Market Comment |
Australia |
| The S&P/ASX 200 index dropped 1.2% or 64.507pts to 5303.15 (day range: 5387.8 – 5303.1) on Tuesday. The index is below its 20d MA (@ 5543) and below its 50d MA (@ 5557). 18% of the index constituents are above their 20D MA (vs 23% the previous session) and 32% of the shares are above their 50D MA (vs 35%). Appx. 16% of the stocks are ‘oversold’ based on the RSI14 indicator.
QBE Insurance Group (QBE) announced that 1H net income surged 24% YoY to $488M and cash profit rose 13% to $471M. The Co proposed raising interim dividend by 33% to A$0.20 per share, saying: “The Board has increased the maximum dividend payout ratio to 65% of cash profits, up from the current maximum of 50%, commencing with the 2016 interim dividend.” Iluka Resources (ILU) reported that 1H net income surged to A$20M from A$12M in the prior-year period. The Co proposed maintaining interim dividend at A$0.06 per share. Qantas Airways (QAN) announced a commercial agreement with Sydney Airport over the airport’s domestic Terminal 3: “Under the terms of the 10-year deal Terminal 3 will revert from Qantas to Sydney Airport as of 1 September 2015. (…) Qantas will receive total cash proceeds of A$535M from Sydney Airport, with a A$210M gain on sale being recognised in FY2016, outside of Underlying Profit Before Tax.” Sydney Airport (SYD) reported that 1H net income more than doubled to A$135M on revenue of A$247M, up 4.6%. The Co proposed raising interim distribution per stapled security by 8.7% to A$0.125. Cardno (CDD) announced that it swung to a FY net loss of A$145M from a net income of A$78M in the previous year, citing A$196M of impairment charges. The Co proposed a final dividend of A$0.07 per share making a full-year dividend of A$0.20 (vs A$0.36 a year earlier). GWA Group (GWA) said it swung to a FY net loss of A$16M from a net income of A$19M in the prior year, citing impairment charges and losses on the sale of businesses such as Gliderol Garage Doors. FlexiGroup (FXL) was upgraded to “neutral” from “sell” and Energy Developments (ENE) downgraded to “neutral” from “buy” at UBS. |
Foreign Exchange |
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| The US dollar was mixed against its major counterparts on Tuesday. On the economic data front, US Housing starts rose to 1174K in July compared to a revised 1204K in June (1180K estimate). Building permits fell to 1119K in July from a revised 1337K in June (1225K estimate).
The Euro was under pressure against all its major pairs. In Europe, UK consumer prices fell by 0.2% in July (-0.3% expected) after being flat in June. YoY, prices increased by 0.1% after being unchanged a month earlier. Prices were expected to be flat on that basis. The Australian dollar was lower against its major pairs. |
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