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The ASX 200 started the new month in a cautious manner despite solid gains for US equities overnight. The index started the session with a gain of 5 points, before trading to an 11 point deficit at the low of the morning. As lunch approached the index was 9 points lower at 6270.
The main handicap for the index over the morning was the losses for the big four banks, which combined to take 14 points of the Index. Materials were the most improved sub-index, although the gains weren’t sufficient to balance losses for the financials. Healthcare names were the next best improvers , recovering from losses over the last two days.
A range of factors combined to support US equity markets overnight, including a sense of optimism around the subject of USChina trade. US Treasury Secretary Steven Mnuchin was quoted in the media as saying that ‘there continues to be quiet conversations’ in relation to reports that the US and China may restart trade talks. However, this news was balanced by the likelihood the Trump administration will propose an increase in tariffs from 10% to 25% on US$200 billion in Chinese imports.
In company news, Genworth Mortgage Insurance (GMA), reported a 53% fall in first-half net profit to $41.9 million from $88.7 million a year earlier. New insurance written for the six months fell 21% to $10.3 billion. Net claims incurred for the half rose modestly to $76.4 million, up from $73.6 million in 1H17. Notwithstanding the fall in profit GMA announced a special dividend of $0.04 per share, in addition to the interim dividend of $0.08. A short time ago GMA shares were ahead by 8 cents or 3% to $2.77.
Shares in real estate investment trust, BWP (BWP) were 1.7% or 5 cents lower at $3.25 after reporting full year results. The investor and manager of commercial properties throughout Australia said that total income for the full-year to 30 June 2018 was $153.4 million, up by 0.6 per cent from last year. The increase in income was mainly due to rental growth from the existing property portfolio.Net profit for the period was $183.1 million, including $69.9 million in gains in the fair value of investment properties. This compares with net profit last year of $223.8 million – which included gains of $111.3 million in the fair value of investment properties. BWP declared a final distribution of 9.03 cents per ordinary unit and will be made on 24 August 2018 to unitholders.
Figures released today revealed that property prices continued to retreat in July. National dwelling values dropped 0.6 % in the last month, the biggest decline since September 2011 according to CoreLogic. Home prices have now fallen for 10 consecutive months led by declines in Sydney and Melbourne. The Aussie dollar rose from overnight lows near US74.04 cents to highs near US74.40 cents. In early Asian trade the local unit was at US74.10.
Published by CommSec