Overseas Market Report – Stocks Rise as Beaten Down Sectors Move Higher
U.S. stocks rose on Tuesday as some beaten-down sectors like financial services and consumer discretionary moved higher.
Several oil producers including Saudi Arabia, Russia, Qatar and Venezuela said they would freeze oil production at January levels if Iran and Iraq followed suit. The news initially lifted oil futures, but prices fell again during the session over fears the move wouldn't have a major impact on supply.
At the closing bell, the Dow, S&P 500 and NASDAQ were 1.4%, 1.7% and 2.3% higher, respectively.
Shares of ADT (ADT) soared 50% after agreeing to be bought out by private equity firm Apollo Global Management for nearly US$7 billion. The deal is one of the largest buyouts in recent years.
Pfizer (PFE) said it had agreed to a US$784.6-million payment to settle allegations that its Wyeth unit overcharged Medicaid for a heartburn drug. The pharma giant revised its fourth-quarter results to account for the charge. Pfizer shares were up 1.5% at the close.
For Australian ADRs listed on the NYSE, BHP Billiton rose $0.44 (1.94%) to $23.16, ResMed gained $1.15 (1.99%) to $59.03, Telstra Corporation fell 67 cents (-3.36%) to $19.26, Spark New Zealand slipped 20 cents (-1.85%) to $10.62 and Westpac rose $0.31 (1.53%) to $20.60.
At 7:15 AM (AEDT), the 10-year Treasury note yield was 1.78% and the 5-year yield was 1.22%.
European markets were mixed on Tuesday.
The FTSE 100 was up 0.7%, the French CAC 40 was down 0.1%, while Germany's DAX was off 0.8%.
Asian shares rallied. The Shanghai Composite was up 3.3%, the Hang Seng was up 1.1%, while the Nikkei 225 added 0.2%. India's Sensex was down 1.5%.
Australian Market Report – Local Market Expected To Open Higher
Ahead of the local open, SPI futures were 6 points higher at 4,881.00.
Tuesday 16 February – close. The Australian market posted its second straight day of profits, breaking through the 4,900 mark after local investors gained confidence from a record surge in Chinese lending market. A further recovery in iron ore and oil prices pushed resource stocks higher, whilst gold producers were hit hard due to falling gold prices overnight. Most sectors experienced positive results, with only telecommunication services ending slightly lower. The Australian dollar appreciated against most major currencies.
The All Ordinaries rose 68.20 points to 4,961.60 while the S&P/ASX 200 added 66.50 points to 4,910.00.
In This Issue
Argonaut Research| CTI Logistics | BUY
As a result of the “severe downturn” in WA’s economy, CLX has provided 1H16 EBITDA guidance 11% below our prior forecast. While recently acquired, east-coast based GMK did not fully take up the slack, its contribution was timely and highlights the importance of the east-coast diversification strategy. We expect CLX’s experienced management to negotiate this tough period and that the Company will emerge from the downturn a stronger business. We maintain our buy call on a $1.75 valuation (prior $2.00).
National Australia Bank (NAB)
National Australia Bank provided 2016 first quarter trading update. Unaudited cash earnings for continuing operations were $1.7bn for the December 2015 quarter, which is 3% above the quarterly average of the September 2015 Half Year result and 8% up on the pcp. On a statutory basis, unaudited net profit attributable to the owners of the Company for the December 2015 quarter was $1.5bn. Revenue increased 2%. The charge for Bad and Doubtful Debts for the quarter fell 52% to $84m. The Group's leverage ratio as at 31 December 2015 was 5.4% on an APRA basis. The Group's quarterly average liquidity coverage ratio as at 31 December 2015 was 119%. NAB lifted 23 cents to $24.98.
Monadelphous Group (MND)
Monadelphous Group announced results for the half year ended 31 December 2015. Sales revenue for the period was $737m, down 29.9% on the pcp. Net profit after tax was $37.6m, down 37.9% compared with the pcp. The Company has been awarded new contracts and contract extensions valued at $1bn during the period. The Board of Directors has declared an interim dividend of 28 cps fully franked. EBITDA was $62.7m, a decrease of 34.0%. EPS was 40.4c. During the period, the Company successfully broadened its services in core markets and progressed its strategy to expand into infrastructure and extend core services to overseas locations. MND gained 20 cents to $5.86.
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