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Local shares have started the new trading week in a subdued manner with both buyers and sellers showing limited conviction. The ASX 200 opened flat before trading to a 14 point gain in the first half hour of the session. Thereafter, momentum faded and the Index traded at a 4 point deficit at the worst levels of the morning.
Telecoms and Utilities names led the declines in early trade, followed by Energy. Healthcare was the most improved, along with Consumer Staples. Financials were benign in their contribution, with the sub-index flat at lunchtime.
Northern Star (NST) was one of the most improved names in the ASX 200, with a gain of 18% or $1.25 to $8.11 having concluded a successful capital raising. The gold miner returned from a trading halt having completed a $175m fully-underwritten placement to institutional investors. The proceeds will fund the purchase of the Pogo underground gold mine in Alaska. As result, NST increased its FY2019 guidance to 850,000-900,000oz at an all in sustaining cost (AISC) of A$1,050-1,150 per ounce.
Shares in Bega Cheese (BGA) were one cent lower at $7.82 after confirming the purchase of a stake in Capilano Honey (CZZ). The cheesemaker confirmed on Monday it had spent $5.38 million on the purchase of 255,291 CZZ shares on Friday, at an average price of $21.08. BGA’s stake in CZZ has risen to 5.76% at a time the honey producer has been forced to defend the quality of its products in the face of accusations that Allowrie-branded Mixed Blossom Honey packaged by the group contained substances other than honey. CZZ has been the subject of takeover speculation, after receiving a bid from private equity group Wattle Hill in recent weeks.
Dairy companies with a focus on China have seen volatile trade on Monday, after the Chinese Government passed a new legal framework governing e-commerce in China on Friday. The new e-commerce laws will come into effect from 1 January 2019 and according to an announcement made by A2 Milk (A2M), will cover e-commerce operators, contracts, dispute resolution and promotion. The aim of the changes is to protect the rights and safety of consumers and the integrity of e-commerce trade. The prospect of tightened regulation and greater oversight has seen mixed fortunes for the various operators. A2 Milk (A2M) shares were 2% or 25 cents higher at $11.75; Bellamy’s (BAL) shares were lower by 4% or 56 cents at $10.39; Bubs (BUB) shares were 5% or 4 cents lower at 67 cents, Wattle Health (WHA) shares were down 3% or 4 cents to $1.22.
Major currencies were weaker against the US dollar at the weekend, including the Aussie dollar. The local unit has trended lower on Monday after falling from highs near US72.60 cents to lows near US71.75 cents at the weekend. The $AUD was trading near US71.80 cents in early Asian trade. In economic news, retail sales were flat in July, after a better results in the past three months. Annual growth is 2.9%, just below the year long average.
Published by CommSec
CommSec Daily Report Monday
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