Aussie stocks defy Trump concern & recover some of Fridays losses
Ah…the range bound mkt continues to play out with Fridays weakness partially offset by some strength in the mkt today, and the index entering its 13th week of sideways trading action. Reporting season really heats up this week and a few of the bigger names came out today – more on that below, however the bigger corporate news out this morning was the announcement that CBA’s Ian Narev would retire by the end of the financial year after 5 ½ years in the top job.
For a number of reasons, potentially a similar hair line being one of them – I’ve been a massive fan of Ian Narev since he first joined CBA around 10 years ago. Despite the controversy in recent times, shareholders have also benefitted from it after he took over in Dec 2011. According to Bloomberg, CBA’s share price rose 66 percent since Dec 2011, beating the sector and trouncing the 35 percent gain for the S&P/ASX 200 Index over that period. Including reinvested dividends, CBA has the biggest total return of any of the big four Aussie banks during this period: 152 percent. CBA will be looking both internally and externally, and clearly they will be big shoes to fill.
On the broader market today, the IT sector led the way while most weakness was felt in the Utilities - an overall range of +/- 35 points, a high of 5735, a low of 5700 and a close of 5730, up +37pts or +0.66%.
ASX 200 Intra-Day Chart
ASX 200 Daily Chart
Bendigo Bank (BEN) – upgrades likely to flow through after BEN delivered a good result today and the stock put on +7.46% to close at $12.10. we have management in tomorrow afternoon however from the numbers today it seems theoperating environment for BEN is improving; with the outlook for margins, capital and bad debts positive. They’ve been strong in repricing loans of existing customers to improve margins and this sees the likes of Shaw and Partners analyst David Spotswood forecasting 5.9% revenue growth driven by 3.5% loan growth and 8bps margin expansion. If they assume cost growth of 2% as BEN target positive jaws and that bad debts remain well behaved, which should mean ~10% earnings per share growth plus a 5.9% dividend yield – hence why the stock was up today!
Bendigo Bank (BEN) Daily Chart
Newcrest (NCM) – missed expectations and the stock dropped, however a change in dividend policy probably helped somewhat to offset the negative share price reaction. Still, the stock was down -1.05% on the back of the result however it probably should have been more. In terms of underlying earnings, they printed $349m vs $442m consensus which is a big miss.
Newcrest Daily Chart
Have a great night
The Market Matters Team
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