26 May 19
Market Matters Weekend Report Sunday 26th May 2019
26 May 19
Market Matters Weekend Report Sunday 26th May 2019
24 May 19
Trade concerns force some profit taking
24 May 19
Is it time to follow the market back into Consumer Discretionary stocks? (ALL, HVN, SGR, BAP, FLT, AHG, APE)
23 May 19
ASX comes off the boil after a stellar run (ALL, TRS, CSR)
23 May 19
Do we agree with UBS on the downgrade of some Platform providers? (AMP, IFL)
22 May 19
Local market grinds higher but financial services are left behind (BIN, AMP, IFL)
22 May 19
Income Report: 4 post-election income opportunities
22 May 19
Weekly Overseas Report - is it time for Australia or International exposure? (FB US, AAPL US, AMNZ US, NFLX US, GOOGL US)
21 May 19
APRA & the RBA help the local market shrug soft leads (LYC, HLS)
21 May 19
What a difference an election makes, what now? (NHF, WBC, NAB, EHL, WEB, TCG LN, SYD)
Yesterday the ASX200 only fell 26-points pretty much ignoring the Trump inspired 473-point plunge by the Dow on Tuesday night (US time) as MM often says “we don’t fall without the banks” and they actually rallied on Wednesday with the average move for the “Big Four” a gain of +0.18%. With the exception of NZ, which we will talk about later, Asia fared far worse with Japan, Hong Kong and China all falling well over -1%.
Volatility is the “Active Investors” dream and President Trump getting reacquainted with his Tweet account looks destined to deliver some opportunities in this traditionally unstable time of year – remember over the last decade the average return over May & June is -4.58% hence moving the cashed up MM Portfolios towards a fully invested position feels premature with the ASX200 only down -0.9% so far this month. We have been looking for a correction to buy and definitely don’t believe investors should panic because of current trade talk wobbles - but the plan remains to buy selectively.
At this stage we believe US & China will resolve a trade deal but not by Friday so the key to stock market stability is whether or not Trump will implement threatened elevated tariffs and then of course the million dollar question is does China decide to retaliate – this feels a close call.
Recently global markets have felt a little vulnerable after their strong advance from the December panic lows and many investors are likely to become increasingly nervous as its ‘that time of year’ but at MM we are looking to be accumulators into this / any meaningful correction – slowly but surely.Conversely we are still likely to be sellers if / when we get another rapid about turn by the ASX200 and an assault above the 6400 area i.e. “play” the value parameters.
MM believes the current weakness in stocks is a buying opportunity in cyclical stocks like the resources as opposed to defensive plays such as healthcare.
Overnight US stocks were choppy but finally closed little changed with the tech based NASDAQ the weakest link falling -0.3%, the SPI is calling the ASX200 to bounce ~10-points early on this morning.
This morning we are going to look at 3 unfolding market events on the macro, sector and stock level which we feel require consideration.
Happily 3 of the MM positions in the Platinum Portfolio have caught our eye for the correct reasons over the last few days, below is a quick update on our intentions at this point in time.
Waste management and recycling company Bingo (BIN) made fresh multi-week highs yesterday, not bad on a day when the Dow plunges almost 500-points.
MM remains bullish BIN initially targeting the $2.10 area, another 10% higher.
Bingo Industries (BIN) Chart
The previously named Primary Healthcare business Healius (HLS) made fresh highs for 2019 yesterday, now only 6c below the current takeover offer by Jangho following the talk / rumours of a number of private equity companies circling the stock.
MM remains mildly bullish HLS targeting the $3.25-$3.50 – but the positive risk / reward is rapidly diminishing.
Healius (HLS) Chart
Mining services business Ausdrill (ASL) has endured a tough fortnight after refinancing some credit facilities in the US plus being caught in the downdraft of fellow sector member CIMIC (CIM) following a Hong Kong short seller claiming much of its earnings were basically “smoke and mirrors”.
MM will consider adding to our ASL position on a close back above $1.55.
Ausdrill (ASL) Chart
Looking at 3 interesting events catching our eye.
Following the relatively stable night on Wall Street today we have focused on 3 events / situations which we believe investors need to understand, especially the potential ramifications for influenced stocks / local sectors.
1 NZ cut interest rates - will we follow shortly?
Yesterday NZ cut interest rates to the same 1.5% that the RBA has sat on for 33-months, their share market subsequently bucked the weak undertone of global stock indices and proceeded to rally +0.36%, closing at its high for the day almost making fresh 2019 & all-time highs – never underestimate the power of lower interest rates on equity markets in today’s environment.
The RBA left interest rates unchanged this month probably because of uncertainty created by the local election & US-China trade negotiations but we feel the market will start pricing in a cut in the months ahead and this means stocks should remain strong.
MM believes the RBA will cut rates in 2019 and the ASX200 will have another leg higher outperforming its global peers.
RBA & NZ cash Rates Chart
2 Which bank?
The local banking space is very interesting at present with a few potential scenarios getting our minds ticking:
1 – The AFR has reported that Suncorp (SUN) is considering spinning its bank division off so it fully realises the value of its insurance division. Applying a 12x P/E on the bank and a 15x P/E on insurance would give SUN around 50c upside from current levels, however the banks credit rating would likely be cut, leading to higher funding costs.
2 – However the regional banks as they are continue to struggle badly and we would not consider them without potential corporate action in the sector.
3 – A combination of SUN-BOQ or BOQ-BEN feels like a strong possibility - it would make sense for both parties however if 2 combine the 3rd would look extremely vulnerable in isolation.
MM likes BOQ below $9 considering the risk / reward of the above scenarios plus the banks hovering near multi-year low.
Bank Of Queensland (BOQ) Chart
3 TPG knocked back by ACCC
The ACCC has rejected the TPG – Vodafone merger but many pundits believe it will lose when challenged in court – as usual the lawyers are the winners!
The news embarrassingly leaked early from the ACCC (and picked up by Blomberg) led to a -13.5% plunge by TPG Telecom (TPM) and a -2.1% drop by Telstra (TLS). Markets simply hate uncertainty and the ACCC have certainly created this although if we look at the share price of TPM over the last 12-months it shouldn’t come as a huge surprise. MM can see value in TPM below $6 as a trade but it’s not a play we are likely to pursue.
MM is evaluating our reduced holding in TLS – it’s hard to see it outperforming in this new uncertain environment.
TPG Telecom (TPM) Chart
Of the 3 situations we looked at today our views are simple to understand:
1 – MM believes the ASX200 remains bullish and will be supported by the prospect of lower interest rates in 2019 / 2020.
2 – MM likes BOQ as a “situation” play into 2019.
3 – MM feels the Telco sector is likely to struggle under the uncertainty around the ACCC’s decision although TPM looks a fair “punt” under $6.
*Watch for alerts*
US stocks were again mixed overnight with the Dow closing up on the night while the NASDAQ fell -0.3%. We remain cautious US stocks short-term but still feel the post GFC bull market has further to charge.
US S&P500 Chart
No change with European indices, we remain cautious as we enter the “sell in May and go away” period for European stocks.
German DAX Chart
Overnight Market Matters Wrap
· The US had a breather from its recent selloff overnight, ending the session with little change across the major indices.
· Crude oil however jumped above US$70/bbl. helping the assisting the energy sector to outperform the broader market, up 1.4%. This will likely assist BHP to claw back most of its losses overnight, as the US session ended up an equivalent of 1.2% from Australia’s previous close.
· The June SPI Futures is indicating the ASX 200 to open up around 10 points higher
Have a great day!
James & the Market Matters Team
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.
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 09/05/2019
Reports and other documents published on this website and email (‘Reports’) are authored by Market Matters and the reports represent the views of Market Matters. The MarketMatters Report is based on technical analysis of companies, commodities and the market in general. Technical analysis focuses on interpreting charts and other data to determine what the market sentiment about a particular financial product is, or will be. Unlike fundamental analysis, it does not involve a detailed review of the company’s financial position.
The Reports contain general, as opposed to personal, advice. That means they are prepared for multiple distributions without consideration of your investment objectives, financial situation and needs (‘Personal Circumstances’). Accordingly, any advice given is not a recommendation that a particular course of action is suitable for you and the advice is therefore not to be acted on as investment advice. You must assess whether or not any advice is appropriate for your Personal Circumstances before making any investment decisions. You can either make this assessment yourself, or if you require a personal recommendation, you can seek the assistance of a financial advisor. Market Matters or its author(s) accepts no responsibility for any losses or damages resulting from decisions made from or because of information within this publication. Investing and trading in financial products are always risky, so you should do your own research before buying or selling a financial product.
The Reports are published by Market Matters in good faith based on the facts known to it at the time of their preparation and do not purport to contain all relevant information with respect to the financial products to which they relate. Although the Reports are based on information obtained from sources believed to be reliable, Market Matters does not make any representation or warranty that they are accurate, complete or up to date and Market Matters accepts no obligation to correct or update the information or opinions in the Reports. Market Matters may publish content sourced from external content providers.
If you rely on a Report, you do so at your own risk. Past performance is not an indication of future performance. Any projections are estimates only and may not be realised in the future. Except to the extent that liability under any law cannot be excluded, Market Matters disclaims liability for all loss or damage arising as a result of any opinion, advice, recommendation, representation or information expressly or impliedly published in or in relation to this report notwithstanding any error or omission including negligence.
Financial Services Guide
Date prepared: Wednesday, 22 November 2017
Last update: Friday, 23rd April 2019
About this Financial Services Guide (FSG)
This FSG provides you with key information about a range of subscription services offered by:
Marketmatters Pty Ltd (Market Matters) Australian Financial Services Licence No. 488798 ABN (20 137 462 536)
Level 29, Chifley Tower, 2 Chifley Square Sydney 2000
T: 1300 301 868
E: [email protected]
In this FSG, “we”, us” and “our” refer to Market Matters.
Market Matters holds Australian Financial Services Licence No. 488798 (AFSL) and is responsible for any financial services that we provide to you.
This AFSL was issued on 8th September 2016.
The purpose of this FSG is to provide you with information about:
Market Matters operates a website, www.marketmatters.com.au (Website), where customers may, for the payment of a subscription fee, access certain financial information and general advice. In particular, the Website provides:
This FSG relates only to the Website Services.
What financial services we can offer in connection with the Website Services
As holder of AFSL number 488798, in connection with the Website Services we are authorised to provide general financial product advice to both retail and wholesale clients in relation to the following financial products:
The Website Services are comprised of general advice only. That is, none of the advice given on the Website or by provision of the Website Services takes into account any of your objectives, financial situation or needs (Your Personal Circumstances). Before acting on any of the information, advice or Website Services, you must consider the appropriateness of this information in light of Your Personal Circumstances and, if necessary, consult a financial adviser before making any investment decision.
If you are seeking to acquire a specific financial product or security, you should obtain a copy of and consider the Product Disclosure Statement or Prospectus for that product before making any investment decision.
The Website does not provide a trading platform or access to a trading platform. There is no ability to purchase or sell financial products through the Website.
How do I access these services?
You can access these services by going to www.marketmatters.com.au and following the prompts and steps required to sign up for membership. Please read all terms and conditions carefully.
Fees and benefits payable to us and our associates
The Website is a subscription-based service. A yearly fixed subscription fee is payable to Market Matters when you subscribe to the Website which will vary depending on the type of subscription for which you subscribe. At the date of this FSG, the yearly subscription fees are as follows:
Platinum: $1,238 for 12 months
Platinum: $1,993 for 24 months
Subscription fees vary from time to time and are provided on the Website.
The Website does not currently feature third party advertising. Market Matters reserve the right to advertise at a future time for which they may receive remuneration. Any such advertising will be independent of any other content on the Website.
All representatives of Market Matters (Market Matters Staff) receive a salary paid by Market Matters. Market Matters Staff may also receive performance-based bonuses which are based on profitability, the number of subscribers and subscription renewal rates.
How do we manage potential conflicts of interest?
Market Matters have implemented policies and procedures to mitigate the risk of conflicts of interest. These include:
Market Matters Staff and Contributors are encouraged to express independent views and opinions on the topics they write about. This is established through ongoing training, external audits and our conflict of interest and staff trading policies. Market Matters Staff are required to serve the best interests of the subscribers, without consideration of any commercial or personal interests.
How is my personal information dealt with?
If you have a complaint about our services, you should take the following steps:
Contact us and discuss the complaint directly. If you do not feel comfortable discussing the complaint with us or your complaint is not satisfactorily resolved within 2 business days, please telephone Market Matters, on 1300 301 868 and ask to speak with the Complaints Officer. We suggest you put your complaint in writing at this time so that the issues are fully documented and understood by the parties. Your complaint should be addressed to:
The Complaints Officer
Level 29, Chifley Tower,
2 Chifley Square Sydney NSW 2000
Market Matters will review your complaint within 45 days and attempt resolution. If you are still not satisfied with the outcome, you may take your complaint to an external dispute resolution scheme. Market Matters is a member of the scheme operated by the Financial Ombudsman Service. You should write to:Australian Financial Complaints Authority Limited (AFCA)
You may also wish to consult ASIC in relation to your complaint. ASIC’s website contains information on complaining about companies and people and describes the types of complaints handled by ASIC. You can contact ASIC on its free call infoline:
Tel: 1300 300 630 or email [email protected]
We maintain professional indemnity insurance to cover our employees and Authorised Representatives (including us) for the financial services they provide, having regard to the following:
If you require further information about these compensation arrangements please contact us.
Terms and Conditions
This website, www.marketmatters.com.au, is published by Marketmatters Pty Limited (ABN 20 137 462 536) ('Market Matters', 'MM', 'us', 'we', 'our') Australian Financial Services Licence 488798
Financial Services Guide
Market Matters Financial Services Guide (FSG) is located here, and contains important information about the financial services provided by Market Matters. You must read our FSG and consider it in the context of your Personal Circumstances before acting on any advice. By accepting the terms and conditions you are acknowledging that you have read the FSG.
Provision of the Reports
Reports and other documents published on the Market Matter’s website (‘Reports’) are authored by Market Matters. The Reports represent the views of Market Matters based on technical analysis of companies, commodities and the market in general. Technical analysis focuses on interpreting charts and other data to determine what the market sentiment about a particular financial product is, or will be. Unlike fundamental analysis, it does not involve a detailed review of the company’s financial position.
The Reports contain general, as opposed to personal advice. That means they are prepared for multiple distribution without consideration of your investment objectives, financial situation and needs (‘Personal Circumstances’). Accordingly, any advice given is not a recommendation that a particular course of action is suitable for you and the advice is therefore not to be acted on as investment advice. You must assess whether or not any advice is appropriate for your Personal Circumstances before making any investment decisions. You can either make this assessment yourself, or if you require a personal recommendation, you can seek the assistance of a financial advisor.
The Reports are published by Market Matters in good faith based on the facts known to it at the time of their preparation and do not purport to contain all relevant information with respect to the financial products to which they relate. Although the Reports are based on information obtained from sources believed to be reliable, Market Matters does not make any representation or warranty that they are accurate, complete or up to date and Market Matters accepts no obligation to correct or update the information or opinions in the Reports.
If you rely on a Report, you do so at your own risk. Any projections are estimates only and may not be realised in the future. Except to the extent that liability under any law cannot be excluded, Market Matters disclaims liability for all loss or damage arising as a result of any opinion, advice, recommendation, representation or information expressly or impliedly published in or in relation to this report notwithstanding any error or omission including negligence.
Past performance is not a reliable indicator of future results. Brokerage costs have not been included in the calculation of performance. As financial products rise and fall in value, returns may be negative. Performance figures are not intended to be a forecast. Market Matters does not guarantee the performance of or returns on any investment.
Employees and/or associates of Market Matters may hold one or more of the stocks reviewed on this website.
Subscriptions and Subscription Prices
To access premium content available on the Market Matters website you must subscribe to one or more membership categories available on the website.
To subscribe to the Market Matters website you must go to the Memberships page of the website, provide the information marked as ‘Mandatory’ and select the payment option for the price quoted (at the time of your transaction). You will then receive a verification email from Market Matters indicating that your subscription and payment have been accepted and you will be able to access the premium content.
Prices published on the Market Matters website are quoted in Australian Dollars (AUD) and are inclusive of GST and/or all other duties and taxes. Market Matters has used reasonable endeavours to ensure that prices for subscription to its services are published accurately on the website but these prices are subject to change and Market Matters reserves the right to change these prices and will notify you of any increase by email (with the price increase to apply from the time the next payment is due).
Marketmatters Pty Ltd (ABN 20 137 462 536) will issue a tax invoice to paying subscribers in relation to any supply that is subject to GST in accordance with A New Tax System (Goods and Services Tax) Act 1999.
Any member is entitled to cancel their membership at any time. In the event a member does wish to cancel their subscription, cancellations must be notified in writing to:
Level 29, Chifley Tower, 2 Chifley Square, Sydney NSW 2000
or by email to: [email protected]
All cancellations of month-by-month subscriptions will be cancelled and not billed again the next month.
All cancellations within 14 days we be entitled to a full refund. Any introductory gifts, such as iPads, must be returned in their original condition before a refund will be made.
All cancellations made after 14 days of subscription commencement will not be entitled to a refund unless in the event of extenuating circumstances, at the sole discretion of Market Matters.
Subscriptions will automatically renew on the expiry date of current subscription. In these instances the subscription will be renewed at the current rate published on the Market Matters web site, using the same credit card that paid for the initial subscription, unless otherwise requested by the subscriber. A subscriber who wishes to cancel after being renewed in this way will have a “14 day cooling off period” in which they can request to discontinue and will receive a full refund for the renewal payment, this can be done in writing to:
Level 29, Chifley Tower, 2 Chifely Square Sydney 2000
or by email to: [email protected]
Market Matters has not reviewed any of the websites which link to this website or to which this website links. Market Matters is not responsible for the content of any other website or pages linked to or linking to its website. Following links to any other websites or pages shall be at the user’s own risk.
Copyright © 2013 Marketmatters Pty Ltd (ABN 20 137 462 536). No part of this website, or its content, may be reproduced in any form without the prior consent of Market Matters.
This Agreement is governed by and is to be construed in accordance with the laws of New South Wales, Australia. You agree to the non-exclusive jurisdiction of the courts of New South Wales, Australia in respect of any proceedings concerning this Agreement. This website is not available to US persons and by accepting these terms you confirm that you are not a US person.