Things to watch on the ASX today

Australian Stock Markets

The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) had a slow start to the week and finished the day 2.9 points lower at 6,084.5 points on Monday.

Will things be better on Tuesday? Here are five things that could shape the day’s trade on Tuesday.

ASX futures are pointing lower.
According to the latest SPI futures, the Australian share market is expected to open the day 11 points or 0.2% lower despite a solid day of trade on Wall Street and rises in base metal prices.

Over in the United States the Dow Jones Industrial Average started the week with a 1.2% gain, the S&P 500 was 0.7% higher, and the NASDAQ gained 0.4%.

BWX takeover offer revealed.
The BWX Ltd (ASX: BWX) share price is likely to return from its trading halt with a bang on Tuesday after it revealed the details of its takeover approach. According to the release, the approach has been made partly from within the company, with its CEO and CFO teaming up with Bain Capital to acquire 100% of the company’s shares.

An offer of $6.60 cash per share or a scrip alternative in a newly incorporated acquisition entity of 75% shares and 25% cash has been made. Considering its high level of short interest, I would not be surprised to see its share price shoot beyond the offer price today.

The Royal Commission continues.
Round three of the Royal Commission started on Monday with a focus on small business lenders. Westpac Banking Corp (ASX: WBC) came under the spotlight yesterday when the Commission heard how the bank sought to evict an elderly, seriously ill woman after her daughter’s business failed. Westpac representatives are due to return for further questioning this morning.

Technology One earnings.
This morning Technology One Limited (ASX: TNE) is expected to report its half-year results for FY 2018. According to Bloomberg, the market expects the technology company to report earnings per share of 2.8 cents. This will be a 12% increase on the prior corresponding period.

Telstra will be on watch again.
An unexplained mobile outage on the Telstra Corporation Ltd (ASX: TLS) network added to the negative sentiment surrounding the embattled telco company on Monday.

The nationwide outage was the third time this month that Telstra customers have been left without a service.

Things to watch on the ASX on Friday

Australian Stock Markets

On Thursday the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) dropped lower and finished the day down 0.2% to 6,094.3 points.

Will the benchmark index be able to bounce back on Friday and finish on a high? Here are five things that could shape the day’s trade:


ASX futures are pointing higher.
According to the latest SPI futures, the Australian share market is expected to open the day 0.2% or 14 points higher. This comes despite weakness on Wall Street overnight which saw the Dow Jones Industrial Average fall 0.2%, the S&P 500 decline 0.1%, and the NASDAQ drop 0.2%. Trade fears weighed on investor sentiment in the United States.

Oil prices continue to rise.
The Brent crude oil price broke through the US$80 a barrel mark overnight. It has since dropped back a touch but, according to Bloomberg, sits higher by 0.3% at $79.50 a barrel. The WTI crude oil price is up 0.1% to US$71.58 a barrel. This could put BHP Billiton Limited (ASX: BHP) and Oil Search Limited (ASX: OSH) in a position to have a solid finish to the week.

Australia's Westpac hires complaints head amid damaging inquiryAustralia’s biggest money managers have seen their shares pounded by a barrage of damaging allegations since February, when a Royal Commission inquiry began exposing their abuse of market power and contempt of customers. The bank promoted its corporate affairs manager, Carolyn McCann, to a new role of “group executive, customer and corporate relations”, a move it said would ensure any customer issues “stay front and center” at the bank.

ANZ sells stake in Cambodian joint venture.
After the market closed on Thursday Australia and New Zealand Banking Group (ASX: ANZ) announced the sale of its 55% stake in Cambodian JV ANZ Royal Bank to Japan’s J Trust. The proceeds inclusive of transaction costs, taxes and the release of accumulated foreign currency translation reserves equates to a circa $30 million loss on sale completion for ANZ.

Treasury Wine Estates will be on watch.
The shares of Treasury Wine Estates Ltd (ASX: TWE) will be on watch on Friday after heavy declines on Thursday. Reports in the AFR of a supply glut in China weighed heavily on the wine company’s share price. Management has refuted the claims, but the media outlet has stated that short sellers aren’t convinced. Though it is worth pointing out that only a paltry 0.8% of the wine company’s shares were held short at the last count.

Five things to watch on the ASX today

Australian Stock Markets

On Wednesday the benchmark S&P/ASX 200 rebounded with a 0.15% or 9-point gain to 6,107 points.

Will there be more of the same on Thursday? Here are five things that could shape today’s trade:

ASX futures are pointing higher.
According to the latest SPI futures, the Australian share market is poised to open the day 11 points or 0.2% higher on Thursday. This follows a positive night of trade on Wall Street which saw the Dow Jones Industrial Average climb 0.3%, the S&P 500 rise 0.3%, and the Nasdaq push 0.6% higher.

The miners could do the heavy lifting.
BHP Billiton Limited (ASX: BHP) shares and Rio Tinto Limited (ASX: RIO) shares could be on course to make new 52-week highs on Thursday after a positive day of trade in London. The mining giants saw their UK-listed shares rise 1.9% and 2.7% respectively. Rises in the oil, copper, and iron ore prices appear to have driven their strong performances.

Dulux results are released today.
This paint, coatings, adhesives, and building products provider is due to release its half year results this morning. According to Bloomberg, DuluxGroup Limited (ASX: DLX) is expected to deliver earnings per share of 17.6 cents, compared to 18.7 cents in the first half of FY 2017. Australian Agricultural Company Ltd (ASX: AAC) is expected to release its results also.

Westpac shares go ex-dividend.
The shares of Westpac Banking Corp (ASX: WBC) will be heading lower this morning after the banking giant goes ex-dividend for its interim dividend. Eligible shareholders can look forward to receiving the bank’s 94 cents per share dividend in their nominated account on July 4. Popular dividend share Dicker Data Ltd (ASX: DDR) will also trade ex-dividend this morning.

A2 Milk will be on watch.
A2 Milk Company Ltd (ASX: A2M) shares will be on watch today following the release of its softer than expected sales update. Whether or not its shares rebound higher will likely depend on what the broker community has to say on things. A note out of Goldman Sachs this morning reveals that its analysts have retained their buy rating but cut the price target on its shares slightly to $12.70.

The ASX fell back, Oil producers at it's best

Australian shares fell for the second time in three sessions as another surge in global trade tensions sent investors shying away from equities and as A2 shares fell hard.

The S&P/ASX 200 index fell 42 points, or 0.7 per cent, to 5789 while the All Ordinaries lost 44 points, or 0.7 per cent, to 5899 and the Australian dollar traded at US76.92c.

The losses in Australia came after another steep trade-related drop on Wall Street where speculation that the Trump administration is considering a crackdown on Chinese investments in technologies sent a technology sector already battered by revelations around data practices reeling.

Still, concern over a trade war was enough to batter stock prices in the Australian equity market, with the growth-sensitive resource sector under pressure as the banks also sold off.

Iron ore producer Fortescue Metals fell 4.6 per cent to $4.37, diversified miner BHP lost 1.1 per cent to $28.67, while Rio Tinto fell 1 per cent to $73.39.

Banks under pressure included CBA, down 0.8 per cent at $71.86, ANZ, down 1.1 per cent at $27.10, NAB, down 0.8 per cent at $28.40 and Westpac, down 0.4 per cent at $28.58. Macquarie shares fell 1.2 per cent to $102.81.

A2 Milk plunged 7.5 per cent to $12.06 after it said it's expecting marketing investment in the second half of 2018 to exceed investment made in the first half of 2018 by between NZ$35 million ($33 million) and NZ$40 million due to increased spending in China and the USA.

A2 investors were also eyeing a report in the New Zealand Herald that Nestle has launched a rival infant formula product in China under the brand name Atwo. A2 shares have performed strongly this year, up 63.5 per cent.

Australian asset manager Blue Sky Alternative Investments fell 9 per cent to $10.40 before trading was halted in its shares.

The ASX Is Retaining Losses And BHP Shares Are Down

The ASX is retaining losses at lunchtime, with banks still under pressure and helping to pull the index back to levels last seen in October.

The S&P/ASX 200 index is down 29 points, or 0.5 per cent, at 5791 while the All Ordinaries is down 30 points, or 0.5 per cent, at 5898. The Australian dollar is trading up 0.3 per cent at US77.24¢.

Banks trading with losses included CBA, down 0.7 per cent, ANZ, down 0.9 per cent, NAB, down 0.8 per cent and Westpac, down 0.5 per cent.

BHP shares were down 0.6 per cent, CSL shares fell 0.7 per cenr and A2 Milk lost 2.7 per cent.

AMP fell 1.6 per cent after it said its CEO will resign by the end of the year.

Gold miners remained higher at lunchtime, with Newcrest up 1.8 per cent, and oil and gas producer Santos climbed 1.6 per cent.

Gold futures posted the biggest weekly advance in almost two years last week as mounting economic and geopolitical tensions fuelled demand for the metal as a haven.

The metal advanced 3.3 per cent over the week, the most since April 2016.

Gold dipped $1.41 to $1345.84 an once on Monday.

NZ shares: MetroGlass sinks to record low

New Zealand Stock Markets

New Zealand shares fell as Metro Performance Glass sank to a record low on speculation it may drop out of the S&P/NZX 50 Index. Fisher & Paykel Healthcare, Fletcher Building and a2 Milk were among decliners while Kathmandu and Z Energy rose.

The NZX 50 fell 43.32 points, or 0.5 percent, to 8,284.34. Within the index, 24 stocks declined, 17 rose and nine were unchanged. Turnover was $184 million.

MetroGlass dropped 2.5 percent to 79 cents, a record low close. They sold in the 2014 IPO for $1.70 a share, allowing private equity owners Crescent Capital and Anchorage Capital to reap about $230 million selling down their holdings.

Like Fletcher and Steel & Tube, MetroGlass has grappled with capacity constraints in the construction industry, which has squeezed margins.

In October it announced a strategic review after a series of guidance downgrades and chief executive Nigel Rigby stepped down in December. March quarter reweightings for the NZX 50 may be announced as soon as this week.

Fletcher dropped 1.8 percent to $6.49 although Ward said chief executive Ross Taylor "has been talking a very credible story" about trying to ringfence losses at the company's B+I unit while completing a strategic review of the whole group.

Steel & Tube declined 0.5 percent to $2.08.

A2 fell 1.5 percent to $12.56, having soared 58 percent this year. Ward said it has continued to drift after its "extreme run" and also on news that management had been selling shares.

Synlait Milk decreased 0.1 percent to $7.49 and honey products exporter Comvita fell 1.3 percent to $7.40.

Westpac Banking Corp declined 2 percent to $31.95 and Australia & New Zealand Banking Group fell 1.9 percent to $30.13, reflecting the lenders' weaker stock across the Tasman.

F&P Healthcare fell 3.3 percent to $13.25 and Ryman Healthcare fell about 1 percent to $10.40. Kathmandu rose 2.7 percent to $2.28 and Z Energy rose 1.7 percent to $7.

Marsden Maritime Holdings was unchanged at $5.60 after chief executive Graham Wallace said he will leave the company at the end of this month.

NZX: New Zealand Shares rises for fifth day

New Zealand Stock Markets

New Zealand shares rose for a fifth day, following overseas markets higher, led by Synlait Milk after the milk processor bought a plot in Waikato for a new manufacturing facility. Spark New Zealand, Fletcher Building, and Air New Zealand all gained. 

The S&P/NZX 50 index increased 19.85 points, or 0.2 percent, to 8,360.38. Within the index, 24 stocks rose, 15 fell, and 11 were unchanged. Turnover was $128 million.

Stocks across Asia followed Wall Street higher as investors around the world await testimony by Federal Reserve chair Jerome Powell for insights into the central bank's view on US interest rates. Investors have already pared back expectations for more aggressive hikes this year, making equity markets more attractive.

New Zealand's market is also nearing the end of what's been a positive corporate reporting season, with most companies meeting expectations, meaning the historical price-to-earnings ratio of 18.5 isn't stretched. That compares to Australia's S&P/ASX 200 index's PE of 16 and Wall Street's S&P 500 index's PE of 23.2.


Synlait led the local bourse higher, gaining 3.3 percent to $7.15 after the company said it bought a site in Pokeno where it planned to build a second drying facility, spreading its geographic supply base and expanding processing capacity to meet growing demand for infant formula. A2 Milk Co, which has a long-running relationship with Synlait, gained 0.4 percent to $13.10, while Fonterra Shareholders Fund units decreased 0.2 percent to $6.07.

Spark rose 2 percent to $3.395, Fletcher Building gained 1.5 percent to $6.63 and Air NZ advanced 2.6 percent to $3.17.

The dual-listed Australian banks gained, with Australia & New Zealand Banking Group up 1.2 percent to $31.30 and Westpac Banking Corp rising 1.8 percent to $33.76. Locally listed lender Heartland Bank was unchanged at $1.82.

New Zealand Refining rose 0.4 percent to $2.39 after chief executive Sjoerd Post said he will leave the company at the end of July, ending five years in charge of the country's only refinery operator. Transport fuels firm Z Energy fell 1 percent to $7.13.

Mercury NZ slipped 0.3 percent to $3.21 after the electricity generator-retailer reported record first-half earnings before interest, tax, depreciation and amortisation of $301 million as favourable rainfall flooded its North Island hydro schemes. Trustpower, which also has exposure to North Island hydro generation, gained 1.6 percent to $5.20. South Island generator Meridian Energy fell 1.6 percent to $2.805, while Contact Energy rose 0.2 percent to $5.26. Genesis Energy rose 0.6 percent to $2.35.
Vital Healthcare Property Trust gained 0.5 percent to $2.10 after reporting a 2.7 percent decline in first-half earnings as the hospital owner and developer's management fees rose on the company's biggest property portfolio.

Outside the benchmark index, PGG Wrightson was unchanged at 61 cents after first half earnings beat expectations, New Zealand Oil & Gas was unchanged at 68 cents in reporting a narrower first-half loss having overhauled its portfolio, while NZAX-listed Foley Family Wines was unchanged at $1.51 when the winemaker returned to first half profit on a 21 percent gain in revenue.

Veritas Investments shares were unchanged at 5 cents after the food and beverage investor said it was considering a sale or merger of its profitable Better Bar Co unit when reporting first-half earnings.
Rakon was unchanged at 20 cents after saying it was in talks to buy out its senior partner in an Indian joint venture for US$5.5 million, having written down the value of its investment in the entity last year.

Among companies reporting tomorrow, Precinct Properties was unchanged at $1.26, Scales Corp slipped 0.7 percent to $4.54, Sky Network Television was unchanged at $2.80, Trade Me fell 1.4 percent to $4.30, Vector rose 1.5 percent to $3.30, Vista Group International gained 1.2 percent to $2.55, and Wellington Drive Technologies gained 6.3 percent to 17 cents.

ASX: Banks, Energy push up ASX market

Australian Stock Markets

The Australian share market at noon is still trading above 6,000 points, after US markets and global oil prices lifted.

The benchmark index is above 6,000 points for the first time since February 5 as Wall Street's rally on easing concerns about US interest rate hikes buoyed local investors.

Investors also responded positively to a generally good company earnings season.

Global oil prices jumped to a two-week-plus after an oilfield in Libya shut down and after Saudi Arabia - the Organisation of the Petroleum Exporting Countries' largest oil producer - said OPEC's efforts to cut stockpiles were working.

On the local bourse, in the energy sector, Woodside Petroleum lifted 1.4 per cent to $28.97 and Oil Search added 0.3 per cent to $7.58, but Santos was down 1.0 per cent at $5.07.

The big four banks were all higher, with ANZ and Westpac the best performers, both 0.9 per cent stronger, while National Australia Bank rose 0.8 per cent and Commonwealth Bank added 0.6 per cent.

Among the major miners, both BHP Billiton and Rio Tinto were off 0.4 per cent while Fortescue Metals was 0.3 per cent higher.

Gold miner Newcrest was down 0.8 per cent to $21.94 after it agreed to buy a 27.1 per cent stake in Toronto-listed Lundin Gold for $US250 million ($A318.8 million).

Among companies reporting earnings on Monday: BlueScope Steel gained 4.0 per cent to $16.115 after it improved its first-half net profit by 23 per cent to $441.2 million, helped by the restatement of deferred tax liabilities after January's cut in US corporate tax rates.

QBE lost 3.0 per cent to $10.405 after the Insurance giant reported a previously flagged full-year loss of $US1.25 billion ($A1.6 billion), due to one-off costs and blowouts associated with wildfires in California and Hurricane Maria in the Caribbean.

Amaysim dropped 5.2 per cent to $1.445 after the telecommunications and retail energy provider reported a first-half net loss of $2.37 million, down from an $8.3 million profit a year earlier.

Theme parks and entertainment centres operator Ardent Leisure lifted 3.7 per cent to $1.955 after it said it expects to trade profitably in the financial year's second half as attendances improve at the Dreamworld theme park on the Gold Coast.


Meanwhile, the Australian dollar has risen against the US dollar as risk appetite for the Aussie returned.

QBE reports record $1.3 bln loss and said it would exit Latin America to focus on its struggling units in Asia Pacific and North America, as it confirmed a record annual loss hurt by claims from natural disasters.

NZ dollar little changed as recovery in risk appetite weighs on greenback

New Zeland Share Markets

The New Zealand dollar was little changed against the US dollar as markets shrugged off the stronger-than-expected inflation data in the US and a recovery in risk sentiment weighed on the greenback. 

The kiwi traded at 73.71 US cents as at 5pm in Wellington versus 73.31 cents late yesterday.

The trade-weighted index increased to 75.33 from 75.10.

The US CPI data showed the core measure excluding food and energy was 0.3 percent in the month and 1.8 percent in the year, beating forecasts of 0.2 percent and 1.7 percent respectively.

However, some of the shine was taken out when weak US retail sales weighed on expectations around economic growth.

Robert Rennie, chief currency strategist at Westpac Banking Corp, also said investors may be taking a closer look at the fiscal situation as they look at the tax package in the US, the spending increases attached to the funding bill as well as (US President Donald) Trump's budget and infrastructure package.

The kiwi was also steady against the Aussie after jobs data across the Tasman added to the view there is little or no wage inflation and therefore no reason to lift interest rates anytime soon.

It traded at 92.90 Australian cents from 92.93 cents late yesterday.

The Aussie unemployment rate fell to 5.5 percent in January from 5.6 percent in December but the number of people in full-time work fell by 49,800 in January.

Paul Dales, chief Australia and New Zealand economist for Capital Economics, also noted a fall in hours worked, with employees on average working 2.7 percents fewer hours than a year ago.


Rennie said that even though global growth and growth in China is picking up and the Australian economy is forecast to grow above trend this year and into next "it feels as if it is going to be a long time before we see wages and inflation return to levels they (the RBA) would like to see."

He noted that New Zealand central bank did signal an uptick in interest rates toward the end of its forecast cycle in the latest monetary policy statement and while the RBA does not provide the same detail "certainly when you read between the lines you get the sense there is a bit of a difference in the profile" for rates between the two central banks, which could benefit the kiwi.

The kiwi traded at 52.58 British pence from 52.66 pence.

It traded at 59.16 euro cents, unchanged from yesterday and rose to 4.6754 yuan from 4.6425 yuan.

The kiwi advanced to 78.55 yen from 78.34 yen.

New Zealand's two-year swap rate rose 2 basis points to 2.17 percent, while 10-year swaps rose 4 points to 3.29 percent.

NZ dollar rises on growing inflation expectations

NZX Stock Markets

The New Zealand dollar rose after the Reserve Bank's survey of expectations showed firms are predicting inflationary pressures.

And ahead of US inflation which may offer a steer on the Federal Reserve's interest rate track.

The kiwi gained to 73.31 US cents as at 5pm in Wellington from 72.77 cents as at 8am and 72.62 cents late yesterday.

The trade-weighted index increased to 75.10 from 74.62.

The RBNZ's March quarter survey showed firms lifted their two-year inflation expectations to 2.11 percent from 2.02 percent in the prior period, while one-year inflation expectations remained steady at 1.86 percent.

The central bank has signalled it will keep the official cash rate at a record low 1.75 percent until the latter half of next year at the earliest but does keep a close eye on the expectations as they have an impact on wage and pricing setting behaviour.

"The dollar got quite a bounce from the inflation expectations," Westpac Banking Corp head of NZ strategy Imre Speizer said.

It is a "bit of a puzzle" as to why the two-year inflation expectations lifted while the one-year outlook was steady, but Speizer said firms may be factoring in new government initiatives and a revised policy targets agreement, both of which will take some time to have an impact.

The survey also showed early signs of wage inflation and Speizer said that may have added to the kiwi's bounce.

Annual hourly wage growth for one year ahead is seen at 2.48 percent versus 2.25 percent in the prior survey and increases to 2.68 percent in two years from 2.57 percent.

Investors are now waiting for US inflation data for January.

Headline consumer price inflation is forecast to slow to an annual 1.9 percent and core inflation to 1.7 percent.

If inflation is higher the greenback should get a solid lift as it will solidify expectations the Federal Reserve will be lifting rates in March.

The kiwi gained to 92.93 Australian cents from 92.29 cents yesterday and increased to 52.66 British pence from 52.46  British pence.

It traded at 59.16 euro cents from 59.06 cents, and rose to 4.6425 yuan from 4.5810 yuan but fell to 78.34 yen from 78.82 yen as Japan's currency gained traction against the greenback.

New Zealand's two-year swap rate fell 1 basis point to 2.14 percent, while 10-year swaps fell 5 points to 3.25 percent.

Dollar falls almost half a cent against USD

Australian Stock Markets

The Australian dollar has fallen almost half a US cent against its US counterpart as equity markets continue to bounce back from a sell-off bloodbath that wiped $US4 trillion off the value of shares.

At 0635 AEDT on Thursday, the Australian dollar was worth 78.29 US cents, down from 78.77 US cents on Wednesday.

With easing volatility on Wall Street, the US dollar has stayed strong, rising against most major currencies amid the gains in equities.

Westpac’s Imre Speizer says the US dollar has had one of its better days of recent months.

The key event risks for the currency on Thursday were Reserve Bank of Australia’s governor Philip Lowe’s speech at the A50 Australian Economic Forum dinner and National Australia Bank’s fourth-quarter business survey.

He said he could not see the local currency gaining much ground on Thursday.

The Aussie dollar is also lower against the yen but higher against the euro.