S&P/ASX 200 ASX finishes flat, BoQ to buy ME Bank
The ASX 200 finished flat amid mixed trading, as Treasury Wine shares powered back and BoQ made a move on ME Bank.
- Covid vaccine ‘on time’ as CSL profit soars
- Zuckerberg bans Aussies from viewing or sharing news on FB
- ANZ unwinds provisions as economy improves
- Origin profit burned by power prices, economy
Welcome to the Trading Day blog for Thursday, February 18. Australia’s sharemarket finished flat after world markets mainly fell overnight. The ABS released January labour force figures, and it was s another busy day for earnings, with results from Fortescue, Woodside, Origin, Coca-Cola Amatil, South32, CSL, Star, Wesfarmers, Santos and Crown Resorts, among others.
7.10pm:Barclays profit tumbles 38%
British bank Barclays on Thursday 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, 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”.
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.
AFP
5.38pm:Tokyo closes lower
Tokyo stocks closed lower Thursday as investors remained cautious about over-valuation after recent rallies.
The benchmark Nikkei 225 index fell 0.19 percent, or 56.10 points, to 30,236.09, while the broader Topix index was down 1.00 percent, or 19.58 points, at 1,941.91.
AFP
5.35pm: Airbus posts another billion-euro loss
European aircraft giant Airbus said Thursday it was able to limit its losses last year as the airline sector collapsed in the wake of the coronavirus pandemic.
Airbus said in a statement that it booked a net loss of 1.1 billion euros ($1.3 billion) in 2020, a slight improvement over the previous year’s bottom-line loss of 1.4 billion euros, demonstrating the group’s “resilience... in the most challenging crisis to hit the aerospace industry”.
AFP
5.00pm:BOQ halted for raising, acquisition
Bank of Queensland shares have been placed in a trading halt for an as yet unspecified capital raising and acquisition.
BOQ has requested two consecutive trending halts for up to four consecutive trading days.
It comes after The Australia’s Bridget Carter said BOQ was planning to buy ME Bank for $1.3bn.
4.41pm: ASX ends flat amid mixed trading
Australia’s sharemarket ended flat in mixed trading amid earnings reports and consolidation on Wall Street’s near record highs.
The S&P/ASX 200 ended less than 1 point higher at 6907 after hitting an early low of 6875.4 and a mid-afternoon high of 6807.
The health care, consumer discretionary and financials sectors lent support while real estate, energy, utilities, industrials, communications, staples and materials underperformed.
CSL rose 2.8pc after its flu division boosted earnings, Westpac rose 3.5pc, Domino’s rose 5.6pc and Treasury Wine surged 18pc on broker upgrades, while ANZ rose 2.8pc on a strong trading update, and Fortescue gained 1.9pc after its dividend beat estimates.
Coles fell 5.6pc after its earnings report and Woodside lost 2.4pc. Bendigo, GPT and James Hardie fell ex-dividend.
WTI crude oil rose much as 1.8pc to a 13-month high of $US62.27 in APAC trading with about 40pc of US output shut in by the cold snap.
After the close, The Australian’s Bridget Carter reported that Bank of Queensland is buying ME Bank for $1.3bn with a deal as early as this week.
John Durie4.28pm:Treasury Wine’s share fight back
TWE’s stock price climbed 17.5 per cent on Thursday after reporting better than expected earnings numbers resulting in a string of profit upgrades.
The company reported earnings before interest and tax of $280 million in the first half and the market is now looking for $500 million in the full year.
The stock price closed up 17.5 per cent at $11.91 a share., its highest price since August last year when the China wine ban was mooted.
Bridget Carter4.20pm:BoQ to buy ME Bank
DataRoom | Bank of Queensland is believed to be buying ME Bank for $1.3 billion, with a deal to be announced as early as this week.
The understanding is that a $600m equity raising is also on the cards.
More to come.
4pm:Dogecoin has a top dog
The dogecoin market has a pack leader. Records show that a person, or entity, owns about 28% of all of the cryptocurrency in circulation - a stake worth about $2.1 billion at current prices. The holder’s identity isn’t known, which is common in the opaque world of digital currencies.
It is hard to tell what to make of this giant position in what has long been a small and niche corner of the cryptocurrency world.
Dogecoin was created in 2013 as a satirical homage to bitcoin. Its developers were riffing off the meme of a Shiba Inu dog with bad spelling habits. It wasn’t designed to be used as a form of payment, or as anything except a joke. At the start of 2021, a dogecoin was worth about half a cent, even as bitcoin prices had surged to nearly $30,000.
Things have changed this year. Dogecoin surged in popularity after business and pop-culture icons including Tesla’s Chief Executive Officer Elon Musk, rapper Soulja Boy and “Malcolm in the Middle” star Frankie Muniz began promoting it online. It isn’t clear what caught their attention.
Dogecoin’s price has climbed over 900% this year to 5 cents apiece, according to CoinDesk. That makes the market worth about $6.9 billion, and puts its largest owner’s holdings at roughly $2.1 billion.
Read more:Dogecoin has a top dog worth $2.1bn
The Wall Street Journal
3.28pm:Thredbo operator Event Hospitality posts $60m loss
Event Hospitality, owner of Greater Union Cinemas, Rydges hotels and the Thredbo Alpine Resort, posted first half revenue of $294.1m, down 58pc on year, and a net loss of $60.2m.
The company said it would not pay an interim dividend.
Dow Jones Newswires
2.59pm:ASX pares gain as US futures waver
Australia’s sharemarket briefly pared an intraday gain as US futures wavered.
The S&P/ASX 200 dipped to the unchanged mark after rising as much as 0.3pc to 6907 intraday.
S&P 500 futures are down 0.2pc near intraday lows after turning up 0.2pc earlier.
WTI crude oil futures are up 1pc after rising 1.8pc to a 13-month high of $US62.27 in APAC trading.
Interestingly the US 10-year bond yield fell as much as 4bps to 1.258pc a couple of hours ago.
But spot gold rse 0.6pc and Comex copper rose 1.8pc intraday.
US economic data for January data may be showing signs of overheating.
But the market isn’t seriously betting that the US will do any less stimulus because of that.
S&P/ASX 200 last up 0.1pc at 6894.4.
James Gerrard 2.50pm:Getting to know crypto: A How To Invest Guide
It has been a long time since we have seen an investment that has been so polarising as digital currencies.
Whether or not Bitcoin and other alternative coins replace traditionally government-issued paper currency, known as fiat money, is yet to be seen.
However, recent moves by the likes of Tesla to purchase $US1.5bn ($1.9bn) of Bitcoin helps add to its mainstream acceptance. Indeed, if estimates that perhaps 5 per cent of self-managed super fund investors have Bitcoin holdings are correct then it clearly is time to figure out your approach to the issue.
When you buy or sell shares in Australian listed companies, you use a stockbroker to place the trade on the Australian Stock Exchange and either send or receive cash.
Cryptocurrencies operate in a similar way, but when you buy or sell coins such as Bitcoin or Ethereum you do so using a specialist online exchange. In Australia, one of the largest exchanges is BTC Market, which opened in 2013 when the price of one Bitcoin was $110 (it is now around $60,000).
Caroline Bowler, CEO of BTC Markets, says: “We now have just under 300,000 clients on our platform and have seen a wide variety of users join. SMSF account openings grew fivefold in 2020 and people aged over 60 now represent 9 per cent of our client base whereas in 2017 they were 5 per cent.”
READ MORE: Getting to know Bitcoin and other crypto
2.42pm:Treasury Wine shares pop on broker upgrades: CommSec
Treasury Wine $TWE is popping 14% higher having received broker upgrades & price target increases following its interim profit result yday #ausbiz
— CommSec (@CommSec) February 18, 2021
READ MORE: Treasury Wine Estates says it hasn’t given up on China
Giuseppe Tauriello2.24pm:Jumbuck Pastoral completes $104m Wave Hill purchase
AFL boss Gillon McLachlan and the billionaire family behind Reece Plumbing are among investors in Jumbuck Pastoral’s acquisition of the historic Wave Hill cattle station in Northern Territory.
The syndicate, led by Jumbuck’s Adelaide-based MacLachlan family, splashed out $104m for the property, which spans 1.25 million hectares across the NT’s Victoria River District, 750km south of Darwin.
The price includes the expansive landholding as well as 40,000 cattle, and is one of the highest prices ever paid for a single cattle property in Australia.
Wave Hill Station is best known as the scene of the Wave Hill Walk Off - a strike by Gurindji stockmen in 1966 which went on to shape the Aboriginal Land Rights movement in the 1970s.
Wave Hill was sold by one of Australia’s largest beef producers, Western Grazing, which owned the operation since 1992.
A deal to sell the property to Jumbuck, owned by the MacLachlan family and run by the AFL chief executive’s cousins Jock and Callum MacLachlan, was announced in December and settled last week.
Chris Griffith 2.00pm:How Facebook’s move in Australia will impact its bottom line
Facebook’s blackout on news posts sent shockwaves through cyberspace on Thursday but Australia represents a drop in the ocean in terms of a financial hit for the $1 trillion social media giant.
On the global stage Facebook rakes in billions. In 2020, it posted global revenue of $US85.9bn ($111bn) and net profit of $US29.1bn ($37.5bn).
In Australia, the income is relatively paltry. In 2019, Facebook generated $167m in revenue in Australia, mostly on ad sales. Its full year profit in Australia was $22m, latest accounts filed with the corporate regulator show.
In short, Australia doesn’t move the financial dial.
Facebook’s New York-listed shares on Wednesday closed down 0.1 per cent at $US273.57 giving it a market capitalisation of a little over $1 trillion. In comparison, the sum of all of Australia’s annual economic output is $1.79 trillion.
So why is Facebook taking a heavy handed approached when asked to pay news media organisations non-material for helping keep eyeballs on its platform reading ads?
Perry Williams 1.37pm:APA Group hit with a $249m writedown
Gas pipeline giant APA Group has been hit with a $249m writedown over delays and extra costs at its Orbost gas processing plant on Victoria’s Bass Strait coast.
The plant has been plagued by start-up issues which are still being investigated and have meant the facility is producing at rates a third below its target of 68 terajoules a day. Orbost is processing gas from Cooper Energy’s $600m offshore Sole field.
“The impairment reflects increased capital expenditure and reassessment of the plant’s future cash flows following commissioning work during the half year period,” APA said in a statement.
“The impairment charge reflects the continuation of production levels and expenditure based on the current performance of the asset since re-configuration and resumption of processing at the processing plant.”
The $249m pre-tax charge is non cash and will be recorded in APA’s interim results on Tuesday.
APA said “root cause analysis” over the problem at Orbost is ongoing and it expects to achieve the 68TJ goal, without adding any timeframe for hitting that target.
1.24pm:Bunnings, Officeworks drive WES stellar performance: S&P Global Ratings
Wesfarmers (A-/Stable/A-2) continues to ride the wave of increased consumer spending on home improvement projects, homewares, and work-from-home needs, S&P Global Ratings said today. The strong momentum of increased transactions and purchase amounts at home-improvement store Bunnings, Officeworks, and Kmart Group has driven consolidated group EBITDA growth of 18.2pc in the six months to December 31, 2020.
“We believe Wesfarmers’ diverse portfolio of retail businesses positions the company well to benefit from consumers continuing to redirect discretionary income toward at-home purchases given the ongoing restrictions on international travel and intermittent periods of COVID-19 stay-at-home orders.
“We expect Wesfarmers’ retail sales growth to remain above historical rates over the coming 12 months, however, we do not anticipate sales growth rates to match the extraordinary levels seen at the onset of the pandemic in early 2020. In addition, significant increases in demand for Officeworks’ home office products such as technology and furniture are likely to moderate over the next 12 months as these purchases are in large part driven by one-off home office setup requirements.
“Wesfarmers’ decision to increase its interim dividend payment by around 17pc (compared with the prior period) can be accommodated within our credit metric expectations. We believe Wesfarmers’ balance-sheet strength, available liquidity, and headroom in its credit metrics allow the company to pursue its operating strategy.
“We expect the company to remain disciplined in the deployment of capital during any future active portfolio management periods. This translates into an S&P Global Ratings’ lease-adjusted credit metric of debt to Ebitda remaining below 2.75x.”
1.06pm:New laws apply on director resignations: ASIC
The Australian government has introduced new laws to help combat illegal phoenix activity, says ASIC, Australia’s corporate, markets and financial services regulator.
“From today, a company director will not be able to backdate their resignation more than 28 days or resign if it means the company would be left without a director,” the regulator says.
Backdating resignations was a common tactic used by directors to engage in illegal phoenix activity, according to ASIC.
From today, a company director will not be able to backdate their resignation more than 28 days or resign if it means the company would be left without a director. Read more https://t.co/zGsAby2VWbpic.twitter.com/0il6Gzyu4d
— ASIC Media (@asicmedia) February 18, 2021
Perry Williams 12.29pm:Woodside watching FMG costs blowout
Fortescue Metals Group’s budget blowout on its Iron Bridge mining project in West Australia’s Pilbara is being closely watched by Woodside Petroleum amid concerns resources inflation could hit big gas projects as the LNG producer warned of higher costs for offshore drilling.
The mining giant flagged a $US400m blowout in the likely cost of its Iron Bridge magnetite project in the Pilbara, along with a delay of up to six months in delivering first production.
Woodside is targeting the green light for its $16bn Scarborough and Pluto expansion gas project in the second half of 2021 and said it was watching miners’ cost issues.
“We’ve seen things happening up in the Pilbara with other projects and so forth outside of the oil and gas industry and we’re watching that very closely also to ensure that some of those impacts don’t come across to Pluto train 2 execution,” Woodside chief executive Peter Coleman told analysts after its annual results.
The LNG producer said it does expect a cost jump in WA offshore drilling.
“We believe in that 2023-24 timeframe - particularly in offshore drilling - there is an increased likelihood of price increases in the double digits as we see drilling rigs continue to be cold stacked and scrapped,” Mr Coleman said, referring to the process of shutting down rigs offshore.
Woodside said it had yet to see any cost hit in the construction market yet given the lack of rival LNG projects proceeding in the last year and spare capacity among contractors on the hunt for new work.
12.17pm:ASX +0.3pc on results, US futures
Australia’s sharemarket has traded higher thanks to strong earnings reports and gains in US futures on stronger oil prices.
The S&P/ASX 200 was up 0.3pc at 6905.8 in early afternoon trading after an early dip to 6875.3, with S&P 500 future up 0.2pc and WTI crude oil futures up 1.8pc.
CSL rose 2.9pc, Fortescue rose 1.9pc, IRESS climbed 6.4pc and IPH was up 8.2pc after their earnings reports, while ANZ rose 3.1pc on its trading update.
Westpac gained 3.5pc, Tabcorp rose 5.5pc, Domino’s Pizza jumped 5.4pc and Treasury Wine Estates surged 14pc on broker upgrades.
[REPORT] Mid-Session: #ASX nudges higher at lunch https://t.co/WDpa8QhqW8#ausbizpic.twitter.com/dlOWzB4K19
— CommSec (@CommSec) February 18, 2021
Glenda Korporaal 12.10pm:Star plays down Bergin review fallout
The Star casino group has played down the impact of the Bergin inquiry on its future operations in New South Wales as potential rival Crown negotiates its future with the NSW Independent Liquor and Gaming Authority.
Releasing its results for the six months to the end of December, which showed a 33 per cent fall in statutory net profit to $51 million on the back of a 30 per cent fall in revenue to $741 million, Star chief executive Matt Bekier said the company would engage with the NSW casino regulator on the recommendations of the report.
The report, which found that Crown was currently unsuitable to hold a casino license in NSW, recommended the establishment of a tough new casino regulator in NSW and banning the use of junket operators to bring in high rolling VIP gamblers into Sydney casinos.
“We are looking forward to working with the regulator to understand what it (the report) means for us, especially for future VIP business,” Mr Bekier told analysts on Thursday morning.
Mr Bekier said that Star had been diversifying its source of growth in revenue from VIP gamblers away from its dependence on junket operators and more towards premium mass gamblers for the past few years.
He said the company would be stepping up its pitches to VIP gamblers in Asia through its offices in Singapore and Hong Kong once the borders were open to international tourists.
12.03pm:Citi keeps Sell on WES
Citi’s Bryan Raymond reiterates his Sell rating and $44 target price on Wesfarmers, saying there’s “significant optimism built into the share price” as it trades on 28 times FY23 earning per share estimates.
He notes that 1H21 NPAT rose 26pc year on year to $1,414 million, which was 9.5pc above consensus but 1.9pc below his estimate, with the beat versus consensus driven by Kmart Group and Bunnings.
The interim dividend of 88 cents per share was 5pc below consensus.
While Wesfarmers said its retail trading remained strong in January and February, it cautioned that sales growth is expected to moderate from March as it cycles higher sales post COVID, particularly in Bunnings and Officeworks.
WES shares were almost flat at $54.10 after initially falling 3.1pc to $52.48.
11.53am:Former RBA board member says QE extension beyond Sept likely
The Reserve Bank of Australia will likely have to extend its government bond buying program beyond September to take some steam out of the Australian dollar, John Edwards, an economist and former member of the central bank’s policy-setting board said.
Mr. Edwards told the Wall Street Journal that despite the RBA’s best efforts to lower interest rates and put downward pressure on the Australian dollar in recent months, the currency remains on track to rise to 80 U.S. cents soon, a level it hasn’t traded at in two years.
The RBA launched a 100 billion Australian dollars ($77.6 billion) quantitative easing program in November, and announced at the start of this month that bond buying would be extended by the same amount until September.
The RBA’s decision to extend QE came as other major central banks announced long-term commitments to their own bond buying programs. RBA Governor Philip Lowe has said repeatedly in recent weeks that the cost of not extending QE would be a much higher Australian dollar.
The Australian dollar has jumped by more than 10% against the U.S. dollar over the last year, but the RBA remains confident that its QE program is having an impact.
RBA Assistant Governor, Chris Kent, said Wednesday the Australian dollar would be 5.0% higher than its current level around 77 U.S. cents had it not been for RBA bond buying.
“Given that the Australian economy is recovering a little faster than the U.S., the Fed will continue with a very expansionary monetary policy stance ... my guess is that Australian dollar will continue to appreciate to 80 US cents, and maybe higher,” Mr. Edwards said.
“There’s not much the RBA can do about that,” he said. “The Australian dollar would be much stronger without the RBA policy position.”
“An extension of QE beyond September is quite likely, with the RBA having the option of reducing its target for net purchases over time. If the Australian dollar continues to appreciate, then continued bond purchases are even more likely,” Mr. Edwards said.
Strong commodity prices have helped to lift the Australian dollar in recent months. Major banks such as National Australia Bank recently forecast it would rise above 80 U.S. cents before midyear.
The RBA would like the Australian dollar to be lower to bolster the country’s competitiveness in global export markets. The level of the Australian dollar is a key factor in the transmission of monetary policy.
The RBA will need to be watchful of what other central banks are doing, Mr. Edwards said.
Dow Jones Newswires
Valerina Chagarathil11.48am:Writedowns, oil price push Santos to first loss in two years
Impairments and low oil prices hit Santos hard in the 2020 financial year, with the oil and gas producer reporting its first loss in two years and also taking a big hit to its underlying profit.
The net loss after tax of $US357m ($461m) includes the previously announced impairments, primarily due to lower oil price assumptions.
The last time Santos reported a full year after-tax loss was in 2017.
11.43am:Unemployment drops to 6.4pc from 6.6pc
Australia’s unemployment rate was slightly lower than expected in January, albeit only due to a fall in the participation rate.
93% of the 878,000 Aust jobs lost due to the pandemic have now been recovered. This has been far quicker than following previous recessions & reflects the very different nature of last years recession - due to a lockdown which ended & it saw massive upfront gov support. #auseconpic.twitter.com/tBF8MMuGZ1
— Shane Oliver (@ShaneOliverAMP) February 18, 2021
The unemployment rate fell to 6.4pc, which was slightly below the market expectation of 6.5pc and equal to the lowest rate since April 2020.
Employment rose by 29,100, which was slightly below the market expectation of 30,000 expected, but full-time jobs surged by 59,000.
The participation rate slipped to 66.1pc from a record high of 66.2pc in December.
11.39am:ANZ revenue trends best of peers: JPM
JPM’s Andrew Triggs says ANZ’s revenue trends have been the best of peers this reporting season.
ANZ’s revenue ex-Markets was 4pc above its quarterly average of 2H20 while he expected it to be 1.5pc below.
The net interest margin rose 5bps to 1.6pc (up 3bps ex-Markets balance sheet activities), supported by lower funding costs and asset repricing in Institutional.
And NIM is expected to be “slightly up” on the 1.59pc underlying reported in 2H20.
“Earnings also benefitted from a net write-back of collective provision (like Westpac but smaller), and capital was strongly ahead of our expectation giving ANZ a similar capital surplus to the other majors adjusted for market capitalisation,” Mr Triggs says.
He notes that ANZ retained a slightly cautious outlook, noting elevated volatility, and gross impaired assets were largely unchanged, with increases in Institutional and NZ, largely offset by a reduction in Australia.
“Overall, a pleasing update which should drive meaningful consensus upgrades at the revenue line,” he says.
ANZ last up 3.4pc at $26.75 after hitting a 12-month high of $26.95 in early trading.
11.26am:ASX turns up 0.2pc with US futures
Australia’s sharemarket turned up slightly along with US futures.
The S&P/ASX 200 rose 0.2pc to 6899 as S&P 500 futures added 0.2pc, but both have since faded.
The uptick came as WTI crude futures rose 1.2pc to a fresh 13-month high of $US61.86.
More than 4 million barrels a day, or a record 40pc of US crude production, is shut in by the unprecedented US cold snap.
But there are also US refinery outages and less gasoline consumption, and Saudi Arabia is reportedly planning to increase output in coming months.
Energy is the weakest sector in the Australian sharemarket today, with Woodside and Origin down more than 2pc after their results.
David Swan11.22am:Facebook to become ‘Fakebook’: Commentary
Facebook’s move to ban the sharing of news in Australia is incredibly irresponsible, particularly in the midst of a global pandemic, when the millions of Australians who use Facebook every day need to be able to access reliable and trusted health information.
The tech giant on Thursday followed through on its threats to ban news altogether in Australia, and banned users globally from reading any Australian news.
It’s an astonishing abdication of responsibility for a platform that a sizeable percentage of the Australian population who use Facebook, and rely on it for their daily news and information.
READ MORE: Only ‘news’ left on Facebook will be fake under Australia ban
11.08am:Unemployment expected to hit 10-month low: Labour force data due 11.30am
Australian labour force data for January are due at 1130am AEDT.
The unemployment rate is expected to hit a 10-month low of 6.5pc from 6.6pc in December, according to Bloomberg’s consensus estimate.
That’s based on expectations of a 30,000 rise in jobs and an assumption that the participation rate will be unchanged at a record high of 66.2pc.
“NAB sees upside risks and has pencilled in an above consensus print of 50,000 jobs and a fall in the unemployment rate to 6.4 per cent,” says Ray Attrill, Head of FX Strategy at NAB.
“Supporting the case for a strong print was the PM announcing that JobSeeker numbers fell by 100,000 in January, while the JobKeeper program may have kept some people employed who would have normally been seasonally retrenched in the holiday period.”
But apart from a slight dip in September, the participation rate has risen every month since May 2020.
Lachlan Moffet Gray 10.59am:Coonan to get $2.5m while Crown seeks new CEO
Crown Resorts has already kicked off a search for a new CEO following the resignation of Ken Barton last week after he was admonished in the Bergin report, although interim executive Chairman Helen Coonan is set to earn $2.5m a year while in charge.
But while Ms Coonan will enjoy a good income as executive chairman over the next year, major shareholder James Packer will be hurt the company’s decision to suspend its dividend for the second consecutive half amid a net loss of $120.9m.
The embattled company, of which Mr Packer owns 36.7 per cent, has a traditional policy of paying a yearly dividend of 60 cents a share, but it’s been hammered by COVID-19 lockdowns of its Melbourne, London and Perth Casinos.
In a statement to the ASX Ms Coonan said she did not plan to remain in the top job for an extended amount of time.
David Swan 10.50am:Optus mobile network suffers outage in Vic, NSW, Qld
Optus’s mobile network is suffering a widespread outage across the east coast, with customers experiencing problems across Victoria, New South Wales and Queensland.
“As a result of network technical issues, some Optus customers including residents and businesses may be experiencing intermittent disruptions to their mobile call, text and data services,” an Optus spokesman said.
“Keeping customers connected is our priority, and Optus’ technical teams are investigating this incident with remediation actions to commence as soon as possible.”
10.50am:CSL guidance implies weaker second half: JPM
JPM analyst David Low notes that while CSL delivered a very strong first half net profit 25pc the key driver was the flu division where a doubling of earnings saw revenue 60pc above his estimate.
Moreover, he notes that CSL left its full-year guidance unchanged which means the results will be heavily weighted to the first half, implying downside risk for earnings in FY22.
“The unchanged guidance implies 2H profits of $360-455m, or one fifth to one quarter of the first half result,” he says.
“This has negative implications for FY22, but we will be seeking more detail on the call.”
CSL shares were last up 2.7pc at $288.55 after hitting $295.22 in early trading.
10.39am:Origin result highlights ‘headwinds affecting the energy sector’: Moody’s
“Origin’s half-year fiscal 2021 results are at the weaker end of our expectations, and further highlight the amalgam of headwinds affecting the energy sector,” says Nicholas Chapman, Vice President, Moody’s Investors Service
Lower wholesale energy prices flowing into reduced customer tariffs due to an increasing supply of new renewable energy generation entering the market will continue to pressure margins in the company’s core Energy Markets segment. This will be offset by Origin’s focus on cost reduction and an improving contribution from its APLNG investment, driven by efficiency gains and higher oil prices that will gradually feed into higher LNG export prices.”
10.30am:Shares mixed in early trading
Australia’s sharemarket was little changed in mixed trading amid earnings reports.
The S&P/ASX 200 was down just 2.5 points at 6883 points, but that was a little better than expected based on offshore leads.
CSL surged 3.2pc on stronger-than-expected earnings, while ANZ jumped 3.4pc after its trading update pointed to increased dividends.
Westpac rose 2.1pc, Treasury Wine rose 5.5pc, Domino’s jumped 4.6pc and Tabcorp jumped 4.8pc as some analysts raised ratings and target prices after results this week.
But Coles Group dived 3pc after Jefferies and Credit Suisse downgraded after its report.
Rio Tinto fell 2.6pc after reporting late Wednesday but mostly recovered as UBS raised its target price by 10pc.
Woodside fell 3.5pc after its earnings report but Oil Search rose 2.2pc after crude oil prices surged.
Wesfarmers fell as much as 3.1pc after its report while Seven Group dipped 1.3pc.
Zip Co dived another 7pc as the pullback from an extreme rally continued.
Bendigo Bank, James Hardie, Newcrest and GPT fell ex-dividend.
Nick Evans 10.17am:Fortescue almost doubles interim dividend as iron ore rockets
Fortescue Metals Group has almost doubled the size of its interim dividend on the back of the strong iron ore price, declaring a $1.47 a share half-year payout on the back of a $US4.1bn net profit for the period as the company gave details on the extent of its problems at its Iron Bridge magnetite project.
Fortescue revenue jumped 44 per cent to $US9.34bn, with underlying earnings before interest, tax, depreciation and amortisation of $US6.64bn, up from $US4.23bn for the first half of the previous financial year.
Its dividend represents 80 per cent of net profit after the tax, the top end of its declared payout ratio.
Fortescue also flagged a $US400m blowout in the likely cost of its Iron Bridge magnetite project in the Pilbara, along with a delay of up to six months in delivering first production at the 22 million tonne a year mine and processing plant, now due by the end of 2022.
Fortescue now tips a “preliminary total investment” of $US3bn to bring Iron Bridge into production, saying was limiting ongoing work at Iron Bridge for three months while it conducted further technical studies on the giant operation.
On Tuesday Fortescue said chief operating officer Greg Lilleyman has left the company on the back of revelations about the blowout at the company’s Iron Bridge magnetite project, joining director of projects Don Hyma and the Iron Bridge project manager in exiting the miner.
Ms Gaines and chief financial officer Ian Wells will also lose their annual bonuses for the year over the blowout, in a year in which Fortescue is expected to deliver record profits.
Eli Greenblat 10.15am:Wesfarmers bulllish as profit surges
Wesfarmers believes the economic outlook for Australia remains robust as the nation recovers from the COVID-19 pandemic of 2020 and adjusts to the new realities of the health crisis, with its portfolio of businesses from office supplies to hardware likely to deliver solid shareholder returns.
Reflecting the massive uplift in online retail through the pandemic, as people did their shopping from home, Wesfarmers said its group online sales for the December half more than doubled to $2bn, spurred on too by its recent purchase of online marketplace Catch Group.
But it cautioned that sales growth for its twin retail juggernauts, Bunnings and Officeworks, would likely moderate from March as the pair begin to run up against the sales boom experienced in the same time last year when the pandemic emerged and lockdowns began.
9.55am:Origin results strong: RBC
Origin Energy results saw “strong beats across the board”, according to RBC’s Gordon Ramsay.
Underlying NPAT of $224m beat the $154m estimate by a massive 46pc.
The interim dividend of 12.5 cents a share beat the 9 cents estimate by 39pc.
Mr Ramsay notes that free cash flow of $655m represents an annualised free cash flow yield of 19pc, with the dividend equating to a 34pc dividend payout ratio versus Origin’s dividend guidance range of 30-50pc of free cash flow.
This places the dividend on an annualised yield of 4.7%. We note that Origin previously guided toward an FY21 FCF yield of >10%. Adjusted Net Debt / Adjusted Underlying EBITDA (annualised) at 2.0x is at the low end of the company 2.0 – 3.0x target range (gearing at 28%).
But while the APLNG operational performance continues to stand out and should benefit from pricing tailwinds over the remainder of FY21 and into FY22, likely leading to incremental improvements in APLNG cash distributions, the Energy Markets business faces significant headwinds from an expectation that forward electricity prices will continue to deteriorate, with NSW recently hitting as low as $35/MWh, Mr Ramsay says. He keeps a Sector Perform rating and $5.00 target price.
Eli Greenblat9.53am:CCA profit slumps with Covid disruption
Coca-Cola Amatil, currently the target of a $9.8 billion takeover bid from a European bottler, has seen its full-year profit slump by more than half as COVID-19 severely disrupted consumption patterns for its range of soft drinks and bottled water, from shut down entertainment venues to the closure of major sporting events and outdoor activities.
Cafes and restaurants as well as corner stores and eateries did not stock up on its brands such as Coca Cola or Mount Franklin water, while consumers did redirect their purchases of CC Amatil’s leading beverages to the supermarkets but this channel typically has much slimmer margins which dented group profits.
CC Amatil said the impact of COVID-19 impacted all parts of the business in 2020, however it did confirm that a recovery in its flagship operations across Australia and New Zealand towards Christmas which did help encourage Coca-Cola European Partners to improve its takeover offer launched late last year.
CC Amatil said on Thursday that net profit slumped 51.9 per cent to $179.9 million as revenue for the group fell 6.1 per cent to $4.8 billion. Volumes for its beverages were down 8.4 per cent.
This week Coca-Cola European Partners upped its takeover bid for CC Amatil to $13.50 per share, from its original offer of $12.75, with the new, higher offer winning the recommendation of an independent committee of the CC Amatil board and chief executive Alison Watkins.
CC Amatil declared a final dividend of 18 cents per share fully franked, down from 26 cents in the previous corresponding period.
9.44am:ASX may dip but earnings, dividends impress
Australia’s sharemarket may dip slightly based on offshore leads but domestic earnings and dividends continue to impress.
Overnight futures relative to fair value have the S&P/ASX 200 opening down about 0.3pc near Tuesday’s intraday low of 6865.
That follows a generally weaker night for offshore markets albeit the S&P 500 recovered to close near flat at 3931.33 points,
Energy was the strongest S&P 500 sector with a 1.5pc rise as WTI crude rose 1.8pc to a 12-month high close of $US61.14.
Estimates of US production shut in by the arctic freeze rose to a record 40pc.
But the WSJ reported that Saudi advisers said the Kingdom plans to reverse its recent 1 million barrel a day production cut in coming months.
Financials outperformed and the Tech sector fell as US 10-year bond yields hit a 12-month high of 1.331pc as US January retail sales and PPI smashed estimates.
US Industrial production, capacity utilisation business inventories and the NAHB Housing Market index beat estimates, sparking concern of overheating.
But the US 10-year bond yield closed down 4.4bps at 1.27pc and Australian 10-year yields are down 2.7bps at 1.374pc after hitting an 11-month high of 1.429pc yesterday.
Fed minutes said: “participants judged that it was likely to take some time for substantial further progress to be achieved.”
And after persistently below-target inflation, “appropriate monetary policy will likely aim to achieve inflation moderately above 2 per cent for some time.”
Focus otherwise remains on results with 18 ASX200 companies including CSL, Fortescue and Wesfarmers reporting today along with a trading update from ANZ.
Bendigo & Adelaide Bank, GPT, James Hardie and Newcrest trade ex-dividend.
Domestic employment data for February are due at 1130am AEDT.
READ MORE: Covid vaccine ‘on time’ as CSL profit soars
9.40am:Crown Resorts searching for new CEO, revenue down 62pc
Crown Resorts has already kicked off a search for a new CEO following the resignation of Ken Barton last week after he was admonished in the Bergin report, the company has said while announcing its interim results, although interim executive Chairman Helen Coonan is set to earn $2.5m per year while in the role.
“With Ken Barton stepping down from his role of CEO and Managing Director earlier this week, I assumed the role of Executive Chairman on an interim basis to provide leadership stability as we undertake a search for a new CEO and implement Crown’s ambitious reform program,” Ms Coonan said.
“I want to be clear I do not see myself as Executive Chairman for an extended tenure. We have already commenced a global search for a new CEO.”
James Packer also will miss out on a payout from his golden egg Crown Resorts for a second time in a row after the company cancelled its interim dividend amid a net loss of $120.9m.
The embattled company, which Mr Packer owns 36.7 per cent of, has a traditional policy of paying a yearly dividend of 60 cents a share - but has been badly hammered by COVID-19 lockdowns of its Melbourne and Perth Casinos.
Statutory revenue for the half fell 62.1 per cent to $581m while EBITDA fell 99 per cent to $4.4m.
$82.9m in JobKeeper subsidies have been received so far by the company.
Cliona ODowd 9.36am:Perpetual reports 43pc profit drop in first half
Perpetual remains acquisitive even after completing two major transactions in the past year, and says it is well placed to benefit from both a shift back to value investing and the ongoing ESG boom, according to its CEO and managing director Rob Adams.
But the wealth manager was hit hard with outflows from its Australian asset management business in the six months through December, driving its average assets under management in the division down 11 per cent.
Handing down Perpetual’s first-half numbers on Thursday, Mr Adams said the wealth manager was staying true-to-label and making progress in executing its growth strategy.
For the six months through December, Perpetual posted a 43 per cent plunge in net profit on the prior corresponding period, to $29.2m, due to the outflows from its Australian business and costs associated with its acquisitions of Trillium and a 75 per cent interest in Barrow Hanley.
Its underlying profit after tax, Perpetual’s preferred measure, was down 11 per cent to $52.6m as the Australian outflows and the impact of prior period distributions were partially offset by its international business and higher performance fees.
READ MORE: Perpetual eyes more takeovers
9.32am:Border closures hit Star Entertainment profit
Star Entertainment said net profit fell in its fiscal first half, hit by border closures that have made it difficult for domestic and international visitors to travel to the company’s casinos.
Star said statutory net profit was $51 million in the six months through December, down 33pc. Statutory revenue was down 30pc at $741 million.
On a normalised basis, which reflects underlying performance and strips out volatility in VIP win rates, Star’s net profit was $63 million, down 50pc, and revenue was $733 million, down 35pc. Normalised earnings before interest, tax and other items, or Ebitda, fell 27pc to $226 million.
Star didn’t declare an interim dividend. Last year, its dividend was 10.5 cents per share.
VIP turnover in the half was down 97pc given the international border closures, it said.
Looking into the fiscal second half, Star said that trading conditions were similar to the first half. All three of its properties are experiencing positive domestic demand, it said. From Jan. 1 to Feb. 14, domestic gaming revenue was 81pc of the prior period.
Dow Jones Newswires
Ben Wilmot 9.28am:Abacus lifts profit to $151.8m in bumper half
Abacus Property Group boosted first half profit by 85 per cent to $151,8m on the back of its strongly performing self-storage and office operations.
But the company’s Funds from Operations slipped 9.9 per cent to $60.6m in the half although it cited a better contribution from these areas.
After a capital raising the FFO per security was down 14.4 per cent to 9.06c while the distribution per security was 8.5c, down 10.1 per cent.
Abacus successfully deployed $205m of capital into office and self storage and sold off retail and residential properties and mortgages.
It picked up a slice in 201 Elizabeth Street, Sydney, as part of a Charter Hall-led consortium. In storage it bought $94m of properties and paid $50m for the remaining 75 per cent of the Storage King operating platform
Abacus managing director Steven Sewell said that following an active half year including an entitlement offer the company was in a position to extend its strong track record of investing into long term value enhancing assets.
The offer last December raised $402m and provided Abacus with over $900m of acquisition capacity and it has struck a deal with tycoon Lang Walker to develop a site in Melbourne’s Docklands.
Abacus expects that the distribution for fiscal 2021 will reflect a payout ratio of between 85 per cent and 95 per cent of FFO.
Lachlan Moffet Gray 9.20am:Harold Mitchell ‘needs to move on’ from Crown: ILGA chair
Harold Mitchell’s tenure as a director of Crown Resorts is all but set to end soon with the chair of the Independent Liquor and Gaming Authority, NSW’s gambling regulator, Philip Crawford saying talks are ongoing.
“I’m talking to Helen Coonan about that,” Mr Crawford told 2GB host Ben Fordham on Thursday.
“We think he needs to move on and there is an ongoing dialogue there, so I suppose watch this space, Ben.”
Mr Mitchell’s suitability was questioned in the Bergin report in the company due to a Federal Court ruling that he had committed “minor breaches” of his duties as a director of Tennis Australia.
However, it was not explicitly stated he ought to leave -as was the case with other figures like the recently departed CEO Ken Barton.
Ms Bergin instead wrote that if a civil penalty or declaration is made against him in relation to the case, he should step down.
Mr Crawford separately expressed his support for newly appointed executive chair Helen Coonan.
“I need her to stick around Ben,” he said.
“Crown’s in crisis management and I am delighted I've got someone to talk to.
“If she was gone I just don’t know who we would have to talk to and I am sure investors and a lot of people would like to make sure the company at least has an ongoing dialogue with us as they try to get through this period of crisis.”
He also reiterated that Crown could become suitable sometime this year, but expressed concern that a newly announced inquiry into the company in WA could reveal new issues that would slow this process down.
“It’ll be down the track, it will be weeks and months - it won’t be years,” Mr Crawford said.
“I really hope that (the WA inquiry) doesn’t destabilise the path we are on at the moment.
“We want to give them the opportunity to see if they can fix up their problems, if they can’t they’ll never get to suitability and the licence will go.”
Nick Evans 9.07am:South32 ups dividend, but profit slumps
South32 has declared an improved US1.4c a share dividend despite profits at the diversified miner slumping 46 per cent in the first half of the financial year.
The company declared a $US53m net profit of the half, with underlying earnings before interest and tax off 32 per cent to $US170m in the face of the pandemic’s impact on base metals markets.
Revenue for the half fell 8 per cent to $US2.94bn, compared to the first half of the previous financial year.
It will pay a US1.4c interim dividend, up from US1.1c at the same time last year, and extended its share buyback program by $US250m, after finishing 2020 with an improved cash balance despite the price slump.
South32 boss Graham Kerr said the company was poised for a strong finish to the 2021 financial year, however, as its markets improve on the back of talk of the arrival of a new commodities super cycle.
“We are off to a strong start in 2021, as we continue to build on our recent operating performance. Our net cash has increased from US$275 million on 31 December to US$452 million at the end of January, and we are now seeing a rebound in demand from markets outside of China for some of our key commodities, that is underpinning a recovery in prices. With this, our business is well placed to benefit as the global economy recovers, enabling us to deliver value for all our stakeholders,” he said.
South32 shares closed Wednesday at $2.71.
Perry Williams 9.06am:Woodside sinks to $4bn loss, search for new CEO continues
Woodside Petroleum plunged to a $4bn annual loss after a crash in oil and gas prices sparked it into a giant writedown and said it was continuing its search to find a replacement for outgoing boss Peter Coleman.
The LNG producer reported an annual net loss after tax of $US4.028bn from $US343m a year earlier while underlying net profit fell to $US447m, below market consensus of $US471m, compared with $US1.06bn last year.
The LNG producer declared a final dividend of US12c a share, making a full-year payment of US38c per share but down on last year’s 55c payout.
Woodside was stung back in July by $US4.37bn in writedowns and charges including impairments at the Chevron-operated Wheatstone LNG plant where it owns a 13 per cent stake, its Pluto LNG project and its one-sixth interest in North West Shelf LNG.
Mr Coleman is due to leave by the second half of 2021 with the company saying a process is progressing to identify his successor.
Woodside pointed to an uptick in market conditions with higher LNG pricing over the last few months.
“Our disciplined balance sheet management has safeguarded Woodside’s financial resilience and positioned us to take advantage of emerging growth opportunities as markets recover. The potential strength of that recovery is already being signalled by the recent increase in oil price and record spot LNG prices achieved in Asia over the northern hemisphere winter,” Mr Coleman said.
A final investment decision on Scarborough and the Pluto-2 expansion are due in the second half of 2021.
Jared Lynch 9.05am:CSL on track for local Covid vaccine delivery
CSL has reiterated its commitment to deliver the first batches of a locally produced Covid-19 vaccine to the Australian government in the next six weeks, and has confirmed it has almost completed clinical trials for hyperimmune therapy to treat people with serious complications from coronavirus.
CSL is producing more than 50 million doses of the AstraZeneca/Oxford University vaccine at its facilities at Broadmeadows and Parkville, with the first two million doses expected to be delivered in late March.
It comes as the company’s net profit surged 44 per cent to $US1.81bn ($2.34bn) in the six months to December 31, while revenue jumped 18.8 per cent to $US5.6bn.
Separately, the company is making “good progress” with a plasma-derived hyperimmune therapy it has developed as part of its global alliance with other plasma manufacturers. Phase three trials for the treatment are almost completed with CSL ready to step up production at its factory in Switzerland.
“If successful, this will become another viable option for hospitalised COVID-19 patients,” chief executive Paul Perreault said.
CSL is now expecting full year net profit to be between $US2.17bn and $US2.27bn. Mr Perreault said he expected Seqirus to post a loss in the second half, which was “consistent with the seasonal nature of the business” and flagged an increase in research and development spending in the second half, given its COVID-19 related projects had sidelined other projects in the past six months.
CSL will pay an interim dividend of $US1.04, unfranked and down 9 per cent on the same period last year, on April 1.
9.04am:Santos dividend beat, results in line: RBC
RBC’s Gordon Ramsay says Santos’s FY20 result was “broadly in-line”, albeit its underlying NPAT of $US287m was 2.5pc above the consensus estimate.
But the final dividend of US5 cents per share was more than twice the consensus estimate of 2 cents, with a dividend payout ratio at the top end of STO’s target range of 10-30pc of free cash flow.
2021 guidance was unchanged for production and sales volumes, but Mr Ramsay sees both hitting the top end of forecast ranges, reflecting continued Bayu-Undan output from successful infill drilling, which we see generating additional production toward the back end of 2021 for potentially a period of 12 months or more.
Santos is his preferred pick among the large cap oil and gas stocks and he keeps an Outperform rating and $7.50 target price.
“We like the defensiveness inherent in Santos’ low-cost operating model, which is free cash flow neutral at about US$28 a barrel,” he says.
“Fixed price domestic gas contracts comprise about 35pc of total sales volumes (and) Santos also offers investors a growth outlook highlighted by a low-cost oil project in Dorado and its brownfield Barossa to Darwin LNG project.
The finalisation of sell-downs at Barossa, and possibly Dorado, remain key as Santos embarks on a multi-year capital expenditure cycle.”
He says Santos remains an “attractive investment proposition” at a forecast enterprise value to debt-adjusted cash flow multiple of about 8 times.
David Ross8.52am:Beacon Lighting Group delivers glowing profit
Beacon Lighting Group (BLX) posted a strong profit on the back of a booming home renovations market, without taking a dollar of JobKeeper.
Net profit after tax jumped 132.8 per cent, up $22.2m, as Australian’s answered the question of how many new lights a nation needed in lockdown.
Gross profit was $103.6m, helped along the way by a strengthening Australian dollar.
Sales across the business increased 23.5 per cent, to $151.3m.
A fully franked dividend of 4.2c will be paid for the first half of the financial year.
Beacon will suspend its dividend reinvestment plan.
Nick Evans 8.51am:OZ Minerals profit up 30pc on higher gold volumes, stronger metal prices
OZ Minerals will pay a 17c a share dividend as the strengthening copper price helped the miner to a 30 per lift in net profits, to $213m.
The Australian copper major boosted its final dividend on the back of a strong close to the year, announcing its full year results on Thursday and saying it was well positioned to take advantage of the surging copper price.
Copper hit lows of $US4617 a tonne in April 2020, as the pandemic took hold, and was trading around decade long highs above $US8400 this week.
Strengthening copper prices in the December quarter helped boost OZ Minerals’ revenue and underlying earnings before interest and tax hit $322.9 for the full year, up from $233.5m in 2019.
Revenue rose $235m to $1.34bn, with the copper miner finishing 2020 with net cash of $32m.
OZ Minerals boss Andrew Cole said the company had met or beaten its production guidance for the sixth year in a row, saying the result positioned OZ Minerals well for its growth program.
“Our strong performance allowed continued investment in growth activities and delivery of an increased net profit after tax of $213 million ($164 million in 2019) on net revenue of $1,342 million ($1,107 million in 2019). Underlying EBITDA grew to $606 million ($462 million in 2019) and the group’s operating margin increased to 45%,” he said.
8.49am:Orora 10pc profit gain, but warns on China-Aus trade dispute pain
Packaging company Orora said its half-year net profit rose by 10% when comparing the performance of its continuing operations, but warned its earnings are being hurt by the trade dispute between Australia and China.
Orora reported a net profit of 84.6 million Australian dollars (US$65.6 million) for the six months through December, up from A$76.6 million a year earlier when the contribution from discontinued operations are stripped out. Including those discontinued operations, profit was broadly unchanged on year.
Directors of the company declared an interim dividend of 6.5 cents a share, in line with the payout a year ago.
Orora said its beverages business in Australia and neighbouring countries benefited from higher volumes of cans in the first half, although this was partly offset by more people drinking from home during the pandemic and higher energy and insurance costs.
It also warned about the impact of the China-Australia trade dispute that has seen Beijing put a punitive tariff on Australian wine imports.
“In Australasia, Orora expects second half FY 2021 earnings before interest and tax to be negatively impacted by lower wine bottle exports to China and the smaller 2020 wine vintage,” the company said.
It forecast annual Ebit in its Australasia division would be broadly in line with fiscal 2020.
JPMorgan had estimated that Orora’s Australasia division could experience a 2% fall in its fiscal first half, and a larger 6% decline in the second half, respectively. That reflects Orora’s dominant position with a 60-70% share of the local wine bottle market.
Meanwhile, Orora reported stronger first-half earnings from its North American businesses once the impact of currency swings are stripped out, benefiting from tighter cost control and better sales results.
“The impact of Covid-19 in North America was materially greater than that felt in Australasia, with many retailers remaining closed, negatively impacting Orora Visual revenue for the period,” said Chief Executive Brian Lowe.
Orora said it expects second-half Ebit in North America to be higher than a year earlier.
Dow Jones Newswires
8.36am:Roger Sharp to take Iress chair as Tony D’Aloisio steps down
Iress today announced that Iress chair Tony D’Aloisio will step down as director and chair of the Iress Board at the conclusion of the company’s Annual General Meeting on 6 May 2021. Mr D’Aloisio joined the Iress Board in 2012 and became chair in 2014.
Following an extensive search open to both internal and external candidates, Iress also announced the appointment of Roger Sharp as a non-executive director and chair-elect. Mr Sharp will commence his role as non-executive director effective today.
Iress chief executive, Andrew Walsh, said: “We are pleased to report 2020 results ahead of reinstated guidance, aided by good momentum in the fourth quarter. 2020 pro forma Segment Profit was $155.6m, 5% ahead of 2019.
The final dividend is 30c a share, franked to 40pc, bringing the full year 2020 dividend to 46c a share, franked to 38pc on an average-weighted basis.
8.31am:What’s impressing analysts today?
- Ansarada Group started at Add: Morgans Financial
- BWP Trust raised to Hold: Morningstar
- Bapcor cut to Hold: Morgans Financial
- Bapcor raised to Hold: Morningstar
- Carsales raised to Buy: target price raised 26pc to $24.50: UBS
- Challenger cut to Hold: Morningstar
- Coles Group cut to Neutral: CS
- Coles Group cut to Hold: Jefferies
- Domino’s Pizza target price raised 23pc to $122; Buy rating kept: Bell Potter
- Domino’s Pizza target price raised 35pc to $103: Neutral rating kept: UBS
- EML Payments raised to Outperform: RBC
- NextDC raised to Hold: Morningstar
- Pact Group raised to Overweight: JPM
- Pro Medicus raised to Hold: Bell Potter
- Pro Medicus cut to Hold: Morgans Financial
- Pro Medicus raised to Buy: GS
- Pro Medicus target price raised 44pc to $46; Neutral rating kept: UBS
- Rio Tinto target price raised 10pc to $126; Neutral rating kept: UBS
- Sonic Healthcare restarted at Neutral: Evans & Partners
- Tabcorp raised to Neutral: GS
- Treasury Wine raised to Buy: Jefferies
- Vicinity Centres cut to Neutral: CS
- Webjet raised to Neutral: JPM
- Westpac raised to Hold: Jefferies
- Westpac target price raised 20pc to $25.76; Buy rating kept: GS
- Westpac target price raised 9pc to $25.50: Buy rating kept: UBS
- Whitehaven raised to Buy; target price raised 19[pc to $1.90: GS
- Coles cut to Neutral: Citi
- Tabcorp raised to Buy; target price raised 21pc to $5.30: Citi
8.30am:Wesfarmers profit up 25.5pc with strong trading from Bunnings, Kmart, Officeworks
Wesfarmers reported a statutory net profit after tax (NPAT) of $1,390 million for the half-year ended 31 December 2020. NPAT from continuing operations, excluding significant items, increased 25.5 per cent to $1,414 million. A fully-franked ordinary interim dividend of $0.88 a share was declared.
Wesfarmers Managing Director Rob Scott said it was pleasing to have reported strong sales and earnings growth across the retail businesses, as well as an improvement in the performance of Industrial and Safety, during a period of continued disruption and uncertainty due to COVID-19.
“Bunnings, Kmart Group and Officeworks delivered strong trading results for the half, reflecting their ability to adapt to changing customer preferences and provide a safe environment for customers and team members. In line with Wesfarmers’ objective of delivering superior and sustainable long-term returns, the retail divisions continued to invest in building deeper customer relationships and trust by providing greater value, service and convenience for customers during a period in which many Australian households faced significant challenges and uncertainty.
“The result in Chemicals, Energy and Fertilisers (WesCEF) reflected a solid operating performance, while Industrial and Safety reported an improvement in the performance of Blackwoods.
“Pleasing progress on the Group’s data and digital agenda in recent years supported strong online sales growth and digital engagement during the half. Total online sales across the Group more than doubled for the half, excluding Catch. Including the Catch marketplace, online sales of $2.0 billion were recorded for the half.
“Good progress to accelerate the growth of Kmart and address the performance in Target continued during the half and, on a combined basis, Kmart and Target delivered a record earnings result for the period. Sales and transaction volume uplifts from Target stores that have been converted to Kmart stores continue to be very encouraging, and 19 stores were converted during the half. Target’s profitability improved significantly, supported by strong demand and the ongoing simplification of the business.
“The Group maintained its commitment to sustainable long-term value creation during the half. Across the Group, Scope 1 and 2 emissions reduced by eight per cent. Wesfarmers also employed approximately 9,500 more team members at the end of December 2020 compared with the prior corresponding period, reflecting continued investment in customer service and digital capabilities across the Group, as well as increased levels of activity in the retail businesses. Aboriginal and Torres Strait Islander team member numbers increased by 800, continuing the Group’s progress towards achieving employment parity of three per cent by 2022.”
Operating cash flows increased 4.0 per cent for the half to $2,216 million, supported by strong divisional earnings growth, which was partially offset by the ongoing normalisation in working capital positions in the retail businesses following the abnormal balances recorded at the end of the 2020 financial year, as well as the timing of tax payments.
Wesfarmers has maintained a strong balance sheet as a result of the solid cash flow performance and the actions taken in the 2020 financial year in response to the uncertainty associated with COVID-19. The Group reported a net cash position of $871 million at the end of the half.
Perry Williams 8.21am:Origin Energy first half profit plummets 98pc
Origin Energy saw its first half net profit plummet by 98 per cent as a solar-sparked rout in power prices and subdued economy from COVID-19 hammered the bottom line.
The electricity and gas giant said statutory profit for the six month period plunged 98 per cent to $13m from $599m a year ago while underlying earnings fell 57 per cent to $224m ahead of consensus of $160m.
Underlying earnings before interest, tax, depreciation and amortisation declined 27 per cent to $1.154bn while it trimmed its debt pile by $460m to $4.7bn.
The board lowered its dividend to 12.5c per share, down 16 per cent on last year’s 15c interim payout.
Origin blamed subdued economic conditions and lower commodity prices due to the COVID-19 pandemic with the producer also taking a hit from mild summer weather, continued growth in renewables and regulatory uncertainty.
“Throughout the first half, Origin continued to navigate the very challenging operating conditions facing the sector, as the pandemic caused a reduction in energy demand and depressed prices across key commodities,” Origin chief executive Frank Calabria said.
““The recent rally in oil and gas markets is expected to have a positive impact on Australia Pacific LNG’s earnings in the second half, given the lag in contract LNG prices. However, as flagged in our recent earnings update, the near-term outlook for Energy Markets is more challenging.”
The Sydney-based company had already lowered its full year guidance on February 4, citing subdued energy demand due to the impacts of COVID-19 and a mild summer season and higher gas costs amid a jump in Asian LNG prices.
The energy company expects its energy market full year EBITDA to be in the range of $1-1.14bn, compared to previous guidance of $1.150-$1.3bn, a downgrade of 8.6 per cent.
Average electricity spot prices have halved from a year ago to between $40 to $45 a megawatt hour range in most states as a flood of cheap renewables lowered daytime prices along with cheaper gas and coal and softer demand amid COVID-19.
Power prices averaged $44/MWh across most states in the December quarter, 38 per cent less than the same quarter in 2019 and the lowest December quarter wholesale price since 2014 with only NSW bucking the trend.
Electricity futures point to subdued conditions extending through this year and into 2022 with prices in the early $50MwH range, signalling a tough period ahead for the nation‘s big utilities including AGL and Origin.
Lachlan Moffet Gray 8.19am:Seven Group bumps up dividend, commits divisions to net zero
Kerry Stokes’ Seven Group has committed its Coates and WesTrac divisions to a net zero by 2040 policy as part of the group’s “proud history” of the company’s social corporate responsibility.
It comes as the group boosted its dividend by 10 per cent despite failing to grow its profit, flagging a benefit from government stimulus to the group’s industrial services holdings.
Trading revenue of $2.4bn was up 4 per cent on the prior comparable period, but net profit fell 3 per cent to $247m.
The group’s interim dividend was lifted by 10 per cent to 23c a share.
Managing director and CEO Ryan Stokes said that although outcomes were mixed across divisions, outlook was strong.
“Our Industrial Services portfolio is benefiting from accelerating mining production and economic stimulus measures to generate building and infrastructure activity,” he said.
“While our Energy portfolio was impacted by lower realised oil prices during the half, Beach has remained active with drilling success at Enterprise-1, FID taken on Waitsia Stage 2 and new asset acquisitions to consolidate its East Coast gas position.
“Confidence in the outlook within our key sectors, has allowed us to increase the interim dividend by 10pc to 23c per share.”
The company said WesTrac was on track to achieve high single digit EBIT growth for the full year, while Coates is expected to deliver low single digit EBIT growth.
READ MORE: Seven Group wins from infrastructure, media growth
8.14am:Santos makes $US357m annual loss
Santos made an annual net loss of $US357m as it felt the sting of low crude-oil prices and asset impairments, most recently against resources in Papua New Guinea and Western Australia.
Santos said the annual loss for the 12 months through December compared to a $US674 million profit a year earlier. Underlying profit, which excludes impairments, fell by 60pc to $US287 million.
Directors of the company declared a final dividend of 5.0 US cents a share, in line with a year earlier. That brought the full-year payout to 7.1 US cents a share, representing 20pc of free cash flow and in line with the company’s dividend policy.
Santos responded to the rout of the oil price and impact of the coronavirus pandemic by absorbing $U$756 million in asset-impairment charges midway through its fiscal year, mostly against its GLNG project that turns coal seam gas into liquefied natural gas for export. Last week, Santos said it also expected a $US98 million impairment of goodwill after reclassifying some reserves in Papua New Guinea and at the Reindeer gas field offshore Western Australia.
Still, Santos has benefited from an 18pc increase in production after completing a deal to acquire a basket of assets from ConocoPhillips. Those assets included the U.S. company’s operations in northern Australia and East Timor, including a controlling stake in the Darwin LNG gas-export project in which Santos already is a partner.
Santos produced 89 million barrels of oil equivalent last year, supported by production of 25.4 million barrels in the final quarter of the year. Sales revenue totalled US$3.39 billion after the company’s sales volumes reached 107.1 million BOE.
“The improvements in our base business in recent years were perfectly illustrated in 2020 with an average realised oil price of $U$47 per barrel generating more than three times the free cash flow as generated in 2016 at a similar average oil price,” said Chief Executive Kevin Gallagher.
Dow Jones Newswires
8.14am:ANZ cash profit up 54pc
ANZ says its first quarter unaudited cash profit has jumped 54 per cent to $1.81bn.
In a trading update, it said the rise in cash profit was based on an average of the last two quarters of 2020.
It said unaudited statutory profit after tax for the first quarter was $1.62bn.
ANZ Chief Executive Shayne Elliott said: “This is a strong performance in volatile trading conditions that again highlights the benefits of disciplined execution of our strategy as well as maintaining a simpler and well balanced portfolio of businesses.
“All our major businesses performed well through the quarter with market share gains in our key home loan market in Australia as well as record home loan volumes in New Zealand.
“Our diversified portfolio in Institutional delivered again for shareholders with a strong contribution from our international network.
“Markets had another solid quarter although revenue was down relative to the historic highs we experienced at the end of last year.
“Margins were up across the group due to higher volume growth in targeted segments and a disciplined and active approach to risk and pricing.”
8.06am:US stocks finish mixed as tech shares fall
Wall Street finished mixed as investors retreated from shares of many of the technology companies that have powered markets higher this year.
The Nasdaq Composite tumbled 0.6pc, dragged down by technology heavy hitters including Apple and Netflix. The S&P 500 ended little changed.
The Dow Jones Industrial Average, meanwhile, gained 0.3pc to post its ninth record close of this year. Earlier in the day, the blue-chip index lost as many as 184 points before reversing course and turning positive.
The US stock market’s recent rally has showed signs of cooling this week, even as investors point to reasons for optimism ahead. Investors say they are keeping a close watch on the possibility for more fiscal stimulus out of Washington, as well as the potential for a speedier Covid-19 vaccine rollout.
Fresh economic data has also shown encouraging signs that the U.S. economy is improving. On Wednesday, the latest retail sales report revealed that U.S. shoppers sharply increased their spending in January after three months of decline during the holidays.
Still, those signs of progress weren’t enough to assuage investors Wednesday, who remain concerned about lofty stock valuations. Rising inflation expectations also have recently weighed on investors, too, as many begin to price in the consequences of more stimulus and spending.
“We’re in the early stages of a business and market cycle, and so the worry is whether it’s getting too hot too quickly and whether the [Federal Reserve] will make a move,” said Brian Levitt, global market strategist at Invesco. “I think it’s incredibly premature.”
Investors have been keeping close watch of the yield on the 10-year US Treasury note, which has continued to drift higher after starting the year below 1pc. The yield on the benchmark note was 1.297pc Wednesday, down from 1.298pc Tuesday. Earlier in the day, yields had risen as high as 1.331pc.
Even with Wednesday’s intraday drop, yields remain significantly higher than they were just a few session ago, which may be causing some investors to reassess their appetite for more risky investments, said Derek Halpenny, head of market research at MUFG Bank. Low bond yields had helped fuel interest in equity markets in recent months, he said.
The climb in yields “has gone a bit further than what the market was expecting,” Mr. Halpenny said. “You get to a level where the relative risk-reward becomes slightly less attractive for equities than what you were anticipating, and that can lead to some pause and some repositioning.”
Still, some investors say they remain optimistic that stocks will continue to outperform this year, especially amid expectations that monetary policy will likely continue supporting the economy and markets. Last week, Chairman Jerome Powell said that the Fed is unlikely to “even think about withdrawing policy support” by raising rates or reducing bond purchases in the foreseeable future.
Among individual stocks, Verizon Communications rose 5.3pc to post the largest gain of the Dow’s components, followed by Chevron, which gained 3pc. Both stocks surged after Warren Buffett’s Berkshire Hathaway said it had bought large stakes in both companies.
Meanwhile, Apple and Netflix were among the technology companies to post losses. Apple lost 1.8pc, while Netflix slid 1.1pc. Facebook also fell, losing 0.3pc.
Dow Jones. Newswires
8.05am:SkyCity Entertainment appoints CFO
Julie Amey has been appointed chief financial officer joining SkyCity Entertainment from Shell, Australia.
Amey will be commencing with SkyCity on 1 May 2021.
Amey will be replacing Mr Rob Hamilton who resigned from SkyCity late last year and who will be departing the business on 26 February 2021.
7.55am:Coronavirus tests windfall boosts Sonic Healthcare profit
Sonic Healthcare reported a more than doubling in half-year net profit, as the windfall from providing coronavirus tests more than offset a decline in other revenues.
Sonic reported a net profit of $677.6m for the six months through December, compared to $254.4m a year earlier. Directors of the company declared an interim dividend of 36c a share, up 6pc on a payout of 34c a year earlier.
Sonic said it has completed more than 18 million tests for Covid-19 since the pandemic began at 60 laboratories globally, and this had given revenue and earnings a significant boost in its fiscal first half.
In contrast, Sonic said revenue from its other businesses fell by 1pc compared with a year earlier after stripping out the impact of currency swings. It said that it was feeling much less disruption to its activities outside of providing Covid tests than in the early months of the pandemic.
Sonic said it expects a strong second-half result based on the revenue growth in January and February so far, but shied away from providing annual earnings guidance due to the uncertainty created by the pandemic.
“The pandemic has the potential to cause fluctuations in both the base business and Covid-19 testing revenues, although the base business is becoming increasingly resilient to the impacts of pandemic waves,” Sonic said.
Dow Jones Newswires
7.30am:Encouraging results for Mesoblast
Mesoblast Ltd. said a published paper on the first two children treated with remestemcel-L--its mesenchymal stromal cell product candidate for multisystem inflammatory syndrome associated with Covid-19--shows positive results.
The Australian company said the paper was based on two children who were admitted to the Medical University of South Carolina’s MUSC Shawn Jenkins Children’s Hospital, and were the first to be treated with remestemcel-L for MIS-C, which is associated with prior rather than active Covid-19 infection.
The two patients detailed in the paper were previously exposed to Covid-19 infection and later developed MIS-C, the company said. Despite receiving standard of care for MIS-C, they continued to display severe heart failure and significantly elevated inflammatory biomarkers.
When treated with two intravenous doses of remestemcel-L separated by 48 hours, normalisation of left ventricular ejection fraction, notable reductions in biomarkers of systemic and cardiac inflammation, and improved clinical status occurred. There were no safety signals associated with the remestemcel-L treatment. Both patients were subsequently discharged from hospital, the company said.
Dow Jones Newswires
7.09am:ASX to open lower as Wall Street wobbles
Australian stocks are poised to open lower as Wall Street mostly slipped following a strong global rally.
At about 7am (AEDT) the SPI futures index was down 19 points, or 0.3 per cent.
Yesterday, the ASX 200 booked its first fall in three days.
The Australian dollar is lower at US77.47c.
In commodity markets, Brent crude, the international benchmark for energy markets, rose about 1.6 per cent. Gold prices fell 1.5pc.
Iron ore rose 1.8 per cent.
7.00am:Auckland Airport’s earnings slide
Auckland International Airport’s first-half earnings plummeted as the coronavirus pandemic froze international travel.
New Zealand’s main international gateway reported a net profit of $NZ28.1 million for July-December, down 81pc from a year earlier.
The company said its recovery hinges on two-way quarantine-free travel with Australia being implemented.
Dow Jones Newswires
6.30am:Facebook to restrict Australia news sharing
Facebook said it would restrict news content sharing in Australia, refusing to bend to a regulatory push that would force the social giant to share revenue with media outlets.
Australia is poised to adopt legislation that would force digital companies to pay for news content, something that would create a global precedent and, according to Facebook and Google, wreck the way the internet works.
“The proposed law fundamentally misunderstands the relationship between our platform and publishers who use it to share news content,” said Facebook’s manager for Australia and New Zealand, William Easton.
“It has left us facing a stark choice: attempt to comply with a law that ignores the realities of this relationship, or stop allowing news content on our services in Australia. With a heavy heart, we are choosing the latter.”
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 regulatory push.
AFP
6.20am:Fed saw easy-money policies remaining in place
Federal Reserve officials broadly agreed at their most recent policy meeting that very low interest rates and continued bond purchases will be necessary for the foreseeable future to aid the U.S. labour market’s recovery.
Minutes of the Fed’s Jan. 26-27 meeting, released Wednesday, showed policy makers expected that the federal stimulus package approved in December and progress toward widespread vaccination against Covid-19 would improve the outlook for the economy. While some officials believed inflation could pick up in coming months, they were sceptical that price pressures would be persistent enough to prompt tighter monetary policy.
Fed officials agreed at the meeting to hold interest rates near zero. They also elected to continue increasing the Fed’s holdings of Treasury bonds and mortgage-backed securities by at least $US80 billion and $US40 billion, respectively, a month.
The Fed’s policy statement released after the meeting noted that the recovery of the economy and labour market had softened amid a resurgence in Covid-19 cases. But Chairman Jerome Powell, at a news conference after the meeting, also pointed out that the economy had proven more resilient than expected, in part due to repeated injections of federal aid. The latest round, a $US900 package signed into law in December, appeared to bolster policy makers’ hopes for the recovery.
Dow Jones
6.10am:Saudi Arabia set to raise oil output
Saudi Arabia plans to increase its oil output in the coming months, reversing a recent big production cut, say advisers to the Kingdom, a sign of growing confidence over an oil-price recovery.
The world’s largest oil exporter surprised oil markets last month when it said it would unilaterally slash one million barrels a day of crude production in February and March in an effort to raise prices.
But the Kingdom plans to announce a reversal of those cuts when a coalition of oil producers meet next month, the advisers said, in light of the recent recovery in prices. The output rise won’t kick in until April, given the Saudis already have committed to stick to cuts through March.
The advisers cautioned the plans still could be reversed if circumstances change, and the Saudis’ intention hasn’t yet been communicated to the Organization of the Petroleum Exporting Countries, said the people and OPEC delegates.
Dow Jones
5.30am:Wall Street mixed after rally
US stocks mostly fell as investors weighed signs of an improving economy against concerns about lofty stock valuations and rising inflation expectations.
In early afternoon trade the Dow Jones Industrial Average was up 0.1 per cent, after slipping into negative territory in early trade. The S&P 500 lost 0.3 per cent, while the Nasdaq Composite tumbled 0.9 per cent.
Stocks have been muted in recent days after a rally that saw the major indexes notch record highs.
Fresh data showed that US retail sales climbed more than expected in January, driven in part by the latest round of stimulus checks and declining COVID-19 infection numbers. That marked a turnaround from three consecutive months of declining sales during the 2020 holiday shopping season.
A rise in government-bond yields has caused some investors to reassess their appetite for more risky investments, particularly given the high valuations for many stocks, said Derek Halpenny, head of market research at MUFG Bank. Low bond yields had helped fuel interest in equity markets in recent months, he said.
The yield on the 10-year Treasury note fell to 1.287pc from 1.298pc on Tuesday.
The climb in yields “has gone a bit further than what the market was expecting,” Mr. Halpenny said. “You get to a level where the relative risk-reward becomes slightly less attractive for equities than what you were anticipating, and that can lead to some pause and some repositioning.”
Some investors say they remain optimistic. Money managers are focused on fresh stimulus from President Biden’s administration and measures to contain the coronavirus pandemic.
“The vaccine rollout is picking up pace, Covid cases are going down, and at the same time, you have the administration going full throttle toward a massive relief package that will come very close to President Biden’s $US1.9 trillion figure,” said David Donabedian, chief investment officer at CIBC Private Wealth Management.
Verizon Communications rose 3pc and Chevron gained 2.6pc after Warren Buffett’s Berkshire Hathaway said it had bought large stakes in both companies.
In commodity markets, Brent crude, the international benchmark for energy markets, rose about 0.2pc. Gold prices fell 0.9pc.
Overseas, the pan-continental Stoxx Europe 600 edged down 0.6pc.
Dow Jones
5.25am:Stocks slip, bitcoin extends record run
Global stock markets mostly fell on profit-taking after a strong global rally, with investors worried valuations may have gone too high and about interest rates.
The Dow slid off of a record close on Tuesday, and the S&P 500 and Nasdaq Composite also moved lower after dipping on Tuesday.
European stocks finished lower, with losses posted across most of Asia. London fell 0.6 per cent, Frankfurt lost 1.1 per cent and Paris shed 0.4 per cent.
Oil prices rose, holding near 13-month highs. Lifted in recent months by OPEC production cuts, there has been added support this week from a big freeze in Texas that has hammered output in the key US production state.
Bitcoin hit another record, at $US51,719.10, having broken $US50,000 for the first time on Tuesday.
Analysts said there was room for a drop in equities, but the general view is that they will resume their strong upward march as Covid vaccine rollouts, slowing infection rates and the easing of lockdowns allow economies to return to normal.
The focus was firmly on Washington, where US lawmakers ponder the next move on President Joe Biden’s $US1.9-trillion stimulus package, the prospect of which has been a key driver of a months-long surge in global equities.
Bets that the vast spending splurge will hand an extra boost to the world’s top economy -- and the prospect of business reopenings -- have also fired inflation expectations, sending US Treasury yields close to one-year highs this week.
That has led to concerns about rising borrowing costs, which market-watchers fear could undercut the recovery and hit consumer spending.
“The move up in yields has been driven by increasing inflationary concerns amid a rise in energy prices along with the prospect of a big US fiscal stimulus and the global recovery entering a more solid stage,” said National Australia Bank’s Rodrigo Catril.
AFP
5.15am:News Corp in content deal with Google
News Corp said it has struck a deal with Google under which the search giant will pay it for content, an agreement that comes as lawmakers in Australia consider having technology companies and publishers negotiate over payments.
News Corp said the three-year deal also covers the development of a subscription platform, advertising-revenue sharing via Google’s ad technology services, and efforts related to audio and video journalism.
The media company said the deal calls for a range of its publications in the US, the UK and Australia to be featured in the Google News Showcase.
4.58am:Hedge fund buys Tribune Publishing newspaper group
The publisher of the Chicago Tribune, New York Daily News and other regional newspapers has struck a deal to be sold to a hedge fund with a reputation for aggressive cost-cutting at its media outlets.
Alden Global Capital said it would pay $US650 million to acquire the shares it does not already own in Tribune Publishing, according to a joint statement late Tuesday on the latest deal consolidating the struggling US newspaper sector.
As part of the agreement, the companies agreed to spin off the Baltimore Sun to a non-profit group formed this year called Sunlight for All Institute, which will operate the daily and its affiliates in Maryland.
4.55am:BP unveils employee share award plan
Britain’s loss-making energy major BP has unveiled plans to hand all employees a stake in the company, which is seeking to revive its fortunes after a virus-ravaged 2020.
Chief Executive Bernard Looney, who is overseeing a transition away from crude oil and toward greener energy, revealed the share award scheme in a memo issued last week.
“Whether you are a barista in New Zealand, a drilling engineer in Azerbaijan, a pump clerk in South Africa or an analyst in India -- over 60,000 people in 66 different countries will receive a share in BP’s future,” wrote Looney in the memo obtained by AFP.
“Why? Because ultimately -- you are the people who will make our strategy work -- and we want you to have the chance to benefit from all of your work.”
Under the plan, which is the first of its kind in BP’s history, all staff will be entitled to a one-off payment of shares or options to purchase the stock at a later date.
The news comes after BP revealed earlier this month that it plunged into a huge $US20.3-billion (16.8-billion- euro) net loss last year as coronavirus ravaged global energy demand.
BP also launched plans last year to axe about 10,000 jobs or 15 per cent of its global workforce under a cost-cutting drive that ends in 2021, and embarked upon major asset disposals after the COVID-19 pandemic sparked huge asset writedowns.
AFP
4.50am:US retail sales jump 5.3pc
US shoppers resumed spending in January, as retail sales spiked 5.3 per cent, the first increase since September, according to government data.
The gain, far more than analysts had expected, was driven by increases in numerous categories, including furniture, electronics and sporting goods, the Commerce Department said.
Even excluding gasoline and vehicles, which were expected to juice the data, sales were up 6.1 per cent.
AFP
4.48am:Ford launches $US1bn drive to go electric in Europe
US auto giant Ford said it was investing one billion dollars in Germany in a bid to make all of its passenger vehicles sold in Europe electric by 2030.
The company said in a statement that “by mid-2026, 100 per cent of Ford’s passenger vehicle range in Europe will be zero-emissions capable, all-electric or plug-in hybrid, and will be completely all-electric by 2030”.
It said it would upgrade its assembly plant in Cologne, the home of Ford Europe, with a $US1-billion (830-million-euro) investment to advance the company’s “all-electric future”.
Ford said its first European-built all-electric passenger vehicle for European customers would be produced at the facility from 2023.
The following year, its entire commercial vehicle range is to be zero-emissions capable, all-electric or plug-in hybrid, with two-thirds of Ford’s commercial vehicle sales expected to be all-electric or plug-in hybrid by 2030.
AFP
4.43am:Maersk to launch first carbon neutral ship
Danish shipping giant AP Moller-Maersk announced it would launch the “world’s first carbon neutral” vessel by 2023, seven years ahead of its initial target.
Originally scheduled for 2030, the company said in a statement that the launch had been “fast-tracked by advances in technology and increasing customer demand for sustainable supply chains.” The ship will run on bio-methanol and will be deployed in one of Maersk’s “intra-regional networks.”
Maersk also noted that around half of its 200 largest customers have already set, or are in the process of setting, “ambitious science-based or zero carbon targets for their supply chains, and the figure is on the rise.” The shipping giant previously operated a massive oil division, but sold it to France’s Total in 2017 and aims to go completely carbon neutral by 2050.
AFP
4.40am:Ryanair loses state aid lawsuit in EU court
Irish low-cost airline Ryanair has lost its attempt in an EU court to block massive public bailouts of rival companies such as Air France and SAS, a statement said.
“This aid scheme is appropriate to remedy the economic damage caused by the COVID-19 pandemic and does not constitute discrimination,” the EU General court, based in Luxembourg, said in a statement, in reference to the Air France case.
Ryanair has pursued a legal campaign across Europe to stop bailout deals for the bloc’s legacy airlines, arguing the state aid gives them an unfair advantage.
Ryanair said it would appeal the ruling.
AFP
ASX 200 falls on China update; BHP leads mining reversal
Iron ore, copper futures, AUD down after China's underwhelming economic update. RBA's 'step down' in hawkishness evident in September minutes, but deputy governor Andrew Hauser says inflation job's not done yet.
ASX 200 rises on banks; Arcadium top gainer
Rio Tinto's takeover approach lifts Arcadium Lithium appeal. West African Resources drops on Burkina Faso mining concerns. Qantas may avoid second strike after proxy backing.