Market Matters Afternoon Report Tuesday 23rd August 2016
Good Afternoon everyone
Market Data
What Mattered Today
A more bullish day than expected with the index keying off some reasonable results – the banks were strong contributing +14 index points – resources recovered from early weakness, Telstra (TLS) copped abid (sort of), Macquarie (MQG) put on +1.01% to close at $80.20 and CSL finally saw some buying into recent weakness closing up +2.24% to $110.11. The first bit of zing in the market for a while and that was met with strong volume – the desk was busy, which we like!
The below daily chart of the ASX 200 shows the biggest daily range for the last week or so – and upside momentum kicking in today. A re-test of 5600 the next logical level.
ASX 200 Daily Chart
We had a range of +/- 59 points, a high of 5574, a low of 5515 and a close of 5553, up +37 points or +0.7%
ASX 200 Intra Day Chart
Vocus (VOC) reported a strong set of numbers this morning although most was fairly well known given the recent update following their acquisition of NextGen. Revenue of $831m v guidance of $820m to $835m, EPS of 29.9cps v 27.6cps consensus while the dividend was 15.6cps v consensus of 18cps. The dividend was a tad light however you don’t own VOC for income – it’s a growth stock and their growth profile remains sound.
VOC has been on the acquisition trail over the last few years – buying Amcom & merging with M2 Telecom – integration is important here and the below guidance / update in worth considering.
Vocus Communications (VOC) Daily Chart
Elsewhere, mining services stocks were in focus with Monadelphous (MND) and Bradken (BKN) both reporting and both getting sold off the varying degrees. Bradken (BKN) finished the better of the two down -1.83% - which was a massive +25% from its lows of $1.70!! Big lines of selling hit the stock early after BKN once again (for the 3rd straight year) called the bottom in mining. The result was OK yet it’s a very capital-intensive business.
Bradken (BKN) Daily Chart
Monadelphous (MND) got hit but didn’t recover – ending the session down -17.75% to $8.99. Weaker than expected earnings by about 8%, and a poor outlook more than offset a marginally better than expected dividend (60cps v 59cps).
The issue with mining services coys collectively, is they’ve been bid up on the back of higher commodity prices and the assumption that mining companies will start exploring again – which is yet to happen. MND and co are being priced for better future earnings and simply, we’re just not seeing it as yet. Worley Parsons (WOR) reports tomorrow which will provide some more insight into the sector. They were off -5.65% today.
Monadelphous (MND) Daily Chart
Sectors
Source; Bloomberg
ASX 200 Movers
Reporting this week
NPAT = net profit after tax (consensus numbers)
EPS = earnings per share (consensus numbers)
DPS = dividend per share (consensus numbers)
Select Economic Data – This week Stuff that really Matters in Green
What Matters Overseas
All is quiet in the US ahead of Jackson Hole - indecision – low volatility – complacency all obvious in the S&P 500 below.
S&P 500 Daily Chart
FUTURES pointing to a good start…
All figures contained from sources believed to be accurate. Market Matters does not make any representation of warranty as to the accuracy of the figures and disclaims any liability resulting from any inaccuracy. Prices as at 23/08/2016. 5:00PM.
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