ASX pulls back as US-China tensions rattle risk sentiment
Shares clawed back ground through the day but closed at session lows as banks pulled back from their recent rally.
- Markets break to new recovery highs: Oliver
- JobKeeper not our only support option: PM
- Don’t chase the banks: Macq
- PAS Group sinks into administration
That’s all from the Trading Day blog for Friday, May 29. The ASX trimmed its weekly gain to 4.7pc as shares finished Friday’s session down 1.6pc.
It comes amid rising tensions between the US and China, which sent Wall Street lower overnight. The Dow ended down 0.6 per cent, the S&P 500 fell 0.2 per cent and the Nasdaq shed 0.5 per cent.
In local news, Brookfield rejoined the bidding for Virgin, while Fortescue lost a High Court appeal in regards to a native title judgment.
John Durie 8.43pm: Turning off the fiscal tap
When the government turned on the fiscal tap to support the economy through the COVID-19 crisis, the hard part was always going to be turning it off. Already a conga line has formed, demanding the tap stays on.
The surprise leader of the push is Reserve Bank boss Philip Lowe, who worries about an effective fiscal tightening at the end of September, when the JobSeeker increases and JobKeeper payments stop. The government will provide some support going forward and won’t let the economy simply fall off a cliff.
The hard part is defining which part of the economy really needs help, which is a tricky political issue because the last thing the government wants to do is hand over wages subsidy to a foreign-owned company paying minimal tax.
The list of those that really need support will readily grow and at some point Treasurer Josh Frydenberg will have to say no.
He also needs to set a defined period for the largesse, or face the danger of creating a culture of dependency which will destroy any hope of an entrepreneurial economy the government will want to restore.
Max Maddison 8.25pm: Restaurants to welcome 100
The Berejiklian government will loosen capacity restrictions for restaurants from Monday, opening the door for larger venues to have more than 100 people across different dining spaces.
While the government had previously announced restaurants, pubs and cafes would be allowed 50 patrons per venue, industry documents exclusively obtained by The Weekend Australian reveal that restaurants will be able to accommodate 50 patrons “in an existing seated dining area”.
It is understood this means restaurants will be able to seat 50 people in an inside dining venue, an additional 50 in an outside space, and more in a private dining room — as long they ensure social distancing regulations, or one customer per four square metres.
8.02pm: Huge gains for bank stocks
A week of massive volatility in Australian banks has left the sector with huge gains after bullish reports from analysts triggered a wave of bargain-hunting from value-hungry investors.
Even after falling 4.5 per cent on Friday, the S&P/ASX 200 Banks index rose 13 per cent for the week. Three of the four majors recorded their biggest weekly share price gains on record.
However, on Friday Westpac dived 6.4 per cent to $17.22 a share, NAB fell 5.2 per cent to $17.81, ANZ lost 4.5 per cent to $17.89 and Commonwealth Bank fell 3 per cent to $63.75 as Macquarie’s Victor German said the residual value in the sector was “no longer large enough to chase the banks from here”.
Portfolio rebalancing also hit the market in the closing match, magnifying the pullback in banks. The overall market had surged relative to bonds this month, leading balanced funds to sell.
But that didn’t stop the banks recording huge gains for the week.
Westpac added 15 per cent, ANZ rose 18 per cent and NAB added 16 per cent this week — their biggest weekly gains ever — while CBA rose 8.6 per cent, its best week since 2011.
7.17pm: Coronavirus will change the world
Boardrooms and newspaper columns are full of speculation about how different the world will look once COVID-19 is defeated. Investors are placing bets based on long-term winners and losers.
But the uncertainty around what will count as normal runs deep on every question, while history suggests judgments at the time of major events are frequently wrong. I’ve been thinking about five of the major shifts that could take place — and why they might not. I don’t have the answers — thus the uncertainty — but laying them out is a way to be prepared when the shifts happen.
The Wall Street Journal
Richard Gluyas 6.50pm: Bendigo Bank contract ‘unfair’
A court declaration that six small business contracts used by Bendigo and Adelaide Bank were unfair has implications for the insurance industry, which becomes subject to the same law banning unfair terms in April next year.
The Federal Court agreed with the Australian Securities & Investments Commission on Friday that several terms in the bank’s standard-form business loan contracts were unfair.
The ruling applies to thousands of Bendigo’s business customers, because judge Jacqueline Gleeson ruled that the same terms in Bendigo’s other standard-form small business contracts were also unfair.
ASIC commissioner Sean Hughes said the regulator was committed to protecting small business owners from unfair terms in loan contracts, particularly when they were confronted with inflexible standard terms.
“Importantly, insurance firms should be preparing to extend these obligations to insurance contracts,” Mr Hughes said.
Like consumers, small businesses are often offered contracts for financial products on a “take it leave it” basis, entering into contracts where they have limited or no opportunity to negotiate the terms.
Legislation banning unfair contract terms was introduced in November 2016.
Helen Trinca 6.25pm: Company-states rule the world
Billionaire venture capitalist Peter Thiel is an iconoclastic figure best known in recent years for demolishing the Gawker website.
Less well known, in this country at least, is his passion for setting up seasteads — permanent ocean dwellings that would be, in effect, new countries.
He’s among other rich Silicon Valley types who have promoted the radical idea of setting up territories outside the reach of government. In recent years, seasteading — an amalgam of sea and homesteading — has captured the attention of some keen to create their own precincts of corporate sovereignty. An associated movement advocates charter cities, free to set their own rules.
As academics Andrew Phillips and JC Sharman write in their new book, Outsourcing Empire, “the seasteading movement constitutes one of the most radical attempts to revive a form of corporate sovereignty within the international system”.
Thiel and co see these floating cities as a way to escape the “predation and corruption of national government”. They are designed to nourish entrepreneurs and guarantee personal freedom better than existing governments.
A very different version of corporate sovereignty is described in Phillips and Sharman’s book, a comparative history of the 19th-century company-states such as the English and Dutch East India companies and the Hudson’s Bay Company. From the 17th to the 20th century, the company-states, rather than sovereign states, drove European expansion. But unlike the seasteads, they worked hand in glove with governments rather than challenging them.
Robert Gottliebsen 6.02pm: Key moments of market volatility
Most investors and chief executives periodically face moments of truth. And the decisions they make in those key moments can have a big bearing on their future.
Today, I want to describe the dilemma of a boutique investment manager who sold his equities near the peak, but is now watching the prices return to levels close to where he sold. Does he buy back?
And then there are the moments of truth that faced home goods retail chief executives - Nick Scali’s Anthony Scali, Adairs’ Mark Ronan and Harvey Norman’s duo Katie Page and Gerry Harvey - around the end of March. The last week of March was one of the worst in the pandemic and the outlook was uncertain at best and bleak at worst.
Mark Ronan and Anthony Scali both made the same decision: shut all or most of their stores and rely on online trading. Katie Page and Gerry Harvey cancelled their dividend and reduced executive pay, but did not close their stores.
What none of the CEOs knew was that in just over two weeks, Australians still earning income would start an unprecedented boom in the demand for household and home improvement goods.
As Harvey Norman saw sales starting to rise at a time when important rivals were shut, they pressed the accelerator and embarked on a major advertising campaign which yielded great results. Bunnings and JB Hi-Fi/Good Guys were also big winners and the good times are still going.
Scali and Adairs have now reopened most of their stores and will fully participate in what is left of the boom, but in that “moment of truth” last March, they made the wrong call.
Back in January, Damien Klassen of Nucleus Wealth believed the market was far too high and he sold most of the funds’ equities.
He then watched the market fall sharply and was seen as a hero among fund managers. But now Klassen faces another “moment of truth” because the market has recovered to levels not that far away from where he sold.
Is the crisis over and should he buy back? There are a lot of other investors with the same dilemma, including many who sold out near the market low points.
Ticky Fullerton 5.37pm: Austal sails through pandemic
As a major employer in large shipyards at Henderson in Western Australia and Mobile Alabama, Austal chief executive David Singleton has had to deal with quite different COVID-19 environments.
His approach has been the same. “You know things go wrong every day in manufacturing and we’re used to being able to manage in that environment. COVID-19, while being new and different has just been another set of issues for us to manage,” he tells The Australian.
Austal is one of the largest industrial employers in Alabama with about 3800 on the payroll. A further 1200 employees are at Henderson with another 400 to join over the next three years to work on the six new cape class patrol vessels for the Commonwealth.
As an engineer, Singleton says he’s particularly proud of the number of jobs the global shipbuilder has managed to create and maintain through the pandemic including in places like Singapore and the Vietnam.
“We have not only managed to keep people safe in all our shipyards around the world including in Asia and the US, but we have also been able to keep them all employed. I am very conscious that a lot of people that work for us absolutely need that pay-check that comes in every month. We have a responsibility to try to make that continue as far as we possibly can.”
James Kirby 5.07pm: Win for retail investors
Call it Mum and Dad’s big break: the sharemarket is on a remarkable recovery and investors who held the course and never surrendered in the darkest days two months ago are being rewarded.
But the rebound towards 6000 points on the ASX 200 is only half the story — the cream on the cake has been the bonanza in capital raisings launched at the bottom of the market cycle that are now paying handsome profits for retail shareholders.
In mid-March during the grimmest days of this pandemic, listed companies rushed to raise money.
4.38pm: Markets break to new recovery highs: AMP
While the ASX may have finished lower for Friday’s session, AMP Capital chief economist Shane Oliver noted the break higher to new recovery highs across global markets.
US shares are up 35 per cent from their March low, while the ASX is now up around 26 per cent.
“The drivers remain a combination of falling new coronavirus cases in developed countries, positive news on the medical front regarding the virus, reopenings, stimulus measures, green shoots of recovery and investors being pessimistic and underweight – meaning that there are more who can be forced to buy shares than sell them,” Dr Oliver said.
“Many share markets are very overbought but that is quite common coming off major share market lows and is often a good sign.”
Here’s the biggest movers at the close:
4.15pm: Shares close at daily lows
Shares may have pulled back on Friday but the week’s early strength still set the benchmark up for a weekly gain of more than 4.5 per cent – its fifth consecutive weekly improvement.
Escalation of tensions between the US and China sent the local benchmark down early and despite clawing back ground through the session the index closed near its lows, down 95 points or 1.63 per cent to 5755.7 at the close.
That marks a 4.7 per cent weekly gain for the market.
4.00pm: ASX falling into month end
Australia’s sharemarket is falling sharply into the close ahead of a potential rebalancing.
The S&P/ASX 200 is down 1pc at 5790. It could get dumped by balanced funds in the closing match. The share index is up 5pc for the month whereas bonds are flat.
At the same time Afterpay is up 2.7pc before MSCI index inclusion at the close.
Olivia Caisley 3.33pm: JobKeeper not only support option: PM
Scott Morrison has rejected claims his government is at odds with the Reserve Bank in regards to steering the economy out of the crisis, declaring their approach is “very consistent”.
Following a meeting of the National Cabinet on Friday the Prime Minister said it was wrong to suggest JobKeeper and JobSeeker payments were the only economic support the government was providing and he was very focused on job creation.
“There are many, many, many forms of support that the government is providing and we will target the best measures to do the job that we need it to do and that is to support people, staying in jobs, and getting back into jobs,” Mr Morrison said. “That’s what’s the most important thing and what we’re focused on and our programs will support that.”
It comes after Reserve Bank governor Philip Lowe on Thursday said the Morrison government might need to consider extending the JobKeeper and JobSeeker wage subsidy packages come September if the economy hasn’t recovered significantly.
“The Reserve Bank may have run out of ammo when it comes, largely to what they can do on cash rates, but the Commonwealth government in particular has certainly stepped into the breach and we’ve done so significantly,” Mr Morrison said.
Read more: PM scraps COAG as focus shifts to jobs
3.28pm: US turnaround helping ASX
Australia’s sharemarket is recovering alongside US futures after sharp intraday falls.
After falling 1.6pc in early trading, the S&P/ASX 200 recovered to be down 0.5pc at 5822.
S&P 500 futures were down 0.2pc after falling 0.9pc before US President Trump’s keenly awaited speech on China.
After switching from growth to value this week, investors have gone a little defensive on the local market today.
Consumer staples and utilities leading gains, while the Financials, Real Estate and Energy sectors are down after strong gains this week.
The four major banks are down 1.5-4.7pc after Macquarie’s Victor German said it’s not worth chasing their shares after the rise this week.
2.52pm: Moody’s downgrades Qantas outlook
Credit rating agency Moody’s has cut Qantas’ outlook to negative as it tipped weakness in the airline industry to persist until 2023.
Qantas’ rating had been under review since March 20, at the initial introduction of travel restrictions to curb the spread of coronavirus.
Today, Moody’s said its action reflected the impact on Qantas of the breadth and severity of the shock, and “broad deterioration in credit quality it has triggered” but said Qantas could benefit from Virgin’s ongoing administration process.
“Qantas expects domestic flight activity to resume from July, but there remains significant uncertainty around the pace at which capacity will need to increase to meet consumer demand,” the credit agency said, adding that it expected that Australia would keep the current 14-day quarantine arrangements in place for international travellers entering the country.
“The negative outlook reflects the continued uncertain prospects for the airline industry, with risks of extended disruption to travel causing further strain on the company’s balance sheet and liquidity.
“Moody’s expects to change the outlook to stable when it appears the threat of the coronavirus has been brought under control and Qantas is in a position to reduce leverage.”
QAN last traded down 2.2pc to $4.00.
Olivia Caisley 2.21pm: Virus progress helps ASX to trim losses
Scott Morrison has declared the nation is “on track” with tackling COVID-19 and making progress far sooner than he could have imagined several months ago when the coronavirus reached Australian shores.
But the Prime Minister cautioned there is still a risk of further outbreaks and an enormous amount of work is still required to manage the spread of the virus, as well as reopening the Australian economy.
“We would be foolish to think that we were immune or that we are immune and as a result, the three-step plan, keeping the balance between the health management of the crisis and the economic management of the crisis in balance, continues to be the balance that the National Cabinet seeks to achieve,” Mr Morrison said following a meeting of the National Cabinet on Friday.
The Prime Ministers optimism is helping the ASX to pare its daily losses, last down 0.83pc from as much as 1.3pc.
Follow the latest at our coronavirus live blog
Glenda Korporaal 2.17pm: Brookfield to lob bid for Virgin
Canadian infrastructure company Brookfield is expected to put in a bid for Virgin Airlines today.
While it is not part of the official short list of four consortium also putting in indicative bids for the airline to administrator Deloitte’s Vaughan Strawbridge, it is understood that it will also submit its own bid for the airline as soon as today.
The national secretary of the Transport Workers Union, Michael Kaine, told the Australian today that he expected that Brookfield would be putting in a bid for Virgin today despite the fact that it was not one of the short listed bidders chosen by Deloitte two weeks ago.
“It is my understanding that Brookfield will make an offer today,” he said.
“If that turns out to be correct it will be a good thing,” he said. “Brookfield is a serious bidder. It has a track record of building infrastructure around the world.
Read more: Bidder Bain outlines ‘hybrid’ plan for Virgin
2.11pm: Business credit surge is over: ANZ
A drop in business credit growth for April is a sign precautionary shoring up of balance sheets is over, with subdued growth to persist going forward, according to ANZ.
Analysing the latest data from the RBA, economist Hayden Dimes writes that Australia’s business credit surge is over.
“We anticipate new business loan growth to be subdued going forward as businesses try to protect revenues rather than expand operations. We remain of the view business credit will go negative over the next six months,” he says.
On housing loan growth, he says investor credit is dropping while owner-occupier credit is lifting but the divergence is not likely to continue as the housing market is forecast to deteriorate in the coming months.
Read more: Credit growth slows
1.55pm: Employment stabilising after record drop: NAB
The latest ABS household survey suggests employment is broadly stabilising after record losses during the height of the pandemic panic, according to NAB.
Economist Kaixin Owyong writes the survey shows employment is near its early-April low, though the share of people working paid hours held steady.
“Recent hard payrolls data on employment also suggests employment may be stabilising after earlier record job losses,” she notes.
“Today’s survey also shows than many parents and guardians have altered their working arrangements to care for their children. This supports the government’s focus on returning schools back to normal to allow people to return to work.”
The survey showed 63.2pc of respondents had a job in mid May, below the 66.2pc pre-virus share in early March.
Nick Evans 1.21pm: Fortescue loses native title appeal
Fortescue Metals Group has lost its High Court bid to overturn a Federal Court ruling handing exclusive native title rights to the Yindjibarndi people over an area of land including the company’s multi-billion Solomon mining hub.
The High Court ended the long-running battle between Fortescue and the Yindjibarndi Aboriginal Corporation (YAC), on Friday declining Fortescue’s application to have a full Federal Court ruling in YAC’s favour examined in Australia’s final court of appeal.
YAC first lodged its claim for exclusive native title over 2700km of land north of the Karijini National Park in 2003, and has been fighting a protracted battle with Fortescue for the better part of a decade, as the land contains Fortescue’s Solomon project, a key expansion project for the iron ore miner that lifted its production.
Fortescue chief executive Elizabeth Gaines said the decision would have no impact on Fortescue’s tenure at Solomon and the company did not expect any “material financial impact” as a result of its failure in the High Court.
FMG last traded up 0.6pc to $13.60.
Read more: Fortescue loses native title High Court appeal
Gerard Cockburn 1.15pm: Hostplus pays out $1.2bn in early super
Hostplus says it has paid out $1.18bn to 172,000 of its members through the early release of super scheme.
The industry fund has experienced a high proportion of requests, as a large portion of its membership base work in industries that were forced to close during the coronavirus pandemic, namely hospitality, events and recreation.
Australian Prudential Regulatory Data indicates Hostplus has had the second highest number of application requests within the sector.
Hostplus chief executive David Elia said the fund has managed to process 96 per cent of claims within five business days.
“Our members are some of those that have been hardest hit by the COVID-19 pandemic and we are working hard to ensure they can access their funds as soon as possible, while mitigating any security or fraud risks relating to the early release scheme,” Mr Elia said.
Read more: More than a million apply for early release
1.01pm: Westpac, NAB lead ASX lower
A sharp reversal in the major banks has sent the ASX200 lower by 1.1 per cent at lunch, with losses across all sectors bar tech, telcos and materials.
At 1pm, the benchmark index is off by 62 points or 1.06 per cent to 5788.8 – bouncing from lows as much as 5761.
Westpac and NAB are taking the biggest hit – down 5pc and 4.8pc respectively while gold miner Northern Star jumps by 7.6pc.
Here’s the biggest movers at lunch:
Bridget Carter 12.58pm: Shell to launch $US2.5bn Curtis Island sale
DataRoom | Global oil giant Shell is about to launch the sales process for the $US2.5bn stake it owns in the Queensland Curtis Island LNG plant infrastructure, with flyer documents promoting the process to be sent out next week.
A data room for the sale process will be open in June for prospective buyers and the expectation is that the process will be finalised by the end of this year.
The assets, including jetties, storage facilities and some utilities, are expected to appeal to international infrastructure investors such as Brookfield, pension funds and local infrastructure investors such as the Queensland Investment Corporation.
Buyers will receive a fixed annual cash income for 15 years that come from fees for using the plant, which is not linked to oil price or commodity prices or throughput.
The stake in the assets on offer largely consists of the plant’s supporting infrastructure.
Patrick Commins 12.31pm: Early super used to boost savings: ABS
More than a third of Australians who have claimed emergency early access to their retirement savings have instead funnelled as much as $5bn into their savings, suggesting a large portion have used the government’s measure for purposes other than immediate hardship.
The latest Australian Bureau of Statistics survey on the impact of the COVID-19 crisis on households also revealed that 57 per cent of respondents planned or had drawn on their retirement savings to pay household bills, mortgage, rent and other debts.
However, 36 per cent said they had not used super money as an emergency measure, instead telling the ABS they planned or had added it to savings.
So far there has been $14bn pulled out of super accounts since the scheme was announced on March 22. The ABS survey suggests $8bn of that has gone to paying bills, while just over $5bn has shored up applicants’ savings.
12.10pm: Credit demand slows
Private sector credit was flat in April, pulling annual growth slightly lower as business credit demand dropped and personal credit contracted.
In the latest financial aggregates data from the RBA, total credit rose 3.6 per cent for the year to April 2020, while April growth was flat versus 1.1 per cent last month.
Business credit dropped to 0.1pc from 3.1pc while personal credit contracted by 3 per cent from last months -1.4pc slip.
Housing credit fell to 0.2pc from 0.3pc.
Australian private sector credit was flat in April with annual growth down a touch to 3.6% (exp 0.6%mth, 4.0%yr). Led by business credit (6.7%yr) in response to liquidity strains. Personal credit (-9.3%yr) falls away even more than before the crisis. #ausbiz pic.twitter.com/Pyeh00BYuH
— James Foster (@JFosterFM) May 29, 2020
12.02pm: Thorn Group posts $81m loss
The owner of Radio Rentals Thorn Group posted an annual loss of $81.1 million for the year to end-March compared with a loss of $14.9 million in the previous corresponding period.
Revenue from continuing operations fell 7.9 per cent from $221.9 million to $204.3 million. The loss follows Thorn recently outlining closure of all its 62 Radio Rentals stores across the country.
The latest figures include provisions totalling $35.6 million for the expected impact of COVID-19 and the Radio Rentals’ store closure program.
Thorn said its revised business strategy is predicated upon the intention to continue to operate the consumer leasing business and to continue to operate the business finance activity.
Thorn reiterated its previously announced position of not providing profit guidance.
Shares in Thorn Group last traded at 12c each, down 3.9 per cent.
Read more: Radio Rentals to shut all stores
11.39am: China threatens countermeasures against US
The Chinese embassy in the US has warned China will take “necessary countermeasures in response to foreign meddling” in a statement on interference in its affairs in Hong Kong.
As a controversial national security bill passed yesterday, the US threatened to strip Hong Kong of its special status, but the embassy today says it will “allow no external interference”.
Statement of the Chinese Embassy in the United States https://t.co/FycZumJnx1 pic.twitter.com/SP6EWYOP0p
— Chinese Embassy in US (@ChineseEmbinUS) May 29, 2020
“The National People’s Congress’ decision about Hong Kong SAR national security legislation targets a very narrow category of acts that seriously jeopardise China’s national security,” it said.
“It has no impact on Hong Kong’s high degree of autonomy, the rights and freedoms of Hong Kong residents or the legitimate rights and interests of foreign investors in Hong Kong. It will provide a fundamental guarantee for the effective implementation of “One Country Two Systems”.
“As for foreign meddling in Hong Kong affairs, we will take necessary countermeasures in response.”
ASX200 last down 1.22pc.
11.26am: ASX falling as China, US tensions flare
Shares are swiftly losing ground ahead of an announcement by US President Donald Trump on China.
The benchmark ASX200 is off by 1.1 per cent to 5788.2 as jitters build of a fresh standoff between the world’s two largest economies.
Adding to fuel to concerns is a statement from the Chinese embassy in the US saying “China will take countermeasures in response to foreign meddling”.
AUDUSD is lower by 0.1pc to US663.31c.
CHINA WILL TAKE COUNTERMEASURES IN RESPONSE TO FOREIGN MEDDLING.
— Danielle DiMartino Booth (@DiMartinoBooth) May 29, 2020
The volume of the saber rattling rises to a new pitch. @business
11.05am: Austal jumps as guidance upgraded
Shipbuilder Austal is the most improved in morning trade after upgrading its full year guidance and noting coronavirus was having a more limited impact than it had expected.
The group said a new $324m contract from the Australian government had bolstered its revenue and now expected to report $2bn for the full year, alongside earnings of $125m. That’s a lift from earlier guidance of $1.9bn in revenue and $110m in earnings.
“Austal’s continued strong performance across our shipyards in the USA, Australia, Philippines and Vietnam during the COVID-19 pandemic has provided confidence to increase the Company’s FY2020 earnings guidance at this time,” chief David Singleton said.
Shares in the company are up 13.4pc to $3.43.
Nick Evans 10.51am: Peninsular Energy chases $36m raise
DataRoom | US-focused Peninsular Energy is chasing $35.8m in a raising to wipe away a $27.8m debt facility that has overshadowed the company’s US uranium play, entering a trading halt on Friday as it runs a virtual roadshow.
Canaccord is leading the 7.1c a share raising, an underwritten eight-for-five renounceable rights issue at a healthy 45 per cent discount from the company’s 13c closing price on Thursday.
Like other junior uranium developers, Peninsula enjoyed a good run on the market from March, as uranium majors such as Kazakhstan’s Kazatomprom pulled back production in the face of the coronavirus crisis.
But despite positive news from the US in April, when the Trump administration’s Nuclear Fuel Working Group recommended the country expand its local uranium production and stockpiles, Peninsula has been held back by a lending facility with Resources Capital Funds and Pala Investments and others, with the company forced to extend the repayment terms in late April.
Canaccord is understood to have already sourced a $29.5m worth of cornerstone demand for the sub-underwriting of the issue, with further market bids due by market open on Tuesday.
10.44am: Morgan Stanley’s top ETF picks
For low-cost exposure to global quality stocks – strong balance sheets and stable or growing profitability – Morgan Stanley Wealth Management prefers ASX-listed VanEck Vectors MSCI World ex Australia Quality ETF (QUAL.AX) and the currency-hedged version (QHAL.AX). Among non-ASX listed global quality factor ETFs, London-listed iShares MSCI World Quality ETF (IWQU) is preferred.
The wealth manager prefers QUAL and QHAL due to their “robust measures of ‘quality’, a large number of diversified holdings, narrower bid/ask spreads and a solid track record of performance”.
IWQU is preferred for its liquidity, acceptable management fees, relatively tight bid-ask spreads, low tracking error to the preferred benchmark with fees in line with other smart beta ETFs.
The wealth manager notes that BetaShares Global Quality Leaders ETF (QLTY.AX) has lower fees than QUAL and QUAL, at 29 basis points, but has a higher bid-offer spread of 75bps.
Eli Greenblat 10.30am: PAS Group sinks into administration
Tough retail conditions that have persisted for years and accelerated during the coronavirus pandemic have claimed another victim with PAS Group placed into voluntary administration.
The ASX-listed PAS Group owns a portfolio of fashion brands including Black Pepper, Review and Yarra Trail, and has been struggling for years.
In a statement to the ASX it said it had entered voluntary administration, with the Group’s Board of Directors appointing PwC partners Stephen Longley, David McEvoy, and Martin Ford as voluntary administrators.
“While the Board is of the view that the company is solvent, given the issues as a result of unfavourable financial market conditions, the COVID-19 crisis and the challenges of restructuring in that environment, it felt that Administration was the best way to affect change while protecting all stakeholders,” the company said.
Read more: PAS Group enters administration
Gerard Cockburn 10.22am: Lynas defends action in disclosure probe
Lynas says its bid for a US Department of Defence tender is still in progress and that it did not initially update the market about the department’s decision to defer the first phase of the process as it believed the information was not price sensitive.
Responding to an aware query from the ASX, the rare earths miner said it had received notice from the DoD on April 29 that its Phase 1 project had been put on hold but said the duration had not been specified and as such, the company hadn’t thought it necessary to update the market.
The ASX raised concern that it wasn’t until after media reports surfaced on May 22, that the company disclosed any disruption to the contract. Lynas maintains the project is still progressing as normal and that “negotiations between parties regularly slow down and speed up, which had been our experience to date in the tender process related to this matter”.
“At no point in time, either via written transmission or delivered verbally, has Lynas been
informed – nor had reason to believe – that the DoD’s intent to award Phase I was in
jeopardy or to be cancelled; Lynas has only ever been informed that the DoD award for
Phase I was “on hold”,” Lynas wrote in answer to ASX probing.
LYC last traded up 1pc to $2.09.
Read more: Lynas moves a step closer to US push
10.12am: Bank shares lead pull back
Just as bank shares have led this week’s rally, so too are they leading the pullback in opening trade.
At the open, the benchmark ASX200 is lower by 39 points or 0.66 per cent at 5812.4 as US futures slip 0.4pc.
Banks are hardest hit after standout performance earlier this week – down 1.8pc as ANZ gives back 2.3pc, Westpac slips 3.1pc, NAB dips by 2.8pc and Commonwealth ekes lower by 0.9pc.
Elsewhere, Fortescue shares have jumped higher by 0.9pc while Afterpay is adding 1pc.
9.43am: OneVue halted amid Sargon liquidation
Shares in superannuation software group OneVue have been halted ahead of the open, pending further detail on the liquidation of Sargon Capital, which owes it $31m.
In a notice to the market, OneVue requested a halt until it made an announcement in response to a liquidator’s report on Sargon, expected to be before next Tuesday.
OVH last traded at 24c.
Read more: Super fintech’s future in doubt as Sargon falls into receivership
9.41am: Don’t chase the banks: Macquarie
Macquarie Equities analyst Victor German tells clients it’s not worth chasing the banks.
After the major banks (ex-CBA) outperformed the market by 16-17pc this week the residual value in the sector is “no longer large enough to chase the banks from here”, Mr German says.
“While the gap in bank year-to-date performance relative to the market remains large, we estimate that (a) 10-20 per cent relative difference is justifiable.”
9.38am: Nine’s new NRL deal in focus
Nine Entertainment to come under focus after it downgraded its planned cost savings for financial 2020 by signing a new NRL deal.
The new broadcast deal signed between Nine, Fox Sport and NRL Thursday night sees Fox Sports commit to the code for another eight years.
Nine opted not to extend its current rights beyond 2022 at this stage.
According to an ASX statement on Thursday evening, Nine Entertainment would save about $27.5m a year on their original deal, but with the season going ahead this reduces originally forecast cost savings for this year by $64m.
The key is whether investors will allow the savings to be rolled into the next two years. Under the revised deal Fox and Nine are understood to have been given a 30 per cent discount on their deal until the end of 2022.
Read more: $1bn NRL broadcast deal kicks off
9.34am: ASX to pull back
Australia’s share market looks set to fall before the weekend, rewinding some of the week’s strong gains.
Overnight futures relative to fair value suggest the S&P/ASX 200 will open down 0.3pc at 5833.
A bigger fall is likely due to month-end rebalancing and profit taking and hedging of risk before US President Trump’s speech on China.
The index is currently up 6.32 per cent this week, on track for its best week since December 2011 but its outperformance versus bonds this month means there could be selling at the close from balanced funds.
The Australian shares market is currently up 6pc for the month while the Australian 10-year bond yield is flat.
Also, while the S&P 500 remained above its 200-day moving average at 3001 on news of Trump’s speech on China, fell 0.2pc after rising 1.1pc intraday.
A restart of the trade war by reapplying tariffs would almost certainly be negative for risk assets after such strong gains since March.
If the share market does get such a clear negative catalyst, the S&P/ASX 200 might test support from former resistance in the 5500-5600 area. But it’s important to bear in mind that investors will be expecting the Fed to respond to any new threat to growth by increasing its asset buying.
9.21am: NextDC, Over the Wire ink deal
Listed junior telco and IT provider Over the Wire will migrate core elements of its network infrastructure to the facilities of data centre provider NextDC, under a new strategic partnership between the two parties.
OTW said the move was a “foundational building block” to bring it in line with world leading cloud providers, while NextDC touted the deal as a means to establish its “next generation” of data centres.
The deal was announced alongside a trading update for OTW, where the company noted its exposure to retail, hospitality and travel companies was limited, but its non-recurring business had been hit during the downturn, slashing forecasts by 30pc.
The company said it remained confident of being within 3pc of consensus ($90.4m of revenue and earnings of $17.4m).
9.14am: What’s on the broker radar?
- AGL Energy cut to Hold – Morgans
- Adairs raised to Buy – Goldmans
- Ampol raised to Overweight – Morgan Stanley
- Atlas Arteria raised to Hold – Morningstar
- Bapcor price target raised 20pc to $7.20 – Morgan Stanley
- Bendigo and Adelaide Bank raised to Neutral – Credit Suisse
- Blackmores raised to Market-weight – Wilsons
- Brickworks cut to Hold – Morningstar
- Corporate Travel Management cut to Neutral – Credit Suisse
- IDP Education cut to Hold – Blue Ocean
- Motorcycle Holdings raised to Add – Morgans
- New Hope cut to Neutral – Credit Suisse
- Webjet cut to Neutral – Credit Suisse
Gerard Cockburn 9.00am: RFG domestic trade improving
Retail Food Group says conditions are on the way up as more of its Australian franchises return to trade after shutdowns since early April.
The listed owner of Donut King, Michel’s Patisserie and Gloria Jeans chains, among others, said customers were returning to shopping centres and traffic to stores was roughly half that compared to the same time last year, an improvement from earlier drop off more than 50pc.
RFG said 290 of its outlets had so far received rent relief, and traction was increasing for relief of its remaining franchisees.
“We are buoyed by the reopening of c. 60 outlets which had temporarily closed due to the impact of COVID-19 restrictions and are cautiously optimistic that trading conditions will continue to improve in coming weeks,” chairman Peter George said.
Its overseas stores in the UK and NZ were more challenged, just 126 mobile units had reopened with 350 still closed, while a further 157 were restricted to take-out only.
8.53am: Atlas Arteria completes $420m placement
Atlas Arteria will return to trade after the completion of its $420m placement, said to have been oversubscribed with strong demand from domestic and offshore investors.
The toll road operator said funds would allow it to improve its flexibility to pursue growth opportunities.
Shares were offered at $6.20 apiece, and a further share purchase plan at the same price aims to raise a further $75m.
ALX last traded at $6.70.
8.25am: Costa looking for a new CEO
Horticultural company Costa Group says it is in talks with CEO Harry Debney over an “orderly retirement transition plan”.
Costa chair Neil Chatfield said Mr Debney had indicated he planned to retire as CEO in the next nine months, but would be available after that in a reduced capacity.
“The board is therefore enacting a plan which will establish a formal assessment and recruitment process with consideration to both internal as well as external candidates and will update shareholders as the plan progresses,” Mr Chatfield said, in remarks to be delivered to the company’s AGM, but posted on the ASX.
8.00am: Oil rises
Oil futures rose about 2 per cent overnight as a steady improvement in US refining activity offset a surprise build in crude and diesel inventories.
Brent for July rose 55 cents, or 1.6 per cent, to settle at $US35.29 a barrel on its second to last day as the front-month.
US West Texas Intermediate (WTI) crude rose 90 US cents, or 2.7 per cent, to settle at $US33.71. That move in US crude narrowed Brent’s premium over WTI to its lowest since mid-April.
Reuters
7.55am: Westpac’s Cobley retiring
Westpac has announced the retirement of Lyn Cobley, chief executive of Westpac Institutional Bank.
She is the third senior executive to leave the bank this month following the departure of consumer division head David Lindberg and chief technology officer Craig Bright.
Westpac CEO, Peter King, thanked Ms Cobley for her contribution in leading the Institutional Bank over the last five years. “Lyn navigated institutional banking during a period of intense global competitive pressures and structural changes across these markets following the global financial crisis.
“Under Lyn’s leadership the Westpac Institutional Bank team has worked tirelessly to meet
the needs of the bank’s government, corporate and institutional customers, most particularly
during the COVID-19 pandemic.”
Curt Zuber, group treasurer, will act as CEO of Westpac Institutional Bank from July 1, while an international search is undertaken.
7.45am: Gentrack posts half year loss
Software provider Gentrack has posted a $NZ12.8m half year loss, and 7 per cent fall in revenue to $NZ50.6m.
It says the net profit loss is due to impairment charges.
The NZ-based company blamed the fall in revenue on the loss of a number of UK customers due to supplier failure or acquisition, and a drop in non-recurring revenue in the UK and Australia
Gentrack is not paying a dividend.
7.40am: Tower lifts half year profit
Insurer Tower has posted a 24 per cent rise in half year net profit to $NZ14.4 million.
Revenue rose 11 per cent to $199.8m.
Tower also said it had updated its full year guidance for underlying net profit to between $25m and $28m,
Tower is not paying a dividend.
7.25am: ASX set to open lower
Sharemarket investors can expect the ASX to open lower after fears in US markets overnight about rising US-China tensions.
At 7.05am (AEST) the SPI 200 futures contract was lower by 20 points, or 0.34 per cent, to 5,836.0, suggesting losses in early trade.
In the US, the S&P 500 had been climbing for much of the day and was up as much as 1.1 per cent at one point. But it all disappeared after President Donald Trump said he would hold a news conference about China.
That raised immediate worries among investors about possibly worsening relations between the world’s largest economies, which had signed a deal earlier this year to at least pause their trade war.
The S&P 500 ended the day down 6.40, or 0.2 per cent, at 3,029.73. The Dow Jones Industrial Average swung from a gain of 210 points to a loss of 147.63 by the close of trading, down 0.6 per cent to 25,400.64. The Nasdaq composite fell 43.37, or 0.5 per cent, to 9,368.99.
The Aussie market had a buying spree on bank stocks on Thursday. The S&P/ASX200 benchmark index moderated its gains after being up as much as 2.5 per cent and finished ahead by 76.1 points, or 1.32 per cent, at 5,851.1 points, while the All Ordinaries index rose by 72.9 points, or 1.24 per cent, to 5,957.8.
At 7.05am one Australian dollar was buying US66.36 cents, up from US66.13 cents at the close of trade on Thursday.
AAP
7.00am: Trump order targets social media
President Trump signed an executive order on Thursday seeking to limit the broad legal protection that federal law currently provides to social-media and other online platforms, a move that is expected to draw immediate court challenges.
The order seeks to make it easier for federal regulators to hold companies such as Twitter and Facebook liable if they are deemed to be unfairly curbing users’ speech by, for example, suspending their accounts or deleting their posts.
Mr Trump signed the order after Twitter on Tuesday moved for the first time to apply a fact-checking notice to tweets by the president on the subject of voter fraud.
Speaking to reporters in the Oval Office as he prepared to sign the order, Mr. Trump accused Twitter of acting as an editor “with a viewpoint” and described the platform’s fact-check of his tweets as “political activism.” He said he would delete his Twitter account “in a heartbeat” if he felt the news media were fair to him.
“We’re here today to defend free speech from one of the greatest dangers, “ the president said. He acknowledged the order would likely be challenged in court, but added: “What isn’t?”
Mr. Trump said that, if his lawyers could find a way to legally shut down Twitter, “I would do it.”
Dow Jones
6.10am: US stocks turn lower on China tensions
A rally in US stocks came to an abrupt halt after President Trump said he would hold a press conference on China, raising jitters about a fresh standoff between the world’s two largest economies.
The Dow Jones Industrial Average fell 147 points, or 0.6 per cent, reversing course after two days of gains earlier this week.
The blue-chip index had been up more than 200 points prior to Mr Trump’s announcement on Thursday afternoon, US time. The president said he would announce a response to China’s push for tighter security controls on Hong Kong.
The S&P 500 was down 0.2 per cent, while the Nasdaq Composite fell 0.5 per cent.
After closing up 1.3 per cent yesterday, the ASX is poised to slip at the open. At 6am (AEST) the SPI futures index was down 24 points, or 0.4 per cent.
Recent moves by Washington and Beijing have fuelled concerns about a renewed US-China trade war, even as both economies are still reeling from the impact of the coronavirus pandemic.
China forged ahead on Thursday with a resolution to impose national-security laws on Hong Kong in a bid to crush anti-Beijing protests. That came a day after the House of Representatives passed a bill to sanction Chinese officials involved in the suppression of Muslim minority groups, and the State Department determined that Hong Kong no longer has a high degree of autonomy from China – a move that could open the way for Mr Trump to revoke special arrangements on trade.
“It’s just another potential concern on top of COVID,” said Brian O’Reilly, head of market strategy at Italian asset manager Mediolanum. “Whether we actually get into trade war 2.0 – I think even in a second term for Trump, they’d be reticent to go down that path.”
Earlier, new data showed US workers filed just over 2.1 million jobless claims last week, extending a downward trend, but still at sharply elevated levels from before the pandemic.
States and cities have been moving ahead with plans to let businesses reopen, fuelling optimism that the economy has turned a corner. New data showed U.S. gross domestic product fell at a 5pc rate in the first quarter, slightly steeper than initially estimated and the largest quarterly rate of decline since the last recession.
“There is some optimism that the U.S. economy is moving forward,” said Jeffrey Schulze, an investment strategist at ClearBridge Investments. “It’s also important that there are no signs of a second wave of infections.”
Hong Kong’s Hang Seng index fell 0.7%, even as most other Asian and European indexes posted gains. The pan-continental Stoxx Europe 600 rose 1.6 per cent, while Japan’s Nikkei 225 jumped 2.3 per cent.
The rally in shares of technology companies has paused in recent days, having powered much of the recovery in U.S. stocks since March. They could come under further pressure in response to a draft executive order that Mr. Trump is expected to sign Thursday.
The order would seek to limit the broad legal protection that federal law currently provides social-media and other online platforms, according to people familiar with the draft.
Twitter shares dropped 2.5 per cent. Mr. Trump lashed out at the company this week after it added fact-checking notices to two of his tweets.
Upbeat sentiment about the economy spilt over into the energy market, with U.S. oil futures rising 90 cents a barrel, or 2.7 per cent, to $US33.71, despite a larger-than-expected increase in US crude inventories.
Dow Jones Newswires
5.50am: Renault to cut 15,000 jobs
French auto giant Renault plans to cut around 15,000 jobs worldwide, including 4,600 in France, as part of a two billion euro cost-cutting plan over three years, sources said.
The plan, which is set to be announced publicly on Friday, was explained to unions by the company on Thursday evening, multiple sources with knowledge of the matter told AFP.
The company hopes to bring about the job cuts without redundancies through voluntary departures, internal mobility measures and retraining, the sources added.
AFP
5.45am: Markets shrug off lay-offs
Stock markets mostly rose and the US dollar advanced, gaining traction from optimism over reopening economies and a huge EU coronavirus recovery package, dealers said.
Asia leapt higher but Hong Kong failed to maintain early gains as investors fretted over a US decision to revoke the city’s special status that could see it lose key privileges, bringing into doubt its future as a global financial hub.
Meanwhile, another 2.12 million people filed for unemployment in the United States last week, pushing total lay-offs since the start of the coronavirus crisis to more than 40 million, a level not seen since the Great Depression, the Labor Department said.
Oil markets had recovered after slumping on news Wednesday of a surprising jump in US stockpiles, denting hopes of a pick-up in energy demand in the world’s biggest economy.
They fell back when new data confirmed the jump and on concerns Russia ease back on its promises to restrain oil production, analysts said.
“Equity markets in Europe are set to finish the day in positive territory as traders are hoping that governments will continue to loosen their lockdown restrictions,” said CMC Markets analyst David Madden.
“The reopening of economies has been a common theme across the markets in recent weeks, and it’s the reason why stocks have been bullish lately.”
Europe’s bourses had vaulted higher on Wednesday after EU leaders unveiled a vast 750-billion-euro ($US825-billion) proposal to the European parliament and member states.
Markets extended gains Thursday as investors also looked past building China-US tensions, though worries remain about the uncertain global outlook.
London closed up 1.2 per cent, Frankfurt gained 1.1 per cent and Paris rose 1.8 per cent.
AFP
5.40am: White House scraps economic projections
The White House will not release its official mid-year economic update this summer, declining to put its stamp on data documenting the plunge into recession during the coronavirus pandemic and avoiding going on record with a prediction about the economy’s future.
Updated information about the budget picture will come out as planned, a senior Trump administration official said Thursday. A significant decline in tax receipts as well as outlays from almost $US3 trillion in coronavirus-related aid bills are sure to produce a multi-trillion-dollar government deficit for the budget year ending Sept. 30.
But the White House maintains that the underlying economic data would be too uncertain to convey a meaningful picture about the recovery, according to the official, who was not authorised to discuss the matter publicly before an official announcement and spoke on condition of anonymity. A key report on second-quarter economic growth will not come out until after the July 15 deadline for the annual update.
AP
5.37am: American Airlines to cut 30pc of management
American Airlines will cut 30 per cent of its management and support staff in its latest belt-tightening move during the prolonged COVID-19 downturn, the company disclosed.
The big US carrier outlined a series of measures to reduce headcount throughout its operations in an email to staff that was released in a securities filing.
American currently has a team of 17,000 people in management and support, meaning the actions planned will cut about 5,100 jobs.
The move follows statements from United Airlines, Delta Air Lines and other carriers that have signalled deep job cuts due to sinking air travel demand from coronavirus shutdowns.
AFP
5.35am: US economy shrank at 5pc annual rate
The US economy shrank at an even faster pace than initially estimated in the first three months of this year with economists continuing to expect a far worse outcome in the current April-June quarter.
The Commerce Department reported that the gross domestic product, the broadest measure of economic health, fell at an annual rate of 5 per cent in the first quarter, a bigger decline than the 4.8 per cent drop first estimated a month ago.
It was the biggest quarterly decline in more than a decade, since an 8.4 per cent fall in the fourth quarter of 2008 during the depths of the financial crisis.
The downward revision to first quarter GDP reflected weaker investment by businesses in their inventories which was partially offset by slightly stronger consumer spending.
Economists believe the lockdowns that shut wide swathes of the economy and triggered the lay-offs of millions of workers will send the GDP sinking at an annual rate of 40 per cent in the current quarter. That would be the biggest quarterly decline on records that go back to 1947. It would be four times the size of the previous decline set back in 1958.
Many forecasters believe growth will rebound sharply in the July-September quarter with the Congressional Budget Office predicting GDP will rise at an annual rate of 21.5 per cent.
AP
5.32am: US lay-offs climb to 41m
An estimated 2.1 million Americans applied for unemployment benefits last week despite the gradual reopening of businesses around the country, bringing the running total since the coronavirus shutdowns took hold in mid-March to about 41 million, the government said.
The figures underscored the continuing damage to businesses and livelihoods from the outbreak that has now killed at least 100,000 people in the US, more than the number of Americans lost in the Vietnam and Korean wars combined, and more than 33 times the death toll on 9/11.
AP
5.30am: Trump order to target social media
President Donald Trump is preparing to sign an executive order Thursday aimed at curbing liability protections for social media companies, two days after he lashed out at Twitter for applying fact checks to two of his tweets.
Trump had threatened social media companies with new regulation or even shuttering on Wednesday, lashing out at the new policy he believed interfered with his political messaging, but he alone can’t do that.
The proposed order would direct executive branch agencies including the Federal Communications Commission and the Federal Trade Commission to study whether they can place new rules on the companies – though experts expressed doubts much could be done without an act of Congress.
A similar executive order was previously considered by the administration but shelved over concerns it couldn’t pass legal muster and that it violated conservative principles on deregulation and free speech.
5.28am: US manufactured goods sales plunge
New orders for US manufactured goods cratered in April amid the COVID-19 pandemic as factories shut down nationwide, plunging 17.2 per cent, the Commerce Department reported Thursday.
That decline came after a 16.6 per cent drop in March, taking sales down to $US170 billion from $246 billion before the virus hit the world’s largest economy.
Excluding transportation, sales fell just 7.4 per cent, according to the data. In a separate report, the Commerce Department said US GDP fell 5.0 per cent in the first three months of the year, slightly worse than the 4.8 per cent drop originally reported.
AFP
5.27am: EasyJet axes almost third of staff
EasyJet will axe up to 4500 jobs, or almost one third of its staff, the British no-frills airline said, as the coronavirus ravages demand for air travel.
The carrier follows rivals British Airways, Ryanair and Virgin Atlantic in slashing thousands of jobs to save costs as the bulk of planes remain grounded despite easing of government lockdowns worldwide.
“We are planning to reduce the size of our fleet and to optimise the network and our bases,” EasyJet chief executive Johan Lundgren said in a statement.
“As a result, we anticipate reducing staff numbers by up to 30 per cent across the business and we will continue to remove cost and non-critical expenditure at every level,” he added.
The job cuts will impact up to 4500 of the carrier’s 15,000 staff, a spokesman told AFP. A consultation process will be launched in the coming days.
The announcement sparked an outcry from trade unions who are calling for state help for Britain’s stricken airline industry.
EasyJet, which grounded its entire fleet at the end of March, plans returning to the skies in mid-June with a limited number of flights.
AFP
5.25am: German inflation grinds lower
Inflation in Europe’s top economy Germany slowed further in May, official data showed, a week ahead of a European Central Bank meeting that could decide on further economic stimulus.
Price growth was just 0.6 per cent year-on-year, federal statistics authority Destatis said in a preliminary reading, in line with forecasts from analysts and down from 0.9 per cent in April.
In February, before the coronavirus pandemic, German inflation was running at 1.7 per cent.
Prices for the goods tracked in the basket fell slightly this month, a breakdown showed, driven by an 8.5-per cent drop in energy costs after last month’s oil price crash.
Meanwhile the pace of food inflation remained elevated compared with the pre-pandemic period.
Overall price growth reached just 0.5 per cent when measured using the Harmonised Index of Consumer Prices (HICP), the ECB’s preferred inflation yardstick.
That could encourage monetary policymakers next week to expand an unprecedented 750-billion-euro ($US826 billion) bond-buying program launched to cushion the impact of the pandemic.
AFP
5.20am: Nissan to close plants
Japanese automaker Nissan plans to close auto plants in Spain and Indonesia after sinking into the red for the first time in 11 years as the pandemic squashed global demand and disrupted production.
Yokohama-based Nissan’s chief executive, Makoto Uchida, said that its European production will be centred at its British plant in Sunderland.
Manufacturing now based in Indonesia will move to Thailand, as the Japanese automaker cuts global production by 20 per cent.
Nissan Motor Co. reported a 671.2 billion yen, or $US6.2 billion, loss for the fiscal year that ended in March, its first annual loss since 2009, in the aftermath of the global financial crisis.
The company reported a 319.1 billion yen profit in the fiscal year that ended in March.
It said its global vehicle production dropped 62 per cent in April from a year earlier to 150,388 vehicles. Global vehicle sales slipped nearly 42 per cent last month. Nissan’s sales for the fiscal year that ended in March sank nearly 15 per cent, to 9.9 trillion yen ($US91.6 billion).
AP
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