Pendal Group impresses, Oil surges (PDL)
WHAT MATTERED TODAY
It was a day for the energy names as oil kicked higher on fears Trump’s crack down on Israel would impact supply security. Woodside was the biggest beneficiary pushing 5.1% higher, followed closely by Oil Search. Pendal Group (BT Investment’s new name) topped the boards today after showing a 25% increase in revenue for the 6-months to March 31st – more on this later on. AMP shareholders delivered their first strike against executive remuneration after a fiery AGM today – the meeting failed to lift the spirits of investors with AMP falling 2.94% to $3.96, closing at the lowest level since 2012.
The market held the 6100 level although unconvincingly so , falling 26points from the intra-day high, and still feels tired in the short term after an impressive run recently.
Not a lot across the boards today which led to a quieter day – and a shorter afternoon note… Overall, a 10point gain by the index adding 0.18% to 6118.
ASX Chart
ASX Chart
CATCHING OUR EYE
Broker Moves;
· Goodman Group Cut to Hold at Deutsche Bank; PT Set to A$8.80
· Greencross Downgraded to Hold at Canaccord; PT A$4.68
· Macquarie Group Downgraded to Hold at Morningstar
· CSR Downgraded to Underweight at Morgan Stanley; PT A$4.75
· Incitec Downgraded to Underperform at Credit Suisse; PT A$3.39
· CYBG GDRs Downgraded to Hold at Bell Potter; Price Target A$6.10
· Sydney Airport Cut to Hold at Morgans Financial; PT A$7.12
· Gateway Lifestyle Raised to Buy at Shaw and Partners; PT A$1.94
· CBA Reinstated at Shaw and Partners With Buy; PT A$78
· TPI Enterprises Cut to Hold at Morgans Financial; PT A$1.77
· Elders Downgraded to Hold at Blue Ocean; PT A$7.25
· Challenger Upgraded to Outperform at Credit Suisse; PT A$13.20
· Suncorp Cut to Neutral at Credit Suisse; Price Target A$14.50
Pendal Group (PDL) $9.79 / +6.41%; bounced back strongly today after a few weak sessions following a solid half year result announced this morning which showed a 45% lift in profit on the year, and a 25% lift in revenue. The result was driven by a 14% increase in FUM, flowing through an 18% lift in management fees – although FUM increase was driven by performance rather than flows. Performance also fees jumped 70%, allowing Pendal to reward investors with a large increase in the interim dividend – lifting it 16% to 22c.
It’s been a bumpy ride for Pendal Group/BT Investment this year, falling more than 20% from the year to date highs set back in January. Recently weakness has been driven by UBS downgrading the stock and ~$350mil worth of Westpac’s holding coming out of escrow today. The deal to offload this parcel will likely come through before Pendal goes ex-dividend later this month, and is likely the reason buying has been hard to come by as large investors try to get their hands on some of Westpac’s stock. One to keep an eye on after the holding has been moved.
Pendal Group (PDL) Chart
OUR CALLS
No changes to the MM Portfolios today
Have a great night
Harry & the Market Matters Team
Disclosure
Market Matters may hold stocks mentioned in this report. Subscribers can view a full list of holdings on the website by clicking here. Positions are updated each Friday, or after the session when positions are traded.
Disclaimer
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 10/05/2018. 4.35PM
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