ASX claws back, CBA sees more remediation costs: Aus shares gain 0.4%

Market Reports

by Jessica Amir

The Australian share market gained 0.4 per cent today, clawing back up from its two-year low it hit yesterday, a point the local bourse last hit on 19 December 2016.

Over half of the sectors led the clawback with Healthcare continuing to rise higher for the year, somewhat recovering from its fall yesterday.

At the closing bell the S&P/ASX 200 index closed 23 points higher, or 0.4 per cent higher, to finish at 5,576.

Futures market

Dow futures are suggesting a fall of 71 points.
S&P 500 futures are eyeing a dip of 8 points.
The Nasdaq futures are eyeing fall of 23 points.
And the ASX200 futures are eyeing a 30-point rise tomorrow morning

Company News

The Commonwealth Bank of Australia (ASX:CBA) received $135 million in professional indemnity insurance recoveries for civil penalty and legal costs for the 2018 financial year. At the same time, it also advised its half-year results, ending 31 December 2018 will be hampered by a $100 million provision for higher than expected financial crime compliance. This is on top of the previously announced remediation provisions for Credit Card Plus, Personal Loan Protection and Home Loan Protection insurance. On top of that, Pending the demerger of CBA’s wealth management and mortgage broking businesses (NewCo), $200 million will be held as an indemnity provision for historical remediation issues. And, as previously announced, the $1.5 billion sale of CFS Global Asset Management to Mitsubishi UFJ Trust and Banking Corp is set to complete mid-year 2019. Shares in CBA closed 0.23 per cent higher at $68.43.

Insurance company, QBE (ASX:QBE) announced a three-year cost-saving of $130 million via an operational efficiency program, and also advised its expense ratio will be about 14 per cent in 2021.

Cooper Energy (ASX:COE) advised its rectified the pipeline damage and completed a successful pressure test at its Sole gas project off Victoria Australia, after it was damaged from the sea floor. Shares in Cooper Energy (ASX:COE) are about 44 per cent higher year-on-year.

Australian property development company, Stockland (ASX:SGP) responded to media speculation and has confirmed it is in negotiations to sell its residential project, The Grove in Melbourne. The group says while negotiations are ongoing there is no certainty a sale will come to fruition. Year-on-year its shares are trading per cent about 20 per cent lower. Staying in the property space, Charter Hall Retail REIT (ASX:CQR) shares have gained about 7 per cent year-on-year and Shopping Centres Australasia Property Group (ASX:SCP) share have added about 10 per cent.

Best and worst performers of the day

The best performing sector was Health Care adding 1.7 per cent while the worst performing sector was Utilities, shedding 0.4 per cent.

The best performing stock in the S&P/ASX 200 was New Hope Corporation (ASX:NHC), rising 7.9 per cent to close at $3.40. Shares in TPG Telecom (ASX:TPM) and Saracen Mineral Holdings (ASX:SAR) followed higher.

The worst performing stock in the S&P/ASX 200 was Sigma Healthcare (ASX:SIG), dropping 6.9 per cent to close at $0.41. Shares in QBE Insurance Group (ASX:QBE) and Bingo Industries (ASX:BIN) followed lower.

Asian markets

Mixed. Japan’s Nikkei has lost 0.4 per cent, Hong Kong’s Hang Seng is flat, and the Shanghai Composite has gained 0.3 per cent.

Commodities and the dollar

Gold is trading at US$1,247 an ounce.
Iron ore price fell 0.6 per cent to US$66.12 and its futures are pointing to a fall of 0.3 per cent.
Light crude is $1.72 down at $US50.89 a barrel.
One Australian dollar is buying 72.08 US cents.

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