Snaps 6-day run on Healthcare selling: Aus shares dip 0.2% at noon

Market Reports

by Jessica Amir

The Australian share market has snapped its six-day run, entering into negative territory and is 0.2 per cent lower at noon with Healthcare losing the most, about 1 per cent and leading half to the sectors lower at noon. Year-on-year though, the health sectors has been boding well and hit a peak in September.

Broker moves

Westpac (ASX:WBC) reported a 1 per cent lift in its net profit after tax attributable to shareholders, to $8.1 billion for the year ending 30 September 2018. Its revenue rose 2 per cent to $22 billion with a final and interim dividend of 94 cents fully franked (each period). The results were broadly in line with expectations. Bell Potter has maintained its hold recommendation on the stock. Westpac is trading flat at noon.

And following this Ernst & Young has analysed Australia’s major banks, saying they’re seeing a profit squeeze of 5.5 per cent, compared to 2017’s full-year results of a combined $29.5 billion in cash earnings. On top of that, combined return on equity has fallen by 12.2 per cent for the Aussie major banks, on the back of increased remediation and compliance costs.

The S&P/ASX 200 index is 11 points or 0.2 per cent lower at noon at 5,838. On the futures market the SPI is 8 points lower.

Local economic news

Australia’s services sector slowed in October, falling 1.4 points to a reading of 51.1, slower growth than September and the average in 2018. It also came as a surprise as the sector was expected to expand from a reading of 52.5 to 53.5. But the reading is still above the 50-point (expansionary territory level) and has been for the 20th month.

Company news

Veterinary services company, Greencross Limited (ASX:GXL) has entered into an implementation agreement with TPG Capital Asia and TPG Growth to take over the firm, buying its shares for $5.55 per share. It implies an equity value of $675 million, with an enterprise value of $970 million. The takeover is subject to a number of conditions and shareholders don’t need to take any action at this point in time. Shares in Greencross Limited (ASX:GXL) are trading 17.4 per cent higher at $5.33 at noon.

Fonterra Shareholders' Fund (ASX:FSF) is considering raising funds via NZ$100 million bond issue, with the ability to accept an extra NZ$50 million in over subscriptions at its discretion. Details will be provided this week with the proceeds to be used for general corporate purposes. The dairy company has already appointed ANZ and CBA as joint lead managers. Shares in Fonterra Shareholders' Fund (ASX:FSF) are trading are steady at noon at $4.45 at noon.

Best and worst performers

The best performing sector is Staples adding 0.4 per cent, while the worst performing sector is Healthcare, shedding 1.1 per cent.

The best performing stock in the S&P/ASX 200 is Syrah Resources (ASX:SYR), rising 4.3 per cent to $1.81, followed by shares in Independence Group (ASX:IGO) and Pact Group Holdings Ltd (ASX:PGH).

The worst performing stock in the S&P/ASX 200 is Emeco Holdings Limited (ASX:EHL), dropping 6.3 per cent to $0.30, followed by shares in The Star Entertainment Group Limited (ASX:SGR) and Appen Limited (ASX:APX).

Commodities and the dollar

Gold is trading at US$1,233 an ounce.
Iron ore price fell 1.7 per cent to US$73.97 and its futures are pointing to a fall of 0.6 per cent.
One Australian dollar is buying 71.97 US cents.

Cryptocurrencies

Bitcoin has gained 1.2 per cent to US$6,432, Ethereum has gained 4.6 per cent to US$209 and Bitcoin Cash has gained 15 per cent to US$557, in the last 24 hours.