Soft start to FY19 Aus shares close 0.3% lower

Market Reports

by Jessica Amir

The Australian share market started the trading year on soft note today, losing about 0.3 per cent, with about half of the sectors closing in the red. Last financial year the Aussie stock market’s main index (S&P ASX200) gained 8.3 per cent with the mining sector strengthening its muscle.

The biggest stock drag came from Sigma Healthcare (ASX:SIG) after Chemist Warehouse didn’t renew its contract. (new in a sect). But as a collective, the consumer discretionary, energy and staples saw the most selling today.

While miners also ended in the red, despite the iron ore price gaining almost one per cent to to US$65.02, and its futures are pointing to fall of 1.9 per cent

At the closing bell the S&P/ASX 200 index closed 17 points, or 0.3 per cent lower to finish at 6,178.

Futures market

The Dow futures are suggesting a fall of 177 points up.
And the ASX200 futures are eyeing a 11 point fall.

Value of trades

$3.5 billion on volume of 539 million shares at the close of trade. The top three stocks by value were BHP Billiton Limited (ASX:BHP), ANZ (ASX:ANZ) and Commonwealth Bank of Australia (ASX:CBA).

Economic news

Manufacturing activity rose more than expected in June, ending the financial year on a high, according to the Australian Industry Group’s (AIG) data. The Australian Performance of Manufacturing Index hit 57.4, surprising economists who expected manufacturing would have slowed to a reading of 56.5. Despite the index slightly falling from the prior reading, it was the sector’s 21st month of growth.

Company news 

Orocobre (ASX:ORE) reported its second highest ever production in the June quarter of 3,600 tonnes. That’s a rise of almost 30 per cent on the prior quarter. It’s sales revenue also hit a record US$47.6 million for the quarter, taking total revenue to US$152 million for the fiscal/financial year, that’s 27 per cent more than the prior corresponding period and another new record. It comes as it had a stellar financial year with production and average price received. Shares in Orocobre (ASX:ORE) closed over 5 per cent higher at $5.43.

Retail pharmacy business, Sigma (ASX:SIG) shares tumbled today, shedding over 40 per cent after it announced its contract with My Chemist and Chemist Warehouse Group will not be extended. It announced amid ‘softer market conditions’ its underlying EBIT will be between $40 million and $50 million in FY20. But for FY18/19 it should be about $75 million.

Meantime, Pharmaceutical company EBOS Group (ASX:EBO) flexed its muscle, winning the exclusive five-year supply agreement, to distribute pharmaceutical products to over 400 Chemist Warehouse and My Chemist stores in Australia, which should generate over $1 billion in revenue for EBOS in the first year, with the deal coming into effect 1 July 2019.

Automotive Holdings Group (ASX:AHG) revealed HNA International (HNA) terminated its agreement to buy the Company’s Refrigerated Logistics business. AHG recently announced that FIRB approval for the transaction had not yet been obtained by HNA, and a decision was pending

Village Roadshow (ASX:VRL) inked a deal to sell its wholly owned Wet‘n’Wild Water Park in Western Sydney to Parques Reunidos, for $40 million, plus variable compensation depending on the Park’s revenue performance up to 30 June 2020. The sale will result in a pre-tax loss of about $25 million in its FY2018 results.

IPOs

Semi-prepared meal provider, Marley Spoon AG's (ASX:MMM) started trading today, floating with an issue price of $1.50, opening at $1.25 and it closed at $1.20

Developer and provider of gas flow control solutions to the semiconductor industry, Pivotal Systems Corporation Inc. (ASX:PVS) started trading today, floating with an issue price of $1.86, opening at $2.40 and it closed at $2.59.

Best and worst performers of the day

The best performing sector was REITS adding 0.45 per cent while the worst performing sector was consumer discretionary, shedding 0.9 per cent.

The best performing stock in the S&P/ASX 200 was Orocobre Limited (ASX:ORE), rising 5 per cent to close at $5.45. Shares in Wisetech Global Limited (ASX:WTC) and Infigen Energy (ASX:IFN) followed higher.

The worst performing stock in the S&P/ASX 200 was Sigma Healthcare Limited (ASX:SIG), dropping 40.1 per cent to close at $0.48. Shares in Automotive Holdings Group (ASX:AHG) and Australian Pharmaceutical Industries Limited (ASX:API) followed lower.

Asian markets 

Japan’s Nikkei has lost 2.4 per cent, Hong Kong’s Hang Seng is closed due to public holiday, and the Shanghai Composite has lost 1.8 per cent.

Commodities and the dollar

Gold is trading at $US1,248 an ounce.
Light crude is $0.70 up at $US74.15 barrel.
One Australian dollar is buying 73.76 US cents.

Cryptocurrencies

Some of the most traded cryptocurrencies are trading lower: Bitcoin trades at US$6,320, Ethereum trades 1.2 per cent lower US$448 and EOS is about 1 per cent lower at US$7.95.