Trading Day: live markets coverage; Clean-up in crude, energy fallout; plus analysis and opinion
The ASX fails to latch onto a global recovery, while investors ditch retailers as an industry bellwether falls short.
And that’s the Trading Day blog for Monday, February 12.
Samantha Bailey 4.37pm: Bank weight hits local stocks
The local share market finished the session lower with most sectors in the red and banks weighing on the market, as the banking royal commission kicked off in Melbourne.
At the close of trade, the benchmark S & P/ASX200 was down 17.272 points or 0.30 per cent at 5820.699 points. The broader All Ordinaries index was down 17.758 points or 0.30 per cent, at 5919.699 points.
Moody’s economist Katrina Ell said it was no surprise the banking sector dragged the market lower given it makes up a large proportion of the ASX200.
“It’s been a tough run for Australia’s equity market and Monday didn’t bring relief,” she said.
“But this time it’s due to local, rather than offshore ructions. The first hearings of the royal commission into the financial services sector began on Monday and dragged banking stocks down.”
In financials, Commonwealth Bank slid 0.49 per cent to $75.88 while Westpac weakened 0.69 per cent to $30.14. ANZ backtracked 0.68 per cent to $27.70 while NAB drooped 0.8 per cent to $28.68.
Bendigo and Adelaide Bank shed 2.05 per cent to $11.00 despite the bank lifting its first-half cash profit 10.7 per cent, owner occupier loans offsetting a decline in investor lending.
BHP made 1.48 per cent to $29.56 while Rio Tinto added 1.48 per cent to $78.00.
4.11pm: Late sharemarket rally falls short
The S & P/ASX200 index closes down 0.3pc on 5820.7 after a materials-led rally faded and failed to bring the wider sharemarket into positive territory.
Supratim Adhikari 4.04pm: NBN Co revenue doubles
NBN Co has finally managed to lift its average revenue per user, with the company rolling out the National Broadband Network buoyed by more homes connecting to the network and retail telcos buying more wholesale capacity.
NBN Co has more than doubled its first half revenue to $891 million, with almost 3.4 million premises now on the NBN and a total of 7.1 million premises ready to receive a NBN service.
4.00pm: Banking royal commission begins
Australia opened a long-awaited inquiry into its massively-profitable finance industry Monday after a string of scandals rocked confidence in the sector.
The country’s “big four” banks — among the developed world’s wealthiest — have been under increasing scrutiny in recent years amid allegations of dodgy financial and life insurance advice, and mortgage fraud.
There have also been claims of anti-money laundering laws being breached and benchmark interest rates rigged.
Prime Minister Malcolm Turnbull had long resisted Labor opposition calls for a royal commission into misconduct, claiming it would be a waste of money, but mounting political pressure forced his hand.
With uncertainty over the issue hurting offshore investor confidence, he announced the inquiry late last year to probe “the nation’s banks, big and small, wealth managers, superannuation providers, insurance companies”.
AFP
3.51pm: The Trading Day ahead
Join the conversation with our Trading Day experts for breaking news and analysis in financial markets here and on Sky News Business (Ch: 602)
NOW: Michael McCarthy — Chief Market Strategist, CMC Markets
4.00pm: Scott Phillips — The Motley Fool
4.30pm: Steven Roberts — Chief Economist, Laminar
5.00pm: Evan Lucas — The Lucas Report
(All times in AEDT)
3.37pm: JB nears worst fall in 3 years
JB Hi-Fi is on track for its worst fall in over three years, falling over 8 per cent as investors take issue with the discount retailer’s half-year results released earlier today.
JB Hi-Fi booked $150 million in first-half net profit representing 37 per cent growth on the same period a year prior, however as Eli Greenblat and Mike Cherney write, the market appears concerned at management’s explicit strategic push toward sales growth amid rampant price discounting in the face of fierce competition.
“I think the [profit] margin will continue to be the focus, but that it will be harder for retailers like JB Hi-Fi to increase the margin from here,” says Morgans analyst Raymond Chan.
“The competition is real, and the consumer more adapted to purchase especially electronic products online.”
Dealing with native problems of its own, Myer shares hit a new record low with a fall over 7 per cent, while other peers discretionary retailers Harvey Norman and Webjet book falls over 3 per cent as the sector proves one of the session’s worst performers.
Bloomberg’s consensus analyst rating collation shows 6 buys, 5 holds and 2 sells on JB Hi-Fi shares.
JBH last down 7.5pc on $26.01
3.28pm: Energy beached on isle of hope
The odds were stacked against big energy names at the session’s outset, crude sustained a losing streak overnight and investment bank Citi affronted tragics with a sour note for some of the heavyweight players. Today the market concurs, energy the second worst performing sector in lunchtime trade:
“If crude is going lower then equities will struggle and ‘real’ yield will only go higher as inflation expectations head lower, which will act as a secondary headwind for risk assets,” says IG chief market strategist Chris Weston.
Citi analysts too reiterated their negative stance toward shares in the large end of the energy space. The investment house maintains a “sell” rating on both Woodside and Oil Search, but finds cause to keep mid-tier Caltex a “buy” after what it sees as a harsh serving from the market.
“While CTX has already offset the potentially lost WOW contract earnings through acquisitions and cost-out, we continue to think the market under appreciates the potential to further offset lost sales,” says Citi.
“S & M margins have also recovered from 2H17 competitions, and we also think the market has missed this.”
Caltex faces the possibiliy of losing a vital supply contract with Woolworths should the supermarket giant’s fuel business be sold to a competitor, such as would occur should a proposal from BP — currently under review by the ACCC — come to pass.
Citi’s energy sect holds a “buy” rating on Caltex and Sino Gas & Energy, a “neutral” rating on Santos and a “sell” rating on Woodside, Oil Search, Senex Energy and Beach Energy.
Bloomberg’s consensus analyst ratings collation shows 5 buys, 4 holds and 1 sell on Caltex shares (CTX).
Meanwhile, WTI crude appears to have bounced off a low to turn higher in the Asia session by 1.4 per cent, last buying $US59.89 /barrel.
3.05pm: Major Asian markets higher
Asian markets rose Monday after Wall Street gained following a week of history-making losses.
The Shanghai Composite Index rose 0.3 per cent to 3,140.59, Hong Kong’s Hang Seng added 0.5 per cent to 29,661.79, while Seoul’s Kospi added 0.8 per cent to 2,382.14.
Japanese markets were closed for a holiday.
Benchmarks in Taiwan, Singapore and Indonesia gained while New Zealand and the Philippines retreated
AP
2.48pm: ASX earnings season verdicts
Today’s ASX confessors and the market verdict delivered in earnings season ‘18:
Amcor (+0.2pc)
After an early dive over 4 per cent, shares in the packing manufacturer find respite throughout the session as investors moderate more negative sentiment following the company’s projection of both cost and demand-related earnings weakness alongside its profit result.
Ansell (-3.4pc)
The safety gear manufactur continues to reverse a near 3 per cent opening run in late trade after reporting a jump in first-half net profit to US$428.2 million, a period throughout which the company sold its global condoms business in restructuring its healthcare arm.
Aurizon (+3.5pc)
Shares in the railway operator go on a tear, the market appeased by a 52 per cent jump in first-half profit as it goes into damage control after an unfavourable ruling by the Queensland competition watchdog over its share of rail operations, as Matt Chambers writes.
Bendigo & Adelaide Bank (-2pc)
The regional lender reported an 11 per cent increase in first-half cash profit, however the period’s results appear not to have met the market’s expectations in what chief executive Mike Hirst calls “a big day” for banks as the Royal Commission gets underway in Melbourne.
JB Hi-Fi
On track for their worst fall in over 3 years, JB Hi-Fi shares are taking a hammering after it’s 37 per cent jump in first-half net profit also failed to live up to market hype, slashing prices and squeezing margins to remain competitive as Eli Greenblat writes.
2.19pm: The Trading Day ahead
Join the conversation with our Trading Day experts for breaking news and analysis in financial markets here and on Sky News Business (Ch: 602)
NOW: Jessica Rusit — FIIG Securities
2.45pm: John MacDonald — Hartleys
3.00pm: Live cross — Shaw and Partners
3.15pm: Politics Panel live
(All times in AEDT)
2.07pm: ASX winners & losers in late trade
1.52pm: Miners lead bounce from day’s lows
The S & P/ASX200 index last traded 0.3 per cent in the red on 5818.3 after earlier losses by as much as 0.7 per cent as heavily weighted miners BHP (+1.7pc) and Rio Tinto (+2.1pc) lead a charge by the index back to its starting point.
“One of the worst performing asset classes on Friday night was commodities,” says CMC chief markets strategist Michael McCarthy, “with that pressure coming in the absence of a stronger US dollar we generally expect to see the materials sector under real pressure. That [isn’t] the case at all today.”
“The reason we’re worried the future is higher interest rates, the reason we’re worried about that is extra growth, so that would normally be supportive of industrial commodities like oil and metal, to see them come off was quite surprising.”
Eli Greenblat 1.43pm: Aldi reaching ‘critical mass’
Easy pickings for supermarket discounter Aldi in the nation’s $90 billion grocery sector are becoming harder to come by, which will come of great relief to Woolworths and Coles who have watched billions of dollars in earnings flow to the German retailer, as Aldi’s aggressive store rollout on the east coast reaches “critical mass”.
For the first time in decades since Aldi first arrived in Australia its stores are starting to cannibalise from each other, according to a new report by UBS, including even in South Australia and Western Australia where it is new to the markets, with the pressure now back on Aldi to draw better sales from its existing stores through refurbishments and a higher quality fresh food offer.
Representing some potential good news to the incumbents, Woolworths, Coles and wholesaler Metcash after years of suffering a relentless onslaught from Aldi the German chain could now find its own pace of sales growth starting to slow and the competitive threat even plateauing.
Sue Neales 1.31pm: Court rules on cattle DNA patent
An audacious bid by a small US gene-tech investment house and multinational trading corporation Cargill USA to reap profits from patenting the genetic makeup and DNA of all cattle in Australia has been bolstered by a federal-court decision handed down in Melbourne last week.
Justice Jonathan Beach rejected claims by Meat and Livestock Australia — representing all beef and dairy cattle producers and researchers and opposing the patent — that the granted patent should be reversed because the bovine genome and sophisticated gene sequencing techniques used by cattle breeders were not patentable, ill-defined and not “new inventions”.
Alan Kohler 1.11pm: The three horsemen
Last week’s market sell-off prompts some thoughts about bonds, ETFs and the Vix.
Bonds
It seems fairly clear (but not certain, since nothing is certain) that bonds have entered a generational bear market — read more
ETFs
At the end of 2017, assets in exchange traded funds stood at just under $US5 trillion, having grown by more than $US1 trillion in a year. By comparison the US mutual fund industry recorded asset growth of $US91 billion — one-tenth of the growth in ETFs. Something similar has happened in Australia — read more
Vix
In 2008, the average daily volume of trading in options against the Chicago Board of Trade’s Volatility Index (the Vix) was about 100,000. Today it’s 3 million — read more
12.35pm: The Trading Day ahead
Join the conversation with our Trading Day experts for breaking news and analysis in financial markets here and on Sky News Business (Ch: 602)
12.45pm: Stephen Walters — Chief Economist, AICD
1.00pm: Ben Le Brun — Charles Schwab
1.50pm: Live cross — Bloomberg Asia
(All times in AEDT)
12.30pm: ASX winners & losers at lunch
12.03pm: Owner loans buoy Bendigo
Cliona O’Dowd and Michael Roddan write:
Bendigo and Adelaide Bank chief executive Mike Hirst said it was “a big day” for the industry as the Royal Commission kicked off in Melbourne on Monday.
Speaking from the bank’s offices in Docklands this morning, Mr Hirst today reported that the nation’s fifth largest mortgage lender lifted cash profit 10.7 per cent to $225.3 million for the six months through December, as owner occupier loans more than offset a decline in investor lending and higher rates boosted margins — read more
BEN last down 2.4pc on $10.96
Eli Greenblat 11.43am: Market lays JB stock to waste
Shares in JB Hi-Fi fell 6 per cent this morning as the consumer electronics retailer’s full-year forecast fell below consensus forecasts and the company sacrificed its margins as it invested in price to remain competitive.
Releasing its first half result this morning, JB Hi-Fi warned that in the second half it expected to focus on sales and market share which would result in sales growth exceeding gross profit dollar growth.
The shift is expected to be driven by threats to its market share from new online players such as Amazon as well as other online platforms which see consumer electronics as a lucrative sector.
As a result JB Hi-Fi said it expected underlying group net profit to range between $235 million and $240 million, up 13.1 per cent to 15.5 per cent.
However, this was seen by the market as 1 to 3 per cent below consensus — read more
JBH last down 7.4pc at $26.03, on track for its worst fall in over 3 years.
11.29am: Market falls, buoys big miners
Local shares remain in negative territory in late-morning trade after a brief attempt to claw back steep opening losses reversed to see key indices hit new daily lows.
The S & P/ASX200 index last traded down 0.7 per cent on 5797.7 with the entire ASX10 in the red save BHP and Rio Tinto, each finding support despite broad weakness in commodity markets underlying the two miners.
Retail stocks are taking a beating: JB Hi-Fi down nearly 8 per cent after releasing its first-half results, Harvey Norman falls as much as 4 per cent, Myer sinks over 5 per cent to hit a new record low and Webjet dives 4 per cent.
JB Hi-Fi stands the fifth most shorted stock on the ASX, according to ASIC data delayed by 4 trading sessions, the proportion of shares short sold typically positively correlated with volatility.
Ben Butler 11.09am: Hayne pivots on gag order sanctity
Banking Royal commissioner Kenneth Hayne has backflipped on a warning against financial services victims or whistleblowers breaching gag orders in submissions to the inquiry.
Opening the commission in a small, packed courtroom in Melbourne this morning, Mr Hayne also said he would be looking into why some banks and other financial services industry players he asked for more information about their misconduct over the past five years had advised they would fail to meet a deadline of 4pm tomorrow.
The commission last week advised that submissions should not include material that breaches nondisclosure or non-disparagement clauses in deals settling their disputes with the industry.
However, Mr Hayne warned that any institution that tried to enforce a gag clause against a person giving a submission faced “immediate consequences”.
More to come.
11.03am: Banking royal commission live
“Another area of early focus to the commission will be the financial planning and wealth management industry,” says senior council assisting the banking royal commission.
“Clients proposed trust and confidence in their financial advisers and it is important that their trust and confidence is well placed.
“Approximately 85pc of financial advisers, more than 15,000, were associated with financial product manufacturers in one or both of two ways.
“[First], they work within a dealer group and used services provided by that group. Second, the adviser was directly employed as an authorised representative under the corporate entities Australian financial services licence.”
10.57am: Banking royal commission live
“As I indicated earlier, one of the themes that has emerged from the public’s submissions through the commission website is inappropriate or unsuitable lending,” says senior council assisting the banking royal commission.
“The focus for the first round of hearings will be on consumer lending practices. It is
likely that this topic will be examined in the context of a number of credit product such as home loans my car loans and credit cards.
“The data published in the commission’s first research paper to which I referred earlier indicates that home loans are the largest asset on the books of authorised deposit taking institutions, comprising around 42pc of the assets of such institutions as at December 2017.
“As of November 2017, there was a total of [over] $1 trillion dollars in finance for
owner-occupied housing provided by these institutes and further billions of dollars in investment housing.
“As at September 2017, around 5.8 million households had a home loan with an authorised deposit taking institutions (ADIs).”
10.51am: Banking royal commission live
“Five of the 20 listed ASX10 companies are authorised deposit taking institutions (ADIs) [such as] banks, credit unions and institutions,” says senior council assisting the banking royal commission.
“They comprise seven of the 100 listed companies to make up the ASX 100.
“They contribute to the national economy. As at the end of September two, 2017, they held approximately $4.6 trillion in assets, a figure around 2.5 times the size of Australia’s $1.8 trillion nominal economy, as measured by nominal GDP.”
10.47am: Banking royal commission live
“Of the responses received to date, 85pc relate to ... banking ... 6pc [to] the general insurance market and 6pc to life and disability insurance market,” says senior council assisting the banking royal commission.
“A request is made that the person making the submission described the nature of the dealing.
“Of the responses received to date, the dealings of the majority are as follows ... personal finance approximately 31pc, superannuation 70pc of dealings, small business 17pc, small mortgage brokers 13pc ...”
10.44am: Banking royal commission live
“Since its release, more than 380 have been received through the [public] online form,” says senior council assisting the banking royal commission.
“The number has increased each week that the online form has been available.”
10.43am: ASX opens up, ignores US
The Australian share market has opened lower, with investors seemingly ignoring Wall Street’s positive finish in its previous session.
At 10.15am (AEDT), the benchmark S & P/ASX200 index was down 24.1 points, or 0.41 per cent, at 5,813.9, while the broader All Ordinaries index was down 21.5 points, or 0.36 per cent, at 5,916.0 points.
It comes after late gains in Friday’s Wall Street session saw the Dow rebound to close up 1.4 per cent.
However that came at the end of a wild week which handed US markets their steepest weekly losses in more than two years, with major indexes dropping more than 5 per cent.
Investors have been warned to brace for more volatility ahead — read more
AAP
10.39am: Ansell ups earnings guidance
Robb M. Stewart writes:
Ansell has flagged a steadying in raw-materials costs after a spike in prices last year and said it continued to hunt for acquisitions.
The company, a maker of safety gear ranging from surgical gloves to commercial diving suits, said Monday it anticipated stronger earnings over the financial year thanks to its buyback of shares and lower expected taxes with the cut to the US corporate rate, and as it saw a benefit from restructuring efforts.
The lift in guidance for the year came after the company recorded a jump in net profit on the back of asset sales to US$428.2 million, or 295.6 cents a share, in the six months through December from US$69.8m, or 47.4 cents, a year earlier — read more
ANN last up 0.9pc on $25.03
10.35am: Banking Royal Commission live
“It seems to me to follow that answering a notice or summons would not amount to a breach of any confidentiality or non-disparagement clause,” says Royal Commissioner Hayne.
“Further, and this is very important, under section six of the Royal Commission Act, if ... evidence produces a notice, no injury can be done to that person.
“Suing the person would almost certainly falls within that prohibition.”
10.33am: Banking Royal Commission live
“[Much is] to be gained by looking out why this happened and what was and what should have been the response [rather] than reproving what other processes have shown that happened or reproving what is now admitted to have occurred,” says Royal Commissioner Hayne.
10.32am: Banking Royal Commission live
“All of the public submissions made and to be made to the commission a very important to the work of the commission ... but I have to say the commission will not have time to publicly examined every case of alleged misconduct,” says Royal Commissioner Hayne.
10.29am: Banking Royal Commission live
“Some, not all, of those respondents, none of them a small entity, has said that they cannot comply with the request that was made for details about events of misconduct identified over the last five years within the time,” says Royal Commissioner Hayne.
“It has been said that the deadline cannot be met because of the amounts of material that has to be reviewed and assembled.”
10.27am: Banking royal commission live
“The examination of those responses showed that in important respects, some large industry participants had sought to respond by giving examples of misconduct, or conduct they
identified as falling short of community standards and expectations, rather than, as my original request had asked, by specifying the nature, extent and effect of the conduct they had identified,” says Royal Commissioner Hayne.
“I therefore wrote to some of those large respondents on Friday February two, asking each to give more specific information aboutmisconduct, identified by that entity over the last five years.”
10.21am: Banking royal commission live
“I wrote to a number of entities in the financial services industry and bodies representative, inviting each to make an early written submission to the commission, addressing a number of questions.”
Royal Commissioner Hayne goes on to describe queries in relation to any internal misconduct identified by institutions.
“What is the nature, extent and effect of that misconduct? Has the entity identified any conduct, practice behaviour or business activity it has engaged in ... which it considers has fallen below community standards and expectations?”
10.18am: Banking royal commission live
“One of the elements, perhaps a very important element of community standards and expectations may be derived from what was said in the Murray report into the financial system about the characteristics of an effect financial system,” says Royal Commissioner Hayne.
“That report said that the ultimate purpose of the financial system is to facilitate sustainable growth in the economy by meeting the financial needs of its users.
“The Murray inquiry said it believed that the financial system will achieve this goal if it operates in a manner that is efficient, resilience and fair.”
10.15am: Banking royal commission live
“All of the issues which the commission will have to consider are issues that arise and must be examined into their proper context,” says Royal Commissioner Hayne.
“For the moment, it is enough to mention three important part of that context, the nature and size of the Australian financial services industry, passed inquiries, and the regulatory framework.”
10.03am: Aurizon up 5pc in early trade
Aurizon opens up 5 per cent at $4.83 after its first half results released earlier this morning.
9.53am: ASX set to open lower
The Australian share market looks set to ignore Wall Street’s positivity and to open half a per cent lower.
The local share price futures index was last down 0.5 per cent.
In the US, equity markets rose close to 1.5 per cent on Friday despite sharp falls on key global indexes.
Asian markets sank more than four per cent on Friday, while Europe and London lost more than one per cent as volatility continued.
But US key indexes ignored their global peers’ negativity and climbed, giving investors some solace after a week of huge swings that shook the market out of months of calm.
“Accelerating negative momentum in industrial commodities appears to contradict the growth and inflation trigger for the current slump, but will likely weigh heavily on trading,” says CMC chief market strategist Michael McCarthy.
“Trading volumes may be subdued by key inflation reads from the US, UK and Germany later this week.”
Locally, in economic news today, CoreLogic’s capital city house prices survey for the week just ended is due to be released.
In equities news, Aurizon, Amcor, Ansell, Bendigo and Adelaide Bank and JB Hi-Fi release earnings results — with AAP
S & P/ASX200 index last 5838
9.41am: Banking royal commission begins
Megan Neil writes:
The banking royal commissioner will outline how he will investigate misconduct in the financial services industry as the much-anticipated $75 million inquiry gets underway.
Commissioner Kenneth Hayne QC will make an opening statement during a short initial public hearing in Melbourne on Monday.
The former High Court judge has 12 months to investigate allegations of misconduct or conduct that falls below community expectations in the banking, superannuation and financial services industry — read more
AAP
9.36am: The Trading Day ahead
Join the conversation with our Trading Day experts for breaking news and analysis in financial markets here and on Sky News Business (Ch: 602)
NOW: Chris Weston — Chief Market Strategist, IG
10.00am: Banking Royal Commission live
10.30am: Live cross — UBS
10.45am: Live cross — NAB Asset Management
(All times in AEDT)
9.27am: JB Hi Fi defies retail gloom
Mike Cherney writes:
JB Hi-Fi said its half-year net profit rose by 37 per cent, suggesting the Australian electronics retailer had a strong Christmas sales period despite the arrival of Amazon.com in Australia.
Net profit totalled $151.7 million in the six months through December while revenue rose by 41 per cent to nearly $3.7 billion.
The company (JBH) declared an interim dividend of 86 cents per share, up some 19 per cent from the prior period.
“We are pleased to have delivered record sales and earnings in the first half,” chief executive Richard Murray said. “It was another strong result for the JB Hi-Fi business in Australia, particularly through the important November and December periods.”
Looking ahead, JB Hi-Fi said it expected full-year net profit to be between $235 million and $240 million, a 13 per cent to 16 per cent increase on the underlying result in the prior period — read more
JBH last $28.11
9.13am: GPT chair Ferguson to retire
GPT Group chair Rob Ferguson says he plans to retire from the company’s board following its annual general meeting in May, with new board member Vickki McFadden slated to succeed Mr. Ferguson following her appointment today effective March 1.
Ms McFadden worked for 18 years in the areas of investment banking, corporate finance and
corporate law, previously as the Managing Director, Investment Banking, at Merrill Lynch Australia, is a member of Chief Executive Women and currently sits on the Advisory Board and Executive Committee of the UNSW Business School.
GPT last $4.83
9.05am: Bendigo seals 11pc profit growth
Bendigo Bank booked an 11 per cent increase in first-half net profit after tax to $231.7 million, with cash earnings attributable to shareholders rising 10.7 per cent on the same basis to $225.3m.
Revenue rose 6 per cent on the same period a year prior to $842.9m, while alongside results the lender announced a 35c per share fully franked interim dividend, up from 34c per share the same distribution a year prior.
BEN last $11.23
Ben Butler 8.57am: Big Four didn’t disclose rates
ANZ, National Australia Bank and Westpac joined Commonwealth Bank in failing to tell term deposit customers seeking a safe haven at the peak of the global financial crisis what interest rate they would get after their investment rolled over, The Australian can reveal.
Documents dating from between 2007 to 2009, obtained from the corporate regulator under Freedom of Information laws, show the big four banks did not disclose rollover rates in letters sent to customers whose term deposits were about to mature, exposing them to the risk they would receive a substantially lower rate from advertised offers.
8.42am: Aurizon core profit falls, outlook firm
Rhiannon Hoyle writes:
Aurizon Holdings Ltd. said first half profit jumped 52pc on the year-earlier period, when one-time charges weighed on its bottom line.
The Australian rail operator on Monday reported a net profit of $281.5 million for the six months through December, compared to a profit of $185.8 million a year ago.
“The change is a result of the $156 million of impairments and significant items that were recognised in the prior period,” the company said in a regulatory filing.
Underlying earnings before interest and tax dropped by 5pc to $485.3 million, although the company stuck to full-year guidance for underlying earnings between $900 million and $960 million.
Aurizon declared an interim dividend of 14 cents a share, up from 13.6 cents a year ago — Dow Jones Newswires
AZJ last $4.60
8.31am: JB Hi-Fi profit jumps in 1H
JB Hi-Fi first-half profit rose 37 per cent to $151.7m, while revenue rose 41 per cent on the same period a year prior to $3.7bn.
Alongside results, the retailer announced an 86c per share fully franked interim dividend, up from 72c per share the same distribution a year prior.
JBH last $28.11
8.22am: Amcor books first half-growth
Materials producer Amcor posted a 15 per cent increase in statutory net profit after tax to $US329.7m, underlying earings of $US329.7m up 3.7 per cent on a constant currency basis.
Sales revenue in the period fell 1.7 per cent on constant currency terms to $US4.5bn, up 1 per cent in US dollar terms.
Alongside results, Amcor announced an interim dividend of US21c per share, up 7.7 per cent on its prior half-year distribution
“The first half result was in line with the expectations we outlined at our AGM, and demonstrated the resilience and agility of Amcor in the context of short-term industry challenges related to raw material cost increases, weak volumes in one Rigid Plastics segment and mixed conditions in emerging markets,” said Amcor CEO Ron Delia.
Amcor now expects modest annual profit growth in the flexible-packaging business and a flat performance in rigid plastics. It had previously targeted mid-single digit growth in annual net profit, once the impact of currency swings was stripped out — with David Winning
AMC last $14.30
8.06am: China in AMP Life sale talks
Bridget Carter and Scott Murdoch write:
China Life is believed to be in talks about buying up to $3 billion worth of life insurance assets from AMP after the listed financial services provider last week flagged that divestments were on the cards.
This comes amid speculation that AMP’s adviser Macquarie Capital is working on an initial public offering or a demerger of its New Zealand operations, thought to be worth about $1.87bn.
7.00am: Dollar up
The Australian dollar has regained some lost ground against the US dollar which itself has preserved its recent gains.
At 6.40am (AEDT), the Australian dollar was worth US78.12 cents, up from US77.76 cents on Friday.
The US dollar on Friday lifted to finish its strongest week against a basket of currencies in nearly 15 months, as some traders piled into the greenback in a week of tremendous swings felt in stock and bond markets around the world, Reuters said.
The dollar’s advance was supported by some stabilisation in US stock prices. Westpac’s Imre Speizer says the US dollar, along with bond yields, stayed firm on Friday.
“The USD index closed up 0.2 per cent, near its three-week high ... (while the) AUD ranged between 0.7760 and 0.7830,” he said in a morning note.
He said there was little on the calendar to pose any real risk for the markets today, but he was not optimistic the local currency would continue to rise. The Aussie dollar is also higher against the yen and the euro. “Only a tentative bottom at 0.7760, momentum is still negative,” he said.
AAP
Andrew White 6.50am: More wild times ahead
Investors face another week of volatility when the Australian sharemarket resumes amid a heavyweight line-up of corporate results and aftershocks from last week’s correction in US markets.
A late rally in the US on Friday pushed the Dow Jones 330 points higher — almost 1.4 per cent — with futures over the weekend pointing to further gains.
Futures for the local market point to a decline of as much as 0.5 per cent but CommSec chief economist Craig James said that could be pessimistic, given the Friday rally in the US.
“We may be a little bit softer at the start of trade on the back of the resources but overall I think it’s going to be a choppy session,” he said yesterday.
“The volatility is still going to be with us for most of the week.”
At 7am (AEDT) the SPI futures index was down 28 points.
The benchmark S & P/ASX 200 index ended Friday down 0.9 per cent at 5838.0 points, leaving it down 4.6 per cent for the week.
AMP Capital chief economist Shane Oliver said last week’s sharp equities falls suggested we may have already seen the worst of market moves.
“But with bond yields likely to back up further and uncertainty around how much the unwinding of short volatility positions has to go, further weakness cannot be ruled out in the short term and volatility is likely to remain high,” Dr Oliver said.
In the US, even with Friday’s gains, the Wall Street benchmark S & P 500 fell 5.2 per cent for the week, its biggest weekly percentage drop since January 2016. The S & P 500 and the Dow industrials late last week met the official definition of a “correction”, falling more than 10 per cent from January 26 record highs.
Oil, gold, iron ore and a number of other base metals were all lower.
Mr James said investors in Australia wouldn’t get too carried away, given labour force figures were out on Thursday and RBA governor Philip Lowe gives testimony to a lower house committee on Friday.
Jobs growth of 15,000 positions is expected after November’s blockbuster 34,000 gain, and there will be interest in whether the unemployment rate falls below 5.5 per cent. A tighter labour market is hoped to generate higher wage inflation to counter stagnant pay packets.
With AAP
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