Market Matters Afternoon Report Thursday 7th July 2016

Afternoon Report 07/07/2016

Market Matters Afternoon Report Thursday 7th July 2016

Good Afternoon everyone

Market Data

What Mattered Today

A busy day on the news wires today with NSW Premier banning greyhound racing in NSW, S&P putting Australia’s sovereign credit rating on negative watch then went further and did the same to Australian banks in their own right, new ASX listing kogan.com.au (KGN) – the well-known online retailer came to market and dropped 16% (closed $1.50) v $1.80 listing price while the Libs now have 73 seats – with six still in the balance.

The market was up early, tapered off into midday than once again rallied strongly from midday. A range of +/-40pts. 5204 low, 5244 high and a close at 5227; up +30pts or +0.58%.

Firstly we saw S&P put Australia’s sovereign credit rating on negative watch – which doesn’t really come as a surprise given current political issues however they took a further step by placing the banks on a similar footing. Commbank, Westpac, NAB and ANZ are among a small group of banks internationally with a double-A credit rating, however, this is strongly influenced by the financial strength of the federal government – and with the deterioration we see here, then it’s a natural consequence to see them take a negative stance on the BIG 4. According to S&P, the move stems from "a potential reduction in Australia's capacity to support systemically important banks."

Mike Baird today delivered a shock to the greyhound industry banning racing in NSW saying…."I feel much empathy for innocent trainers and those who will lose their job or hobby as a result of this. And I understand the disappointment of people who enjoy having a punt on the dogs," Mr Baird said in a statement. But we simply cannot and will not stand-by and allow the widespread and systemic mistreatment of animals."

This hit Tabcorp (TAH) fairly hard with the stock off -4.36% to close at $4.39

Cimic (CIM) the old Leightons was under the pump today after Morgan Stanley put out a fairly scathing report, saying….We believe the share price will fall in absolute terms over the next 60 days. CIM's shares have risen ~50% YTD. However, we think that future downside risks to CIM's share price are growing. We estimate that there is about a 70% to 80% (or "very likely") probability for the scenario. They went onto sight significant risks around earnings. Anyway, it was enough to get sellers active, push the stock down more than 16% which prompted a query from the ASX.

Sectors Today

Source; Bloomberg

ASX 200 Movers

What Matters Overseas

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