Challenger drops on downgraded earnings: ASX tracking 0.3% lower at noon

Market Reports

by Rachael Jones

The Australian share market opened lower following soft leads from Wall Street and is now tracking 0.3 per cent lower at noon. Investment management company Challenger (ASX:CGF) has seen a fall in their shares after it downgraded its earnings today, citing market volatility in the first half of 2019. They said earnings had been hit by lower Funds Management performance fees, which were $2 million in 1H19 and were $4 million lower than the prior corresponding period. Northern Star Resources (ASX:NST) and Syrah Resources (ASX:SYR) also performed poorly. As for the sectors, the Real Estate Investment Trust sector is leading the way and the Energy sector trailing behind.

Broker upgrades

Citigroup continue to maintain a Buy rating for BHP (ASX:BHP) with a price target of $38/share following December Quarter production. Production was marginally weaker quarter on quarter and BHP provided a long list of items impacting 1H FY19 profit. The S&P/ASX 200 index is 16 points down at 5843. On the futures market the SPI is 15 points lower.

Company news

Western Areas (ASX:WSA) is pleased to report solid progress across the Company’s various activities during the December quarter. Operational cashflow for the quarter totalled $18.2m (September quarter A$24.8). Absolute operating costs remained in line with the prior quarter, however revenue was lower due to the lower average nickel price for the quarter of $6.89/lb. Shares in Western Areas (ASX:WSA) are trading 3 per cent lower at $2.10.

The company secretary of aged-care provider Estia Health (ASX:EHE) has resigned.Leanne Ralph of BoardRoom will leave immediately and Suzy Watson will take over as company secretary. The Board would like to thank Ms Ralph for her contribution to the Company and welcome Ms Watson. Shares in Estia Health (ASX:EHE) are trading 0.7 per cent higher at $2.21

Best and worst performers

The best performing sector is Real Estate Investment Trust adding 0.7 per cent, while the worst performing sector is Energy, shedding 1.8 per cent.

The best performing stock in the S&P/ASX 200 is Costa Group Holdings (ASX:CGC), rising 3.8 per cent to $5.36, followed by shares in Ansell (ASX:ANN) and Saracen Mineral Holdings (ASX:SAR).

The worst performing stock in the S&P/ASX 200 is Challenger (ASX:CGF), dropping 14.3 per cent to $7.92, followed by shares in Northern Star Resources (ASX:NST) and Syrah Resources (ASX:SYR).

Commodities and the dollar

Gold is trading at $US1,284 an ounce.
Iron ore price fell 1.5 per cent to $74.78.
One Australian dollar is buying 71.22 US cents.