ASX gives up a solid start (PNV, JHX)
WHAT MATTERED TODAY
Another day where the local market climbed the wall of worry led by the energy sector but supported well by IT and Materials i.e. the risk on sectors seeing most love while the defensive areas lagged. Banks also saw a reasonable bid today led by NAB +3.22% & Westpac +2.72% following the latter’s 1H20 report on Monday.
Overall, the ASX 200 added +87pts / +1.64% today to close at 5407 - Dow Futures are trading up 261pts/1.11%.
ASX 200 Chart
ASX 200 Chart
CATCHING MY EYE:
RBA Today: The RBA left rates on hold today and talked down the prospect of raising rates until progress is made towards full employment – seems a long way off. They forecast that unemployment will peak at about 10% before settling nearing 7% by the end of next year. They also outlined their view that the economic recovery will start later this year and pick up steam from there – highlights below.
RBA Highlights
Source: Bloomberg
Macquarie Conference: a new look Macquarie conference kicked off today as presenters moved online to reach investors. The virtual conference will continue through until Thursday with a broad range of companies presenting. Investor presentations like these are a chance for the executives to talk up activity, with most stocks that presented closing higher in the session. PolyNovo (PNV) was the biggest winner from the presentation, jumping 11.17%. The company which manufactures dermal regeneration technology jumped after saying that they have seen little impact to the supply chain while a more digital focus on sales had helped support revenue.
Bravura Solutions (BVS) caught a bid today after reiterating guidance for the full year with NPAT growth in the mid-teens. The presentation showed little new news – a large chunk of the slides were directly copy and pasted from the half year presentation in Feb. But that is all the market needed to hear, the financial SaaS business is one of the few stocks that haven’t been too phased by the virus turmoil.
Dexus (DXS) rose ahead of market despite flagging the various issues COVID is currently having, and will have on the business including reduced office demand with more flexible working arrangement. The property manager talked up their premium exposure, high occupancy levels and strong pipeline. Some names expected to present tomorrow include Bingo (BIN) & Cleanaway (CWY), Western Areas (WSA) and Medibank Private (MPL).
PolyNovo (PNV) Chart
James Hardie (JHX) +4.85%: shares in JHX were higher today with the company updating the market on business activities and guidance. They talked up their early response to the pandemic with strict social distancing guidelines and hygiene focus coming into effect ahead of the virus allowing many manufacturing sites to continue businesses as usual. The company still did tighten guidance to the lower end of the range with FY20 Adj. NOPAT at $US350-$355m with revenue remaining on track, but costs climbing on some operational sections in Europe and “government-mandated closures of manufacturing plants in Spain, New Zealand and the Philippines.” The Australian business was singled out as a strong driver of performance. 4th quarter results will be released in a fortnight.
James Hardie (JHX) Chart
Direct from the Desk: Ausbiz this morning talking market open…click here
BROKER MOVES: It's Now or Never to Buy Bruised Asia Oil Stocks, Bernstein Says “If you don’t want to buy oil equities now, will you ever?,” Sanford C. Bernstein analysts said in a note, upgrading their view on Asia-Pacific based companies including Woodside, Santos, Inpex, Cnooc and PetroChina to outperform.
· Bapcor Rated New Buy at Citi; PT A$6
· Transurban Cut to Hold at Morgans Financial Limited; PT A$13.52
· New Hope Cut to Neutral at Citi; PT A$1.60
· Orora Cut to Neutral at Macquarie; PT A$2.75
· Qube Raised to Buy at UBS; PT A$2.70
· Santos Raised to Outperform at Bernstein; PT A$6.30
· Oil Search Raised to Outperform at Bernstein; PT A$3.50
· Woodside Raised to Outperform at Bernstein; PT A$27
· Qube Cut to Hold at Morningstar
· Monadelphous Raised to Buy at Morningstar
· Alumina Raised to Hold at Morningstar
· Transurban Cut to Neutral at JPMorgan; PT A$13.50
· IGO Raised to Buy at Hartleys Ltd; PT A$5.20
· Transurban Cut to Hold at Jefferies; PT A$14.37
· Monash IVF Raised to Add at Morgans Financial Limited
· Adairs Raised to Add at Morgans Financial Limited; PT A$2.17
· FBR Cut to Speculative Hold at Bell Potter
OUR CALLS
No changes to portfolios today.
Major Movers Today
Have a great night
James, Harry & the Market Matters Team
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