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The local share market started the session with solid gains, continuing the momentum of the previous two sessions of improvements. Local investors were encourage by the performance of US stocks overnight, which rose to new record highs. Northern hemisphere investors were encouraged by reports that the rate of coronavirus cases in China had moderated. However late morning trade local time, saw the market ease from the earlier highs on conflicting Coronavirus news. Wires services reported that Chinese health authorities had made a substantial upward
revisions to the number of detected Coronavirus cases.

In early afternoon trade Utilities led the sectors gains, helped by a 4% gain for AGL (AGL) shares.The energy retailer reported a Net Profit gain of 11.4% in the first half of the year to $323mln, although Underlying Profit after tax fell 19.6% to 432mln. Revenue eased by 0.4% to $6.3bln. The group declared an interim dividend of $0.47 cents per share, a fall of 14% compared to the same time last year. Investors were encouraged by the outlook offered by the group that pointed earnings ‘tracking to upper half of range for Underlying Profit after tax of $780mln to $860mln. Property Trusts advanced as a whole, led by a 5% gain in Goodman Group (GMG) shares, after the logistics property group upgraded full year earnings per share (EPS) forecasts. GMG expects EPS growth of 11% to 57.3 cents, compared to 56.3 cents in the previous corresponding period. Net Profit profit fell 13% to $810.6mln, while revenue dropped 23% to $1.39bln. The group will pay an interim distribution of 15.0 cents per stapled security.

The Consumer Discretionary group was also well supported as a whole. Within the sector Breville Group (BRG) led the advances, gaining 18% after reporting encouraging results which included an 11% increase in its interim dividend to 20.5 cents per share. The home appliance maker said that Net Profit rose by 14 to $49.7mln, in addition to revenue increasing 25% to $522mln. BRG said that all regions and categories of products – beverages, cooking and food preparation- posted double-digit growth helped by the global roll out of the coffee maker, Barista Pro, and the Bluicer and the launch of a new microwave range in North America

Telstra (TLS) reported a first half Net Profit, that met the market’s expectations, albeit with a fall of 6.4% to $1.2 billion. Telstra’s underlying earnings before interest & tax (EBITDA) fell 6.6% to $3.9 billion. The NBN rollout remained a headwind as sales costs from access payments jumped by $204 million or 32.9% while nbn migration also impacted its fixed-line revenue, which fell 10.9% to $2.4 billion .Although more encouraging was that underlying EBITDA, which rose for the first time since FY16 an increase of approximately $90 million. The telco will be pay shareholders a fully franked interim dividend of 8 cents per share, made up of an ordinary dividend of 5 cents per share and a special dividend of 3 cents per share, which will be paid on 27 March. Initially the shares rose in response to the result, although the positive momentum was stymied by news that approval had been granted for the merger of TPG (TPM) & Vodafone Australia. The Federal Court approved the transaction late morning, with TPG suggesting a result could be completed by the middle of the year if the deal successfully navigates all of the relevant approvals. TPM shares surged on the news to be 13% higher in early afternoon trade, while the prospect of increased competition for TLS saw the telco shares 2.2% lower.

The Aussie dollar rose overnight from near US67.20 cents to around US67.50 cents, although the local unit fell at lunchtime on the latest.

Published by CommSec