Index flat, Stocks mixed (WBC, GMA, ORI, MFG)
The strong lead from futures failed to lift the market today as the index tracked lower throughout the day to close marginally down on a day that lacked any real direction. Reporting season continued to offer some stock specific risk as more companies posted both FY17 and 3Q17 updates which we will touch on later. Tech outperformed the market today, while financials lagged lead by Westpac falling 2.16%. Overall a range today of +/- 21points, a high of 5966, a low of 5957, and a close of 5953, down 6pts or -0.1%.
ASX 200 Intra-Day Chart
ASX 200 Daily Chart
Westpac (WBC) reported FY17 numbers today and followed the lead of NAB, posting a 1% miss on cash earnings, hurt by an increase in costs and lower markets income, but helped a significant beat in bad and doubtful debts. It is important to note that the much talked about Bank Levy was applied to the last quarter of FY17 and cost WBC “just” $67m which is less than 1% of revenue. Despite the miss on costs, WBC has not announced a similar cost cutting plan like NAB.
WBC fell 2.16% today after the result, it goes ex-dividend for 94c on the 14th of November. We own WBC in the Growth Portfolio.
Westpac (WBC) Daily Chart
Orica (ORI), the mining services and chemicals company also disappointed the market this morning, announcing a 1% fall in revenue as it forecasted a lag between the recent uptick in mining activity to flow through to demand for its services. Orica also noted that it faced increased costs from supplies that it would not be able to recover from existing contracts. ORI fell sharply on the back of the result to close down almost 10% on the day.
Orica (ORI) Daily Chart
In better news, Magellan (MFG) announced a very positive monthly FUM update with $1.8bil net inflows across each of its platforms. The retail inflows were particularly outstanding, growing by $1.6bil after falling the month prior. The global fund also seemed to perform strongly over the month, estimated to have beaten its benchmark by 0.8%. MFG closed 3.6% higher today to $25.49, a far cry from the October lows of sub $23.
Magellan (MFG) Daily Chart
Genworth (GMA) announced a 3rd quarter update on Friday morning, however the share price didn’t react until today’s session, spurred by another positive note out of Macquarie’s research team. Despite a fall in the Mortgage Insurers net profit, the result was underscored by an improvement in delinquencies, falling from 42.6% to 37% between the second and third quarters. The low bad and doubtful debts clearly helping both the banks and mortgage insurers here. We own GMA in the MM Income portfolio, which today closed 5% higher to $2.95.
Genworth Mortgage (GMA) Daily Chart
Have a great night
The Market Matters Team
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