EY rebuts Bonitas' claims about RFF, Trade war hopes: Aus shares close 0.5% higher

Market Reports

by Jessica Amir

A breath of fresh air for markets - A positive day of trade for most Asian markets, including the Aussie share market. All this comes after US President Donald Trump said at the G-7 summit on Monday that China sincerely wants to make a trade deal with America.

In other news the yuan to USD is stronger than what markets are expecting, and most local sectors rose except, Energy, REITs, and Staples which are lower.

Overnight in the states, Wall Street clawed back up on the potential US-China trade deal - the Nasdaq rose 1.3 per cent and the S&P 500 gained 1.1 per cent, after respectively losing 3 per cent and 2.6 per cent on their prior session (on Friday).

At the closing bell the S&P/ASX 200 index closed 31 points higher to finish at 6,471.

Futures market

Dow futures are suggesting a fall of 76 points.
S&P 500 futures are eyeing a fall of 8 points.
The Nasdaq futures are eyeing a fall 26 points.
And the ASX200 futures are eyeing a 0.5 per cent rise.

Company news

Remote communication and IT company, Speedcast International (ASX:SDA) announced its Chairman, since the company’s IPO in July 2014, resigned with immediate effect. It comes as the company reported a swing of 35,000 per cent into loss after tax territory, with a loss of $175.6 million, on the back of $154.8 million impairment of goodwill relating to the performance of the non-Government operating segment. However, its revenue rose 17 per cent. No interim dividend was declared half year ended 30 June 2019. Following Chair, John Mackay's resignation, Stephe Wilks has been hired as Chairman elect. Shares in Speedcast International (ASX:SDA) closed 32.9 per cent lower at $1.13.

Medical infection control company, Nanosonics (ASX:NAN), reported its full year result to 30 June 2019 with record sales of $84.3 million, that’s a rise of 39 per cent on the same time last year. NAN has expanded its distribution agreement with GE. Profit after income tax grew 137 per cent higher to $13.6 million, while its EBIT rose 260 per cent to $15.5 million.

Citi has analysed Wesfarmers (ASX:WES) results, maintaining its sell rating of the stock with a 12 month price target of $33.80. Wesfarmers full year results showed ‘solid earnings’, supported by Bunnings, amid a challenging market. WES delivered continuing operating EBIT growth of 2.3 per cent YOY growth and in-line with Citi’s expectations (of $2.8 billion result). Its final dividend of 78cps came in 4 per cent below Citi’s expectations (81cps).

Rural Funds (ASX:RFF) released an unbiased report from EY following the short seller, Bonitas Research reported released on 6 August, which caused RFF’s shares to drop 42 per cent on that day, as Bonitas alleged the value of RFF’s business was zero. EY’s independent investigation found ‘the assertions contained within the document are not substantiated’. Clayton Utz will commence legal action against Bonitas Research LLC for its deliberate and malicious publication of the document. And as promised, RFF’s financial showed growth in net assets value per share, from $1.68 to $1.80 on an adjusted basis. Profit after tax grew $33.4 million from $29.895 million in the 12 months to 30 June 2019,


Software-as-a-service company, AppsVillage Australia (ASX:APV) started trading today. It issued shares $0.20, opened at $0.27 and closed at $0.215.

Best and worst performers of the day

The best performing sector was Information Technology, adding 3.2 per cent while the worst performing sector was Energy, shedding 0.4 per cent.

The best performing stock in the S&P/ASX 200 was Nanosonics (ASX:NAN), rising 32.7 per cent to close at $6.50. Shares in Afterpay Touch Group (ASX:APT) and Bravura Solutions (ASX:BVS) followed higher.

The worst performing stock in the S&P/ASX 200 was Speedcast International (ASX:SDA) dropping 32.9 per cent to close at $1.13. Shares in Inghams Group (ASX:ING) and Northern Star Resources (ASX:NST) followed lower.

Asian markets

Mixed: Japan’s Nikkei has gained 1 per cent, Hong Kong’s Hang Seng has lost 0.3 per cent and the Shanghai Composite has gained 1.2 per cent.

Commodities and the dollar

Gold is trading at US$1,534 an ounce.
Iron ore price is trading 3.3 per cent lower at US$84.91.
Iron ore futures are pointing to a fall of 2.2 per cent.
Light crude is US$0.37 down at US$53.80 a barrel.
One Australian dollar is buying 67.61 US cents.

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