Overseas Market Report – U.S. Stocks Unsettled After Brussels Terror Attacks
U.S. stocks finished mostly lower on Tuesday after a series of deadly attacks in Brussels rattled global markets.
Sharp gains in healthcare shares helped both the S&P 500 and Dow finish off their session lows.
At the close the Dow was down 0.2%, the S&P 500 had lost 0.1%, while the NASDAQ was up 0.3%.
The Markit Flash PMI, which provides an early look at March's manufacturing activity, was up slightly to 51.4 from February's reading of 51.3. Any reading over 50 indicates an expansion, but the index is still below its recovery average of 54.1.
For Australian ADRs listed on the NYSE, BHP Billiton fell 34 cents (-1.26%) to $26.73, ResMed gained 20 cents (0.36%) to $56.37, Telstra Corporation lifted 28 cents (1.43%) to $19.94, Spark New Zealand rose 8 cents (0.69%) to $11.70 and Westpac declined 13 cents (-0.52%) to $24.66.
At 8:00 AM (AEDT), the 10-year Treasury note yield was 1.94% and the 5-year yield was 1.41%.
There was limited U.S. corporate news on Tuesday.
European markets managed to pare some losses in late trading.
The FTSE 100 and French CAC 40 were both up 0.1%, while Germany's DAX was 0.4% higher.
Asian markets finished mixed.
The Shanghai Composite was down 0.6%, the Hang Seng was off 0.1%, while the Nikkei 225 jumped 1.9%. India's Sensex was up 0.2%.
Australian Market Report- Local Markets Expected To Open Higher
Ahead of the local open, SPI futures were 7 points lower at 5,156.
Tuesday 22 March – close. The Australian market finished flat after a choppy session, with gains across the healthcare, communications and consumer staples sectors offsetting major losses in the big banks and miners. Most sectors posted profits, with only materials and financials closing in the red. The Australian dollar appreciated against most major currencies.
The All Ordinaries added 5.90 points to 5,230.80 while the S&P/ASX 200 remained unchanged at 5,166.60.
In This Issue
Argonaut Research | Dacian (DCN) | SPEC BUY
Dacian Gold (DCN) released further assay results from infill drilling at Morgans Underground, part of the Mt Morgans Gold Project. Results to date have extended mineralisation, demonstrated continuity and improved confidence which should reallocate a majority of the Inferred Resource to Indicated category. DCN defined a largely contiguous zone of mineralisation along a 700m strike and 400m down dip. The Company should deliver a steady stream of positive news through 2016 from ongoing drilling, resource updates on multiple deposits, metallurgical results and a Feasibility Study, due late 2016. SPEC BUY maintained with a revised target price of $1.88 (previously $1.55).
Argonaut Research | Tox Free Solutions (TOX) | SPEC BUY
The $70m acquisition of Worth significantly increases exposure to NSW, broadening TOX’s geographic reach and client base. TOX has a solid acquisition track record and we expect synergistic benefits to be realised over time. With a 70:30 debt/equity funding structure and a reasonable EBITDA acquisition multiple of 5.4x, the transaction is earnings accretive and boosts our valuation to $3.35 (prior $3.10). Buy call maintained.
TPG Telecom (TPM)
TPG Telecom announced its financial results for the half year ended 31 January 2016. EBITDA for the period increased by 85% to $437.3m and NPAT was $202.5m, an increase over 1H15 of 90%. The Group's underlying EBITDA for the period is $368.8m, up by $132.6m (56%) over 1H15. This EBITDA growth includes a maiden contribution from iiNet of $111.1m for the five and a quarter months post acquisition. Underlying EPS increased by 31% to 19.6 cps. The Group delivered another strong cash-flow result in 1H16 with $339.9m cash generated from operations (pre-tax). The Board of Directors has declared an increase to the interim FY16 dividend by 27% to 7.0 cps (fully franked), payable on 24 May 2016 to shareholders on the register on 19 April 2016. TPM rose 74 cents to $11.09.
Ardent Leisure Group (AAD)
Ardent Leisure Group announced a comprehensive strategic process to focus on maximising the potential of the Group's significant leisure and entertainment businesses in Australia and the United States. This process will involve selling d'Albora Marinas, the largest marina group in Australia; the sale of the marina portfolio forms part of the Group's enhanced capital management plan and will assist in accelerating the pace and development of its Main Event Family Entertainment Centres in the USA and undertaking a review of strategic options for the Health Clubs and continuing with the 24/7 conversion programme to drive growth and capitalize on the positive success already experienced. AAD soared 23 cents to $2.18.
Recent Contacts & Presentations
Troy Resources (TRY), Medusa Mining (MML), Red 5 (RED), OBJ (OBJ), Sino Gas & Energy Holdings (SEH), Ausdrill (ASL), Danakali (DNK), Matrix (MCE), OBJ Limited (OBJ), Tox Free Solutions (TOX), Energia Minerals (EMX), Berkeley Energia (BKY) , Finders Resources (FND), 4DS Memory Ltd (4DS) , Bionomics Ltd (BNO), Resolute Mining (RSG), Avanco Resources (AVB), Rift Valley Resources (RVY), Kilbaran Resources (KNL), Pantoro (PNR)
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