A bit of a yawn of a session
What Mattered Today
A bit of a yawn of a session really with the market opening higher, drifting back into lunchtime before spending the afternoon in a tight range. Ratings agency Fitch downgraded Aussie Banks to a negative outlook sighting an increase in ‘macroeconomic risks’ and slower profit growth. They reckon that low interest rates will continue to hurt margins however also believe that higher funding costs and a rise in loan impairments will also hurt. The scatter gun approach to highlighting risk that on balance doesn’t quite balance! Anyway, as you’d expect the news had very little impact on bank share prices today confirming that ratings agencies have about as much relevance as Alf Stewart on Home and Away. If you don’t get that analogy, give yourself a pat on the back, you’re in a better place than I am.
The US is on holidays tonight for Martin Luther King Jr Day, so no trade in bond or equity markets. King was the driver of the Civil Rights movement in the US, successfully protesting against racial discrimination before his assassination in 1968. He was shot on a hotel balcony in Memphis Tennessee on April 4th with many of the King family believing that the assassination was carried out by a conspiracy involving the US Government!
On the market today we had a range of +/- 42 points, a high of 5763, a low of 5721 and a close of 5748, up +27pts or +0.48%. Volume was about 25% lower than the 20 day average
ASX 200 Intra-Day Chart
ASX 200 daily chart
Estia Health (EHE); Rallied +4.91% today after they successfully completed the retail component of their capital raising. Importantly, there were only 7.2m shares that were not taken up equating to around $15m. The offer was underwritten so they’ll be taken up by the underwriters at $2.10. Not a bad result really given the issues the company has faced of late. The seemed pleased with the outcome. Clearly EHE is in a better financial position and has some flexibility going forward. We were keen to BUY EHE on a move nearer to ~$2.00 however it didn’t make it.
Estia (EHE) Daily Chart
Rio Tinto (RIO); Was higher today on the back of strong Iron Ore prices in Asia which rallied ~6% during trade. We have a short term options position on RIO looking for a move up to $65.
Nanosonic (NAN); NAN reported its 2Q17 sales of $18.3m up 101% on this time last year. For those that don’t know, NAN is a good mid cap healthcare equipment provider and they’re now ramping up sales of their Ultrasound Device. Although no forward looking statements were announced ahead of their 1H17 result due in February, NAN is only scratching the service in terms of product sales and earnings - good things are expected from this company. Look for the stock to make new highs above $3.60.
Sectors
ASX 200 Movers
What Matters Overseas
All the best
James, Nick & the Market Matters Team
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