Wesfarmers downgraded: ASX200 up 1.6% over week

Market Reports

by Katrina Bullock

The majority of sectors have made ground today, with the Real Estate, Communications and Consumer Discretionary sectors leading the way. After opening in the red, the ASX200 gained momentum this morning, and has been tracking sideways this afternoon to gain 0.5 per cent.

The S&P/ASX200 index

At the closing bell the S&P/ASX 200 index closed 28 points higher to finish at 6,167.

Over the week, the market has gained 101 points or 1.6 per cent.

Broker moves

Citi has downgraded Wesfarmers (ASX:WES) to a sell with its 12-month price target dropping from $29.40 to $29.00. Citi says Wesfarmers is now reliant on Bunnings and Kmart for growth, with both being 'mature, low-growth businesses'. UBS have also downgraded Wesfarmers, from a hold to a sell, with a 12-month price target of $32.60.

Futures market

Dow futures are suggesting a fall of 19 points.
S&P 500 futures are eyeing a dip of 3 points.
The Nasdaq futures are eyeing a fall of 11 points.
The ASX200 futures are eyeing a 32 point rise on Monday morning

Economic news

Philip Lowe, the Governor of the Reserve Bank of Australia, gave testimony to parliament today that declining house prices are not expected to derail Australia's economy. He noted that the falling share market in December, the IMF's weaker growth forecasts and the decline in house prices have all contributed to negative sentiment.

Company news

Property major, Charter Hall Group (ASX:CHC), announced its half year results for the period to 31 December 2018. Its net statutory profit after tax was $133.5 million, an increase of 10.7 per cent on the prior corresponding period. This beat Citi's forecast of 95 million. In more good news for the company, its revenue strengthened to 126.2 million, a lift of 24.8 per cent on the prior corresponding period. Their EBITDA increased 19 per cent to $134.2 million, compared to the first half of the 2018 financial year. Shares in Charter Hall Group (ASX:CHC) closed 1.3 per cent higher at $8.87.

Village Roadshow (ASX:VRL) released its results for the same period. Net profit after tax was higher than Citi's expectation, coming in at 12.8 million. Revenue also increased to 149.6 million, and EBITDA was up 31 per cent on the prior corresponding period to 65 million. The board intends to reinstate dividends at the full year if performance continues to meet expectations. Shares in Village Roadshow (ASX:VRL) closed 1.9 per cent higher at $3.29.

AuStar Gold (ASX:AUL) has clarified that it has no connection to the owners or operators of the recently troubled Good Friday Mine in New South Wales.

Pharmaceutical company, Mayne Pharma Group (ASX:MYX) are one of the ASX's worst performers today after the release of their half year results showing underlying net profit after tax was up 35 per cent to $21.1 million compared to the prior corresponding period.

Ardent Leisure Group (ASX:ALG) has recorded a net loss after tax of $21.8 million for the period ended 25 December 2018. Results continue to be impacted by Dreamworld incident costs due to the coronial inquest as well as various restructuring and other non-recurring costs in Main Event, Theme Parks and Corporate.

Online retailer Kogan.com (ASX:KGN) today announced financial results for the half year ended 31 December 2018. Results showed net profit after tax of $7.4 million, down 11 per cent on the last half year from $8.3 million. This comes despite the surge in sales they saw over the Christmas period.

IPO

Mediland Pharm, (ASX:MPH) started trading today. The retail outlet operator floated with an issue price of 20 cents, opened at 25 cents and it closed at 21 cents.

Best and worst performers of the day

The best performing sector was Real Estate adding 1.6 per cent while the worst performing sector was Energy shedding 1.7 per cent.

The best performing stock in the S&P/ASX 200 was Invocare (ASX:IVC), rising 12 per cent to close at $14.09. Shares in Automotive Holdings (ASX:AHG) and Pact Group Holdings (ASX:PGH) followed higher.

The worst performing stock in the S&P/ASX 200 was Saracen Mineral Holdings (ASX:SAR),dropping 5.3 per cent to close at $2.69. Shares in Mayne Pharma Group (ASX:MYX) and Sandfire Resources (ASX:SFR) followed lower.

Asian markets

Mixed:Japan’s Nikkei has lost 0.3 per cent, Hong Kong’s Hang Seng has also lost 0.3 per cent and the Shanghai Composite has gained 0.03 per cent.

Wall Street

Wrapped up our four trading days this week lower: The Dow Jones lost 0.1 per cent, The S&P 500 lost 0.03 per cent and the tech heavy Nasdaq lost 0.2 per cent.

Commodities and the dollar

Gold is trading at US$1,325 an ounce.
The Iron ore price fell 1.5 per cent to US$86.68. Its futures are pointing to a fall of 1.6 per cent.
Light crude is US$0.32 lower at US$56.84 barrel.
One Australian dollar is buying 70.93 US cents.