Bingo upgraded, Challenger firms Japanese alliance, WES eyes LYC: Aus shares flatlining at noon

Market Reports

by Jessica Amir

The Aussie share market is having a fairly volatile session today after losing 1.1 per cent yesterday. Today we have had more lacklustre leads from Wall Street with investors concerned about US economic growth.

The S&P/ASX 200 index is 1 point or 0.02 per cent lower at 6,125. On the futures market the SPI is 8 points higher.

Best and worst performers

So far about half of the sectors are in the black with A-Reits leading rising 1.1 per cent, followed by Utilities which has added 0.8. per cent higher.

While Consumer Discretionary is leading the drag falling 1.5 per cent, followed by Energy, losing 1.4 per cent.

The best performing stock in the S&P/ASX 200 is Challenger (ASX:CGF), rising 7.4 per cent to $7.83, followed by shares in Bingo Industries Limited (ASX:BIN) and St Barbara (ASX:SBM) which is continuing to rally after yesterday's GS upgrade. 

The worst performing stock in the S&P/ASX 200 is Wesfarmers (ASX:WES), dropping 3.2 per cent to $33.87 after making a $1.5 billion proposal to buy rare earths company Lynas Corp (ASX:LYC) , followed by shares in Whitehaven Coal (ASX:WHC) and Pinnacle Investment Management Group Limited (ASX:PNI).

Broker upgrades/downgrades

Bingo Industries (ASX:BIN) has been reinstated as a buy by Goldman Sachs on the company completing a ‘game-changing acquisition’ of Dial a Dump Industries (DADI. Goldman Sachs (GS) says the DADI Eastern Creek landfill site is of strategic significance, given some of Sydney’s other dry waste landfills are due to close in upcoming years, while approval for new landfill is likely to be difficult. Goldman Sachs price target is $2.40 implying a 65 per cent total return for Bingo Industries (ASX:BIN).

Company news

Investment management firm and annuity provider, Challenger (ASX:CGF) has announced it’s expanded its strategic relationship with Japanese insurance company, MS&AD Insurance Group Holdings (MS&AD) to foster local and international growth. The Asian firm will provide Challenger with annual reinsurance of at least ¥50 billion ($640 million) for a minimum of five years, via Australian and US dollar annuities. MS&AD plans to increase its stake in Challenger to over 15 per cent while Challenger will start reinsurance of US dollar annuities in Japan via an MS&AD subsidiary (Mitsui Sumitomo Primary Life Insurance Company Limited (MS Primary)) from 1 July 2019. After that the Japanese firm will nominate a non-exec direction to join Challenger’s board. Shares Challenger (ASX:CGF) are trading 7.5 per cent higher at $7.83 at noon.

Small-cap lithium exploration company, Lake Resources (ASX:LKE) has contracted drilling rig major, Foraco International SA to expand its drilling capacity and depth potential at its 100Cauchari Lithium Brine Project. And now two rigs are operational at Cauchari. Shares Lake Resources (ASX:LKE) are trading 1.9 per cent lower at $0.05 at noon.

Commodities and the dollar

Gold is trading at US$1,321 an ounce.
Iron ore price fell 0.2 per cent to US$85.81
Iron ore futures are pointing to a rise of 0.3 per cent.
One Australian dollar is buying 71.19 US cents.