $NZ108.1m portfolio of NZ commercial and industrial assets for a PMG fund.

2.56pm:RBA spotlights ASX outage for review this half

The latest meeting of the RBA’s Payments System Board put the ASX’s operational issues from last year under the microscope and says an independent review of last year’s day-long outage is to be completed in the first half of the year.

Elsewhere the RBA noted transactions in the buy now, pay later market have been “growing strongly” and there is increased competition in the market associated with new entrants and different business models.

As part of the RBA’s Review of Retail Payments Regulation, it noted that the central bank is consulting with stakeholders on the issue of the no-surcharge rules that some BNPL providers impose on merchants. Existing credit card providers say this no surcharge rule on retailers gives the BNPL players a leg up.

2.53pm:Aquis Entertainment roaring higher

Aquis Entertainment is roaring higher again today, up 370pc at $0.54 after rising 610pc to a record high of $0.82 intraday.

The move takes the Casino Canberra owner’s market cap to around $100m.

The company was issued with an ASX speeding ticket yesterday after rocketing 210pc. It said it was not aware of any information concerning it that has not been announced to market.

Last July, Ben Wilmot wrote Tony Fung’s listed casino company Aquis Entertainment remains open to offers to buy the Casino Canberra in the wake of a deal to sell it to Sydney-based funds manager iProsperity Group collapsing in January.

The deal was unveiled in late 2018 with iProsperity’s Blue Whale entity, which was to become a major shareholder, but Aquis said that “sufficient information was not forthcoming” from the buyer and its associates during the ACT government’s probity process.

“While we are not actively seeking a sale of shares now, we remain open to consider all commercial approaches which are put to us, to ensure the best outcome for our employees, our business and our shareholders alike,” Aquis said at the time.

The company said then that its plan for a major redevelopment remained part of its longer-term strategy for growth in Canberra. Aquis has proposed an integrated entertainment precinct in Canberra’s CBD.

Patrick Commins 2.30pm:Retail recovery extends into new year

Australia’s COVID-19 boom in retail trade extended into the New Year, as turnover lifted in January despite Brisbane’s brief lockdown triggering a drop in spending in the state.

Retail spending climbed 0.6 per cent to $30.5bn, after dropping by 4.1 per cent in December, preliminary figures from the Australian Bureau of Statistics showed.

Turnover remains well above pre-pandemic levels, with year-on-year growth rising to 10.7 per cent, from 9.6 per cent in the prior month. Australians spent around $3bn more in January than they did 12 months earlier.

2.16pm:Key players in GameStop saga grilled

Robinhood Markets CEO Vlad Tenev offered an apology for the company’s decision to temporarily curb trading in some stocks, including GameStop Corp, on January 28 amid extraordinary volatility.

“Despite the unprecedented market conditions in January, at the end of the day, what happened is unacceptable to us,” Mr Tenev said after being questioned at a Congressional hearing.

His apology came after House Financial Services Committee Chairwoman Maxine Waters interrupted the Robinhood CEO during his opening remarks. Her request was unusual as witnesses are allowed to make opening statements before taking questions from lawmakers.

The Wall Street Journal, via Dow Jones Newswires

Photo by Chris DELMAS / AFP

1.40pm:ASX extends fall to 1.6pc; Oil plunges

The fall in Australian shares today is getting serious and it’s a bad sign for Wall Street.

The S&P/ASX 200 index fell 1.6pc to a 2-week low of 6774.2 - on track for its worst day in 3 weeks - as US futures fell 0.4-0.6pc.

It comes as WTI crude oil futures dive 2.8pc to $US58.80 a barrel as Texas oil production slowly restarts after about 40pc of production was shut in by the cold snap.

Often the Australian sharemarket is a better guide to Wall Street than the US futures in APAC trading.

With the “swing low” at 6802.4 breaking decisively intraday, the next chart level is the 50-day moving average at 6731.9, which should be out of reach today.

A break of that line could test Dec-Jan lows around 6585. Strong support should emerge at the January low at 6517.2 and the 100-day moving average, now at 6491.0

Falls to those points would equate to pullbacks of 5 or 6pc from the 12-month high close of 6917.3 this week.

Earnings and dividends are clearly stronger than expected this reporting season.

But has the sharemarket already built that in with its strong gains in recent months?

A big concern on the charts would be a potential “Broadening Top Pattern”.

On that basis, a break of the January low at 6517.2 could signal that a major top is in place.

The #ASX 200 continues to retreat along with Asian markets & weaker US futures. The index is now down 108pts or 1.56% to 6,778 #ausbiz pic.twitter.com/puKGSnXoAn
— CommSec (@CommSec) February 19, 2021

1.12pm:ASX falls 1.2pc as US futures sink

Australia’s sharemarket tumbled to a 5-day low as US futures sank.

The S&P/ASX 200 fell 1.2pc to 6801.7 as S&P 500 futures fell 0.4pc and Nasdaq futures fell 0.6pc.

Expectations of a further pullback from record highs on Wall Street are growing after the recent jump in bond yields and signs of “overheating” in the January retail sales and PPI data this week.

Some traders are betting that the NASDAQ will lead a US pullback.

They have bought SNAS.AU (EFTF Ultra Short NASDAQ 100 Hedge Fund ETF) with a tight stop-loss.

That ETF has bounced 5.8pc in the past three days.

S&P/ASX 200 last down 1.2pc at 6802.10.

Wayne Smith 1.01pm:Harvey Norman is major sponsor for Super Rugby AU season

Rugby Australia today announced retail giant Harvey Norman as its major sponsor of the Super Rugby AU season which opens tonight with the clash of traditional rivals Queensland and New South Wales at Suncorp Stadium.

Harvey Norman, which takes over from last year’s sponsor Vodafone, will also be the sponsor of the trans-Tasman competition which is scheduled to kick off in May.

Announcing the sponsorship in Brisbane, new Rugby Australia CEO Andy Marinos said the retail giant’s support of the competition was a further indicator that the game was on the rise.

“This partnership is another clear sign of the direction of Australian rugby and the exciting future for the game in this country,” Marinos said.

Eli Greenblat 12.45pm:Pandemic shapes Shaver Shop’s sales success

Not everyone grew their hair long in the pandemic. Instead, the removal of unwanted hair has ranked alongside home renovations and home offices as a lockdown favourite, driving record sales and profits for retail chain Shaver Shop.

The chain has been one of the big winners from COVID-19 lockdowns and restrictions, especially as many hair and beauty salons were closed or restricted, and has delivered a record-breaking set of accounts.

In the first half, orders for clippers, trimmers, curlers and epilators sent Shaver Shop’s online sales rocketing 102 per cent, helping the beauty retailer hit 24 months of consecutive like-for-like sales growth.

12.17pm:ASX on the defensive dropping -0.8pc

Australia’s sharemarket remained on the defensive at midday after hitting a four-day low.

The S&P/ASX 200 was down 0.8pc at 6826.7 as US futures wavered.

It comes after Wall Street endured its first three-day fall this year after the US 10-year bond yield hit a 12-month high.

The Energy, Materials, Consumer Discretionary, Health Care and Financials sectors were underperforming with Woodside down 3.2pc, Fortescue down 2.7pc, Domino’s down 3.8pc, Cochlear up 7.7pc after reporting and NAB and Westpac both down 1pc.

ANZ bucked the selloff in banks with a 0.8pc gain after Jefferies’ Brian Johnson upgraded to Hold, while GS and UBS boosted their target prices on the bank after a strong trading update yesterday.

Outperforming sectors included Tech, Staples, Real Estate, Communications and Utilities, with Afterpay up 5.6pc after Morgan Stanley raised its target price, Woolworths up 1.2pc, Goodman up 2.6pc after its results, Telstra up 0.5pc and APA Group up 0.5pc.

Robert Gottliebsen 11.54am:Investors flee city apartment turmoil

The slump in inner-city Melbourne apartment rents is sending shockwaves through the national apartment investor market.

Well-located Melbourne inner-city apartments that were renting for around $415 a week in 2019 are now on the market at around $300 a week --- a reduction of more than 25 per cent. Naturally as the news spreads, it is crunching the value of these apartments and making bankers around the country even more nervous in lending money to investors buying units.

But the special forces impacting the Melbourne apartment market are totally different to Sydney and other Australian capitals where rents, after a smaller fall, are now starting to rise again.

Indeed the land tax structure in Sydney, which was designed during the boom, could now create a severe apartment shortage, with spiralling rents, if students return.

Melbourne in the last decade became the fourth largest university city in the world and combined with abundant land and reasonable regulations an apartment building boom was created. The late starting projects in the boom are now reaching completion. Accordingly if Chinese students return they will enjoy abundant low-cost accommodation, in stark contrast to Sydney.

Picture: NCA NewsWire / Jenny Evans

11.45am:Retail sales below estimates

January retail sales rose less than expected.

Retail sales rose 0.6pc month-on-month according to a preliminary estimate from the ABS.

Bloomberg’s consensus estimate was a 2pc rise after a 4.1pc fall in December.

All states and territories rose, except for QLD, which fell 1.5pc, according to the ABS.

COVID-19 restrictions in Brisbane hit QLD, especially across Household goods retailing, Clothing, footwear and personal accessory retailing, and Department stores.

NSW led the rises, with a 1pc gain as Greater Sydney saw COVID-19 restrictions eased in January.

Food retailing led the rises, up 1.8pc after falling 1.7pc in December.

VIC and NSW led the rises in Supermarkets, after restrictions impacted Christmas celebrations in December 2020.

The rises were partially offset by falls in Clothing, footwear and personal accessory retailing, Household goods retailing, and Department stores, which were industries impacted by a three day lockdown in Brisbane.

Aust retail sales are way above their long term trend.Low interest rates, the recovering jobs mkt & the high saving rate will support consumer spending but retail sales are likely to gradually slide back towards trend as spending on services gradually returns to normal. #ausecon pic.twitter.com/utSWrSoriF
— Shane Oliver (@ShaneOliverAMP) February 19, 2021

11.37am:ASX -0.7pc at 4-day low

Australia’s sharemarket extended its intraday fall to a four-day low as US futures wavered

The S&P/ASX 200 index fell 0.7pc to 6835.5 as S&P 500 futures dipped 0.2pc.

Volume was about 77pc above average due to settlement activity after Thursday’s expiry of February options contracts.

David Ross 11.30am:Opal Tower’s Icon in liquidation

A company linked to the builder of Sydney’s troubled Opal Tower will be liquidated with creditors seeking as much as $36m for a series of buildings in the city plagued by faults.

The company, formerly named Icon Construction Australia (NSW) Pty Ltd, was placed in voluntary administration in November after slugging it out with homeowners in a series of defect ridden buildings the company built.

An administrator’s report by O’Brien Palmer was critical of directors of the failed unit, Nick Brown and Julian Doyle, for failing to provide information around insurance for the defect riddled Icon sites and dragging their feet on a proposed deed of company arrangement.

John Durie 11.19am:More profit for ASX 200 companies: AMP’s Oliver

With 60 per cent of ASX 200 companies having reported by number and 80 per cent by value, 57 per cent of companies reported profit increases against 36 per cent in the August reporting season.

Figures supplied by AMP’s Shane Oliver show 53 per cent reported positive surprises against 32 per cent in August.

Oliver said 53 per cent increased dividends against 27 per cent in August.

The ASX 200 is up 3.5 per cent this month and 3.8 per cent for the year which compares with the US S&P 500 index up 3.2 per cent in $A terms.

11.18am:Cochlear results impress; shares +8%

Cochlear’s interim results and guidance comprehensively beat market expectations sending its share price up 8.1pc to a 2.5-month high of $221.31

Underlying 1H21 NPAT of $125.3m was 40pc above and FY21 underlying NPAT guidance was 14pc above consensus at the midpoint.

“On balance, a better than expected earnings result, supported by SG&A (cost) leverage,” says Macquarie’s David Bailey.

“Further, we note favourable exit rates heading into 2H21, notwithstanding more recent COVID-19 impacts.

More generally, our positive investment view is underpinned by scope for above-industry CI (Cochlear implant) unit sales growth over the forecast period, with market share gains complementing a resumption of surgical procedures.”

Macquarie has an Outperform rating and $241 target price.

Cochlear last up 7.8pc at $220.37.

James Madden 11.13am:News Corp’s Miller: Need for open exchange of news, views, opinions

News Corp Australasia executive chairman Michael Miller has told a Senate inquiry into media diversity that the hearing itself “is evidence of our nation’s embrace of free speech.”

“It is simply a fact that we are living in the most diverse news media marketplace in Australian history and to deny that is to turn a blind eye to the modern world,” Mr Miller said.

“Surely this committee doesn’t believe real news media needs more controls, more regulation, and more constraint.

“Democracy is messy; it’s a work in progress that relies on the robust and open exchange of news, views and opinions and a recognition that all people have a right to hear a range of views.

“On any given day you will hear people on the ABC highly critical of the views of people on News Corp platforms and those people will be firing back.

“This is not democracy failing, this is democracy working. “

Eli Greenblat 11.06am:Treasury Wine head of Europe Michelle Brampton resigns

Treasury Wine Estates head of Europe, Michelle Brampton, has resigned from the winemaker after 19 years with the group, with her departure following a planned restructure of the company’s operations.

A spokeswoman for Treasury Wine said Ms Brampton, managing director Europe, Middle East and Africa, has decided to leave Treasury Wine at the end of this fiscal year.

“Michelle joined the business in 2002 and during her 19 years with the company has built an impressive career taking up roles across different disciplines, including nearly three years as Managing Director of the EMEA region. Michelle is recognised as a passionate voice and advocate within the wine industry and Treasury Wine has been fortunate to have her as a member of the team.”

This week chief executive Tim Ford announced a split of Treasury Wine’s operations into three divisions, around the Americas, Treasury Premium Brands and Penfolds. Ms Brampton was not appointed to run either of these divisions

Perry Williams 10.58am:Transurban, Macquarie land $US3-4bn US toll road contract

Transurban and Macquarie have landed a $US3-4bn ($3.9-5.1bn) contract to deliver a new US toll road in Washington after beating two rival consortiums to the deal.

The Accelerate Maryland Partners consortium, 60 per cent owned by Transurban and 40 per cent by Macquarie, will deliver the American Legion Bridge I-270 to I-70 Relief Plan connecting northern Virginia with Maryland.

Express lanes will be added from the George Washington Memorial Parkway in Virginia, across and including the American Legion Bridge and on the I-270 to the I-70 in Maryland.

The cost is $US3-4bn with the overall Maryland Express Lanes project expected to cost over $US9 billion.

“Our business has commenced its next phase of growth in North America with three projects in delivery or development in Virginia, this our first project in Maryland, and the recent introduction of strategically aligned partners which are committed to growing alongside Transurban in the region,” Transurban chief executive Scot Charlton said.

Transurban lost out on a deal to buy Macquarie’s Elizabeth River Tunnels toll road in the US state of Virginia in November after being pipped by Spanish rival Abertis.

It sold a 50 per cent stake in its US highways for $2.8bn to Australian and Canadian superannuation investors in December, handing the toll road giant financial firepower to buy new assets including the Maryland deal and Sydney’s WestConnex.

10.49am:QBE -3.3% on results disappointment

QBE shares fell 3.3pc to $8.42 after reporting a slightly bigger than expected loss and no dividend.

A $1.517bn loss for FY20 was 2pc below Citi’s forecast and the combined operating ratio of 107.4 was worse than the broker’s estimate of 106.2pc.

QBE “expects margin expansion” from what it says is its “exit rate” COR of about 95%, noting current premium rate momentum is in excess of claims inflation, with cost efficiencies also expected to flow through.

This was broadly consistent with Citi’s estimate of 94pc but includes 1.2pc for extra COVID claims.

The FY20 expense ratio of 15.0pc was above Citi’s estimate of 4.7pc, but ex-Covid liabilities, it fell 30bps to 14.3pcs.

And it now targets a 13pc expense ratio by FY23, with a 3 year restructuring charge of US$150m.

“While the headline is a small miss and the lack of dividend may disappoint, the extent of attritional loss ratio improvement and new 13pc expense ratio target, supported by solid pricing momentum should be enough to support the stock,” Citi says.

QBE last down 2.2pc at $8.52.

10.34am:ASX down 0.5% amid earnings

Australia’s sharemarket is on track for its biggest fall in 3-days after negative offshore leads and downgrades on CSL.

The index fell 0.5pc to a four-day low of 6849 in early trading, with the Energy, Materials, Financials, Health Care sectors underperforming.

Rio Tinto and Fortescue fell close to 2pc while BHP lost 0.7pc after strong gains following its report earlier this week.

The biggest drag was CSL, down 1.9pc after three brokers downgraded their ratings after its report yesterday.

Banks were mostly weaker with Westpac down 1.1pc, but ANZ rose slightly after Jefferies upgraded and GS and UBS raised their target prices.

QBE fell 2.2pc after reporting a bigger-than expected loss and a lack of dividend.

Lending some support was a 4.1pc rise in Afterpay after Morgan Stanley boosted its target price target to $170 a share.

Cochlear surged 6pc after its earnings report, while Goodman rose 2.1pc and Inghams surged 7.5pc before fading.

Crown rose 5.7pc after Credit Suisse upgraded and Wesfarmers rose 1.1pc after GS upgraded.

Perry Williams 10.24am:Woodside signs 7-yr LNG deal with German utility RWE

Woodside Petroleum has signed a seven year LNG deal with German utility RWE, a day after it revealed new sales to China had been frozen due to trade tensions.

The sale and purchase agreement for 0.84m tonnes of LNG a year starting in 2025 is not subject to a final investment decision on any project and will be supplied from the producer’s global portfolio.

The two companies will also investigate carbon neutral LNG production and trading as part of the pact.

Woodside told The Australian on Thursday it had been forced to postpone talks to sell LNG to China, the world’s biggest gas buyer, blaming trade tensions between Canberra and Beijing which have forced it to find alternative markets.

Woodside plans to make a final investment decision on its $16bn Scarborough and Pluto-2 LNG expansion in WA during the second half of 2021.

READ MORE: China spat fells Woodside LNG plan

10.04am:Inghams result to see upgrades: Citi

Citi analyst Craig Woolford expects consensus upgrades on Inghams in the order of 3-5pc.

Inghams 1H21 sales rose 5pc to $1.36 billion and EBITDA rose 10pc to $101 million, with “good operating leverage, particularly in Australia and conditions are set for even better growth in the second half.”

“Inghams has delivered a good first-half result, particularly given the disruptions that have been evident in some markets like Victoria in 1H21,” Mr Woolford says.

“The company will lap a more disrupted period from 2H20 and we expect good earnings growth. More quantifiable benefits from its operating efficiency program will support the share price.”

ING shares closed on Thursday at $3.62.

David Ross 9.56am:Covid cleaning boost for Pental; seeking acquisition opportunities

Pental, makers of many of Australia’s popular cleaning products, has delivered a whopping 96 per cent growth in net profit after tax on the back of the Covid cleaning crunch.

The listed cleaning product provider rode the back of strong sales growth in Australia, which grew 19.5 per cent, but won big from an expansion of margins and profitability on its sales.

The cleaning product maker has said the bumper year will assist it in continuing a path of mergers, acquisitions and growth as the business carries no debt and a healthy $2.7m in cash.

Pental has declared a full franked 1 cent dividend.

9.46am:WAM Capital posts 137pc operating profit jump, 22.8pc return

Geoff Wilson backed WAM Capital has converted a strong investment performance to report a massive profit increase, with operating profit up 136.6pc of $166.5m in its half-year result.

WAM’s portfolio has made a 22.8 per cent return before fees in the financial year to date, outperforming its benchmark S&P/ASX ALl Ordinaries Accumulation index by 7.1pc.

Lead portfolio manager Oscar Oberg says he expects markets to remain volatile this year and he continues to invest in highly liquid companies, so that 72pc of the portfolio is able to be sold within 30 days.

The fund manager will pay an interim dividend of 7.75c a share, putting its shares on an annualised fully-franked dividend yield of 7 per cent.

9.33am:What’s impressing analysts today?

Afterpay target price raised 26pc to $170; Overweight rating kept: MS
ANZ raised to Hold: Jefferies
ANZ target price raised 18pc to $28.80: Neutral rating kept: GS
ANZ target price raised 12pc to $28.50; Buy rating kept: UBS
Auckland Airport raised to Neutral: Jarden Securities
Corporate Travel cut to Neutral: Macquarie
CSL cut to Neutral; target price cut 7pc to $305: GS
CSL cut to Neutral: CS
CSL cut to Sell: Morningstar
CSL cut to Neutral: Citi
Crown Resorts raised to Outperform: CS
Growthpoint raised to Buy: Morningstar
IPH target price cut 12pc to $7.55; Buy rating kept: GS
Mortgage Choice cut to Neutral: Citi
Orora target price raised 11pc to $2.99: GS
Orora raised to Buy; target price raised 28pc to $3.20: Citi
Seven Group raised to Overweight: JPM
Seven Group raised to Hold: Morningstar
Sonic Healthcare raised to Buy: Jefferies
United Malt raised to Outperform: CS
Wesfarmers raised to Buy: GS

David Ross 9.14am:Home loans, deposits grow at Mystate, profit up

Mystate has delivered a 12.6 per cent growth net profit after tax despite the broader challenging conditions for the banking sector.

The strong result comes on the back of a first half 18.8 per cent growth in core earnings across the bank to $26.4m.

Strong lending from the bank was coupled with efforts to keep costs low, it said in a statement to the ASX.

Home loans across the bank grew 5.5 per cent across 2020.

Deposits across the group also grew 5.1 per cent.

The big boost to profits lands the bank at $17m net profit after tax for the first half.

An interim dividend of 12.5c a share was declared, a 67.6 per cent payout ratio.

9.11am:ASX expected -0.5% amid earnings

Australia’s share market is set for its biggest fall in three days as the US sharemarket fretted about the recent sharp rise in bond yields.

Overnight futures relative to estimated fair value suggest the S&P/ASX 200 index will open down about 0.5pc near a four-day low around 6850.

That follows at a 0.4pc fall in the S&P 500 that marked its first three-day fall this year.

It came as the US 10-year bond yield remained near a 12-month high of 1.33pc hit on Wednesday after rising as much as 13bps this week.

While US weekly initial jobless claims rose more than expected and housing starts fell more than expected, much stronger than expected retail sales and PPI data this week raised overheating fears.

Domestically the focus is on results from Cleanaway, Cochlear, Goodman, QBE and Inghams.

Major rating changes include ANZ raised to Hold by Jefferies, CSL cut to Neutral by Goldman Sachs and Credit Suisse, Seven Group raised to Overweight at JPMorgan.

Bank of Queensland remains in a trading halt for a capital raising understood to be for a $1.3bn bid for ME Bank.

GUD and Ingenia Communities trade ex-dividend.

S&P/ASX 200 last at 6885.87.

Ben Wilmot 8.58am:Lendlease sells one quarter stake in retirement business to Aware Super

Development giant Lendlease is stepping up its balance sheet clean up and sold off a 25 per cent interest in its $1.9bn retirement business to superannuation funds Aware Super.

While terms were not disclosed the company is one Australia’s largest owners, operators and developers of retirement villages with a portfolio of 75 properties that house more than 16,000 residents.

The business will continue to operate under the Lendlease brand and the network of retirement villages.

Lendlease will keep a 50 per cent interest in the retirement business with Dutch pension asset manager, APG Asset Management, and Aware Super each holding a 25 per cent interest.

Aware Super’s investment in the retirement unit extends the strong ties between the two companies including a residential partnership that invests in urbanisation projects across Chicago, Boston, New York and Los Angeles.

Aware Super will acquire its 25 per cent interest in the Retirement Living business at book value.

Lendlease property chief executive Kylie Rampa said that the company was a leader in the retirement sector and was committed to maintaining focus on supporting the needs of Australia’s ageing population.

Lendlease has vowed to accelerate the introduction of capital partners to its business and has also simplified its balance sheet with the sale of telco and solar assets in the US.

David Ross 8.55am:Online sales up 102pc at Shaver Shop driving big profit gain

The Shaver Shop has delivered a bumper net profit after tax, up 85.5 per cent, with total sales up 15 per cent, and online sales a key driver for the business.

Across the half, online sales grew 102 per cent, now representing 1 in 3 of total corporate sales across the retailer.

The Shaver Shop did so well it didn’t qualify for any JobKeeper payments.

An interim dividend of 3.2c a share, fully franked, has been declared, up 52.4 per cent.

Lachlan Moffet Gray 8.44am:Cochlear to repay JobKeeper, unit sales fall

Hearing assistance device company Cochlear has decided to repay the JobKeeper it received in the first half of the financial year as its profit begins to recover from the impact of COVID-19 hospital shutdowns.

The company’s sales revenue and profit decreases were in low single digits when compared to 2020’s record half year result.

The company said it sold 17,377 units in the six months to December 31 - an 8 per cent decline on the same period last year - but sales revenue fell just 4 per cent to $742.8m.

Underlying net profit fell 6 per cent to $125.3m - but on a statutory basis, profit jumped 50 per cent to $236.2m due to the realisation of one-off benefits.

These benefits include $59.0m in patent litigation‐related tax and other benefits, $34.7m in innovation fund gains and $17.2m in COVID government assistance, net of tax.

This government assistance was worth $24.6m before tax and will be repaid to the governments who paid it out, including the $23.1m was received from the JobKeeper program from the Australian government.

An interim dividend of $1.15 a share was declared, down 28 per cent on the prior comparable period.

The company gave official guidance of a net profit of $225m‐245m for the full year, and committed to a dividend payout policy of 70 per cent of underlying net profit.

Dig Howitt: Cochlear CEO. Picture: by James Croucher

Ben Wilmot 8.43am:Goodman Group upgrades to forecast $1.2bn operating profit

Industrial property powerhouse Goodman Group has turned in a $614.9m operating profit and upgraded target operating profit to $1.2bn for the full year as it rides the logistics boom.

The company is firing on the back of the surge in e-commerce driven by the pandemic and companies worldwide overhauling their supply chains.

The forecast is a 12 per cent lift on last year and comes as the company broke through the $50bn funds barrier as its empire now spans $51.8bn of property in Australia, Asia, Europe and the US.

Lachlan Moffet Gray 8.30am:Inghams lifts volumes to boost profit 35pc

Chicken processor Inghams has boosted its half year profit as volumes lifted in spite of COVID-19 continuing to disrupt exports.

The company recorded a statutory net profit after tax of $35.5m, up 34.7 per cent on the prior comparable period, and declared a fully franked dividend of 7.5 cents a share - a 2.7 per cent increase on last year.

CEO and managing director Jim Leighton said the result demonstrated Ingham’s five year turnaround plan was working.

“These results have been delivered despite the continued impact of COVID-19, ongoing high realised feed prices and the partial closure of Australia’s poultry export channels due to industry Biosecurity issues in Victoria,” he said.

“Our strategy is driving performance and delivering improved returns.”

The company did not provide official guidance but said the net impact of lower feed prices is expected to be lessened in the second half of the year.

8.26am:Lovisa revenue struck by Covid closures

Lovisa sees an improving sales trajectory, and upped its declared dividend by 5c a share to 20c a share, 50pc franked for its half year 2021 earnings results, but sales and revenue fell.

In a statement to the ASX, the company said revenue was $146.9m down 9.8pc on 1H20 with comparable store sales down 4.5pc for the period, with Q1 heavily impacted by temporary store closures in Victoria, Australia, as well as weakness in most global markets.

“With Victorian stores re-opening in Q2 and most other markets showing improved performance we saw positive comparable store sales through Q2 as mall traffic began to return, however this was again negatively impacted in the Northern Hemisphere markets as COVID cases began to increase again and temporary store closures were again put in place,” it said.

Photo Brenda Strong / The Observer

It gave no guidance or outlook, but said trading for the first seven weeks of the second half has seen continued strong performance from the Southern Hemisphere markets and challenging trading conditions in the Northern Hemisphere, with comparable store sales for this period of +12% overall.

The acquisition of the beeline retail business is expected to be completed as planned from March - May 2021.

It has 460 stores globally. Currently 42 stores in the UK and 23 stores in France closed temporarily due to continued government lockdowns, with stores in Malaysia now back open after being closed for a period of 4 weeks. Short lockdowns in Australia and New Zealand impacted over the past 7 weeks, however all stores are currently back trading.

John Durie 8.20am:Wesfarmers a Buy as it returns to its entrepreneurial past: BAML

Long time bear BAML analyst David Errington has restored a Buy rating on Wesfarmers with a price target of $61.50 (Thursday close at $54.49) based on the strength of Bunnings and the Kmart group.

In a note today Errington also said the company’s $1.7bn lithium play looks well managed and a return to the company’s entrepreneurial past.

Lachlan Moffet Gray 8.19am:Cleanaway profit, dividend boost, but no guidance

Waste management company Cleanaway has marked the final half with CEO Vik Bansal at the helm by handing down an almost doubled net profit and an increased dividend for the six months to December 31.

Although net revenue remained materially unchanged from the prior comparable period at $1,070bn, statutory net profit after tax grew 75.3 per cent to $79.4m due to the absence of underlying adjustments this year.

A dividend of 2.25c a share fully franked was declared, up 12.5 per cent on the prior comparable period.

Solid waste services saw revenue grow 2.1 per cent while the impacts of COVID-19 saw industrial and waste services revenue decline 8.4 per cent and liquid waste and health services decline 2.3 per cent.

The company did not provide guidance citing COVID-19 uncertainty.

Mr Bansal said he was proud of what the company had achieved during his five year tenure as CEO.

“Today I am reporting my final set of financial and operational results for Cleanaway, with record outcomes achieved again across all key metrics,” he said.

“I am proud of the performances that we have delivered, and I will miss the Cleanaway management and operations teams across the country that have helped deliver those results.

“The performance that we have achieved in our businesses over the past five years and strategies that we have implemented have delivered significant value for all our stakeholders through strategic acquisitions, organic growth, and operational and capital discipline.”

Vik Bansal’s departure comes after a series of allegations of workplace misconduct and bullying.

8.07am:Tech stocks take broader market lower on Wall Street

US stocks dropped on Thursday, weighed down by losses among technology companies.

The Dow Jones Industrial Average fell 0.6%. The S&P 500 declined 0.4% and the Nasdaq Composite lost 0.7%, adding to losses after a volatile day for tech stocks on Wednesday.

Stocks have taken a breather in recent sessions after powering higher for much of 2021. Money managers say they see a number of reasons to stay cautious, ranging from lofty valuations across parts of the market to the pace of the economy’s recovery.

Data on Thursday showed 861,000 workers sought unemployment benefits last week, more than economists had expected.

Tech stocks led declines in the broader market on Thursday, with Facebook falling 1.2% and Apple down 0.8%.

GameStop shares fell 10.9% as lawmakers began a House Financial Services Committee hearing on what drove the wild rally in retailer’s shares last month. Shares rose as high as $483 late January before tumbling to trade around $41 Thursday.

Walmart shares dropped 6.2% after the retailer posted results for the holiday quarter and said it would raise wages for about 425,000 employees.

In overseas markets, the Stoxx Europe 600 fell 0.8% on a busy day for earnings in the region, notching its third consecutive session of declines.

Individual movers included UK bank Barclays, which fell 4.4% after proposing a smaller dividend than some investors were expecting.

Major Asian markets were mixed. China’s Shanghai Composite Index gained 0.6%, while Japan’s Nikkei 225 slipped 0.2% and Hong Kong’s Hang Seng lost 1.6%.

Joyce Moullakis 8.05am:No QBE dividend with loss and lower investment income

QBE Insurance has flagged a better 2021, after deciding not to pay a final dividend for last year due to marked losses of $US1.5bn and lower investment income.

QBE’s result came in at a statutory net loss of $US1.5bn for the 12 months ended December 31, compared to a $US550m profit in 2019, the group said in an ASX statement on Friday. The insurer’s board said it would resume dividend payments with its 2021 first-half results.

Interim group chief executive Richard Pryce said: “ While obviously disappointed with the headline loss, premium momentum accelerated across 2020 and has continued into 2021. Coupled with the improved positioning of the underlying business, we enter this year with confidence and optimism.”

Photographer: Ian Waldie/Bloomberg

In December, QBE signalled its result would come in as a full-year loss of $US1.5bn, with its bottom line hit by large writedowns, COVID-19 costs and elevated catastrophe costs.

Business interruption insurance claims stemming from COVID-19 are a big issue for the sector this year, and QBE has exposure in the United Kingdom and Australia to unfavourable legal test case rulings,

QBE parted ways with former group CEO Pat Regan in September last year due to inappropriate conduct following a complaint from a US-based female employee.

The stock has gained 2.2 per cent so far this year.

Joseph Lam 7.25am:Frydenberg, Zuckerberg to talk again

Josh Frydenberg will again speak to Facebook chief executive Mark Zuckerberg on Friday following the social media giant’s decision to ban news in Australia.

This will be the third time this week the federal Treasurer has spoken to Mr Zuckerberg, following conversations on Sunday and again on Thursday as the news ban was rolled out.

Mr Frydenberg said the pair had exchanged messages on Thursday following the ban which he described as “heavy handed” and damaging to Facebook’s reputation in Australia.

7.10am:ASX set to open lower as Wall Streets slips

Australian stocks are poised for early falls as Wall Street slipped, pulled down by tech stocks and jobless claims.

At about 7am (AEDT) the SPI futures index was down 26 points, or about 0.4 per cent.

Yesterday, the ASX 200 ended flat.

With an hour of trade to go on Wall Street, the Dow was down 0.2 per cent, the S&P 500 was down 0.3 per cent and the Nasdaq was 0.5 per cent lower.

The Australian dollar is higher at US77.66c.

Iron ore spiked 3.3 per cent to $US174.45 a tonne.

Brent crude is down 0.6 per cent to $US63.93 a barrel.

6.50am:Oil down on supply boost talk

Oil futures settled with a loss weighed down by speculation that the Organisation of the Petroleum Exporting Countries and its allies, together known as OPEC+, may decide at an early March meeting to boost crude production.

A fourth straight weekly decline in US crude supplies and ongoing energy production issues tied to frigid temperatures in Texas failed to provide lasting support to prices in Thursday’s session.

March West Texas Intermediate crude fell 62 cents, or 1 per cent, to settle at $US60.52 a barrel on the New York Mercantile Exchange.

Brent crude is down 0.6 per cent to $US63.93 a barrel.

Dow Jones

6.20am:Shockwaves as Facebook turns off Australia news

Facebook’s stunning decision to turn off the news for Australia highlights a long-troubled role for the US tech giant which stumbled into the news business and has grown into one of its most powerful forces.

The announcement by Facebook, defying Australia’s efforts to impose a payment scheme for media featured on the platform, raises fresh questions about the future of the platform used by some two billion people and its relationship with the news media.

Analysts pointed out that Facebook, even though it was not created as a news organisation, has become a critical source of information for many people around the world, especially younger internet users, with traditional media on the decline.

“This is a very stark reminder of the power of Facebook,” said Kjerstin Thorson, a Michigan State University professor specialising in social media.

“The idea that with a flick of a switch you could shut down a civic infrastructure -- that’s a wake-up call.” Thorson noted that Facebook’s action may deprive users of “high quality information” but “doesn’t remove people’s desire to know what’s happening. That’s an opportunity for noxious information and rumours to circulate.”

Ken Paulson, a former USA Today chief editor who is now on the faculty at Middle Tennessee State University, said the social media giant risks eroding trust in global information if the blackout becomes widespread: “Facebook without real news would be a conspiracist’s fantasy.”

Facebook made the announcement as Australia put the finishing touches on legislation that would force digital platforms to pay for news and links under a threat of government-imposed arbitration.

The Australian measure “fails to recognise... the fundamental nature of the relationship between our platform and publishers,” said Campbell Brown, Facebook’s head of global news partnerships in a blog post.

“Contrary to what some have suggested, Facebook does not steal news content. Publishers choose to share their stories on Facebook. From finding new readers to getting new subscribers and driving revenue, news organisations wouldn’t use Facebook if it didn’t help their bottom lines.”

Facebook’s move in Australia has been widely condemned as “bullying”. Picture: AFP

Facebook’s move contrasted with Google, which in recent days has brokered deals with media groups, including Rupert Murdoch’s News Corp, in response to the Australian regulatory push.

Facebook maintains that news content makes up only four per cent of people’s feeds. But Thorson said that despite the small percentage, “for many people Facebook is their main source of information,” making it a critical part of civic discourse.

“I don’t think this problem will be solved without some form of government regulation,” she said. The standoff in Australia “is about the renegotiation of a relationship that has been strained for years,” said Chris Moos, a researcher and lecturer with Oxford University’s Said Business School.

While it appears that Facebook has the upper hand, Moos maintains that the social media leader would lose its appeal if it moves away from professional news content.

“It would be impossible to imagine Facebook (and WhatsApp) to maintain cross-demographic popularity without media content of at least the big media organisations,” Moos said.

“Media organisations and Facebook need each other. Both parties have every incentive to collaborate to come to agreements.” Paulson said it remains unclear whether Facebook would suffer from a disengagement with news, with Australia becoming a test case.

“If people only come to Facebook for social experiences and cat photos, it will face no economic pressure,” he said.

AFP

5.10am:Tech stocks weigh on Wall Street

US stocks dropped, weighed down by losses among technology companies and jobless claims.

The Dow Jones Industrial Average fell 200 points, or 0.6 per cent, to 31412 around midday. The S&P 500 declined 0.8 per cent and the Nasdaq Composite lost 1.2 per cent, adding to losses after a volatile day for tech stocks yesterday.

Data Thursday showed 861,000 workers sought unemployment benefits last week, more than economists had expected.

Still, many investors remain upbeat overall about the outlook for stocks. They say the possibility of more fiscal stimulus, progress on distributing COVID-19 vaccines and gradual reopening of the economy should help drive earnings higher throughout the year.

Tech stocks led declines in the broader market, with Facebook, Apple and Microsoft each falling at least 1 per cent.

Walmart shares dropped 5.2pc after the retailer posted results for the holiday quarter and said it would raise wages for about 425,000 employees.

Dow Jones

5.05am:Robinhood CEO apologises for limiting trading

Robinhood chief executive Vlad Tenev used his oral testimony before Congress to apologise to customers for the restrictions it introduced in late January that prevented them from buying shares in GameStop and other hot stocks.

“Despite the unprecedented market conditions in January, at the end of the day, what happened is unacceptable to us,” Mr. Tenev said. He wanted customers to know that Robinhood is “doing everything we can to make sure this won’t happen again.”

Mr. Tenev also argued that Robinhood is helping its customers to build wealth and pay down debt. As of today, the total value of Robinhood’s customers’ assets exceeded the amount of money they deposited on the platform by more than $US35 billion.

“While markets fluctuate, this tells me that our business model is working for everyday Americans,” Mr. Tenev said.

Logo of the trading app Robinhood. Picture: AFP

Dow Jones Newswires

5.00am:Inflation fears top recovery hopes as stocks slide

Stocks mostly fell as profit-taking and growing inflation worries overshadowed optimism about an expected strong economic recovery, the easing coronavirus crisis and US stimulus hopes.

Oil however barrelled upwards to 13-month highs as the severe cold snap in the United States hammered production, trumping news that Saudi Arabia is planning to hike output in light of rising prices.

Wall Street opened lower, with the Dow shedding 0.7 per cent on data that showed US initial unemployment benefits applications are on the rise.

London stocks tumbled 1.4 per cent as the pound approached $1.40. Meanwhile Paris dropped 0.7 per cent and Frankfurt drifted 0.2pc lower. Asian markets struggled. Tokyo, Singapore, Seoul, Wellington, Manila, Mumbai and Bangkok all fell, with Hong Kong more than one per cent off after a seven-day run-up.

Shanghai rose as it reopened after a week-long holiday, while Taipei and Jakarta also rose and Sydney was essentially unchanged.

Bitcoin meanwhile declined to $US51,973, having soared on feverish investor demand late Wednesday to a record $US52,631.92.

“The quiet atmosphere in European markets has continued,” noted analyst Chris Beauchamp at trading firm IG.

“The generally quieter tone to the week, both on the corporate and earnings front, has generally left investors without much in the way of a catalyst.” Global equities have enjoyed bumper gains on mounting confidence that the world economy will rebound from last year’s collapse as COVID-19 vaccination programs allow people to slowly get back to a semblance of normality.

AFP

4.59am:US home construction slows in January

New home construction projects that started last month slowed for the first time since August, due to a sharp drop in single-family homes, according to US government data.

American builders have struggled to keep up with strong demand for homes, amid rising lumber prices and a shortage of workers, but construction had continued to rise as rock-bottom borrowing rates sparked a buying spree during the COVID-19 pandemic.

In January, new construction projects dropped 6.0 per cent compared to December, falling by one million to a seasonally-adjusted annual rate of 1.58 million units, the Commerce Department reported.

AFP

4.57am:US jobless claims edge up

More workers filed new applications for US jobless benefits last week, arresting tentative signs of progress in the recovery from the coronavirus pandemic, according to government data released Thursday.

And revised data showed that rather than declining, applications in the prior week actually increased sharply, the Labor Department reported.

New jobless claims rose 13,000 in the week ended February 13, to 861,000, seasonally adjusted, after a 36,000 increase in the week ended February 6, meaning applications generally have been rising since the start of the year.

Some of the increase in recent weeks can be attributed to the stimulus package Congress approved in late December that extended some unemployment programs.

AFP

4.55am:Walmart reports strong 4Q sales

Walmart reported strong fourth-quarter sales amid the upheaval of the coronavirus pandemic, but shares fell sharply as it announced costly investments on technology and higher wages.

The retail giant reported a fourth-quarter loss of $US2.1 billion from the accounting for asset sales, compared with profits of $US4.1 billion in the year-ago period. Revenues rose 7.3 per cent to $US152.1 billion.

Shares fell about five per cent after the company announced a steep increase in capital spending.

Walmart will ramp up investments on automation and supply chain improvements and boost wages for some 425,000 US workers as it works to build on the momentum from the pandemic when it picked up new customers and grew its e-commerce operation.

“

The wage increases will lift Walmart’s US employee average wage to above $US15 per hour. However, Walmart did not alter its national minimum wage, which is currently $US11 an hour. Shares fell 4.7 per cent to $140.35.

AFP

4.50am:Gupta’s Liberty says door open for Thyssenkrupp deal

Liberty Steel Group said that the door is still “open” for the potential purchase of the steel activities of troubled German industrial giant Thyssenkrupp.

The news came one day after Thyssenkrupp had declared that it was no longer considering selling its steel unit to Liberty, which is owned by Indian-British billionaire Sanjeev Gupta.

“Discussions have been suspended at this stage due to differences in pricing expectations -- however we are keeping the door open,” a Liberty spokesperson said, noting the announcement from Thyssenkrupp.

“Liberty remains confident that it has put forward the only long term sustainable plan for Thyssenkrupp’s steel business and we will continue to engage to seek to eliminate the valuation gap in due course.” The brief statement came after Thyssenkrupp ended talks with Liberty on Wednesday, declaring that the two sides were too far apart on corporate value and the structure of the transaction.

The German titan indicated it would instead hold on to the steel unit, saying it would focus efforts on addressing “the consequences of the corona pandemic and to make steel sustainably profitable and thus future-proof.” Thyssenkrupp, in the throes of a painful restructuring, had received an offer from Britain’s Liberty Steel last October but had not formally responded to it before Wednesday’s statement.

Sanjeev Gupta, executive chairman of Liberty House Group. Picture: Bloomberg

AFP

4.45am:Daimler sees good times ahead despite pandemic

German automobile giant Daimler predicted its sales and revenues will rise “significantly” in 2021, despite the impact of the coronavirus pandemic.

“We are confident that we can maintain positive momentum if current market conditions prevail,” CEO Ola Kallenius said in a statement.

Current shortages of semiconductor chips that are slowing car production worldwide “can be compensated for by the end of the year”, the Mercedes-Benz maker said.

Outsized demand for personal electronics as huge swathes of populations work from home during the pandemic has led to an acute shortage of semiconductor chips.

For 2020, Daimler booked 4.0 billion euros in net profit, a 48 per cent increase on the previous year when it was hit by one-off expenses.

The group confirmed preliminary results from January showing profit before interest and taxes (EBIT) of 6.6 billion euros ($US8.0 billion), up by around half on 2019’s figure.

Activity rebounded sharply in the fourth quarter after a dramatic slowdown early in the year due to the pandemic.

Daimler said it expects the global economy to recover strongly in 2021 “in the absence of further unexpected pandemic-related setbacks”.

AFP

4.43am:Barclays bank profit tumbles on pandemic fallout

British bank Barclays announced a 38-percent slump in net profit for 2020 and said expenses related to the coronavirus pandemic were set to stay high this year.

Profit after tax fell to £1.53 billion ($US2.12 billion, 1.76 billion euros), Barclays said in a statement.

Group credit impairment charges shot up to £4.8 billion from £1.9 billion owing “to the deterioration in the economic outlook driven by the COVID-19 pandemic”, the bank said.

Despite the tough year, “Barclays remains well capitalised, well provisioned for impairments... with a strong balance sheet, and competitive market positions across the group”, chief executive Jes Staley said in the statement.

“We expect that our resilient and diversified business model will deliver a meaningful improvement in returns in 2021,” he added.

As well as offering a dividend to shareholders, Barclays said it would buy back shares at a cost of up to £700 million.

The bonus pool for 2020 stood at around £1.6 billion, up six per cent. At the same time, the bank said that “COVID-19 related expenses are likely to remain elevated in 2021”.

Barclays profit tumbled. Picture: AFP

AFP

4.40am:Credit Suisse net profit slumps

Credit Suisse, Switzerland’s number two bank, said its 2020 net profit tumbled 22 per cent to 2.7 billion Swiss francs (2.4 billion euros), hit by the pandemic downturn and provisions.

Income was flat at 22.3 billion Swiss francs as international fund management suffered, but this was offset in part by gains in investment services, it said.

Fund management fell 8.0 per cent to 13.6 billion Swiss francs as a drop in commission charges undercut an increase in business.

The investment banking arm saw turnover jump 19 per cent to 10.2 billion Swiss francs, reflecting the rebound in financial markets after the initial sharp falls of early 2020 caused by the pandemic.

Credit Suisse said it set aside provisions of just under one billion Swiss francs to cover legal disputes dating back to the global financial crisis in 2008-09, and also took restructuring charges.

For 2021, the bank said it had got off to a “very good” start, but it warned that the “COVID-19 pandemic is not over... and the pace of the recovery remains uncertain.”

AFP