Ausdrill investigates fraud: Aus shares close 0.3% lower

Market Reports

by Katrina Bullock

We opened higher this morning following positive leads from the US however we lost momentum, took a dip midsession and eased off over the afternoon to close 0.3 per cent lower. Most sectors were in the red, with only two sectors – Communications and Financials managing to make some ground. Diversified mining play, Ausdrill (ASX:ASL) is investigating potential fraud in its supply chain – more on that to come.

The S&P/ASX200 index

At the closing bell the S&P/ASX 200 index closed 21 points lower to finish at 6,256.

Broker moves

Citi has reiterated its decision to sell vitamin producer Blackmores (ASX:BLK) following their announcement yesterday that profits for the third quarter of 2019 fell 43 per cent compared to the prior corresponding period. Citi says they will maintain the sell position until they see improvements in the company's China distribution execution, marketing and new product development. Shares in Blackmores (ASX:BLK) closed 6.5 per cent higher at $94.

Goldman Sachs has upgraded Cochlear (ASX:COH) to a buy with a 12 month price target of $197. This follows the company's launch of the Nucleus Profile Plus Series cochlear implant yesterday. Shares in Cochlear (ASX:COH) closed 0.7 per cent lower at $179.50

Futures market

Dow futures are suggesting a rise of 22 points.
S&P 500 futures are eyeing a rise of 4 points.
The Nasdaq futures are eyeing alift of 17 points.
And back home the ASX200 futures are eyeing a 27 point fall tomorrow.

Economic news

Australian Bureau of Statistics data shows that employment in Australia's solar energy sector increased 210 per cent in the 2017 to 2018 financial year. The number of full time equivalent jobs related to renewable energy activity grew by 28 per cent with rooftop solar employment being the main driver in the sector, accounting for 46 per cent of the jobs.

The Commonwealth Bank released its business sales indicator for March which shows that economy-wide spending rose by 0.7 per cent following a similar lift in February. It continues to track above the 0.4 per cent long term average monthly growth pace.

Company news

Diversified mining play, Ausdrill (ASX:ASL) says that a preliminary internal investigation has revealed a number of potentially fraudulent payments to a supplier. An Australian-based employee appears to have authorised and concealed payments to an unrelated invalid supplier totalling approximately $10 million over eight years. The employee has been dismissed. Ausdrill has reported the matter to the police who will work in consultation with EY to commence a thorough forensic review. Ausdrill says the controversy will have no material impact on its reported results or guidance for the 2019 financial year. Shares in Ausdrill (ASX:ASL) closed 1.8 per cent lower at $1.66.

Yancoal Australia (ASX:YAL) reported attributable sales volume of 8.8 megatonnes for the first quarter of 2019, up 11 per cent year on year.

Zinc oxide and aluminium oxide production and distribution company, Advance Nanotek (ASX:ANO) has started production trials on two new ovens.

Spark Infrastructure Group (ASX:SKI) has purchased the Bomen Solar Farm near Wagga Wagga in NSW from Renew Estate.

Global software company LiveTiles (ASX:LVT) has penned a strategic partnership agreement with Zegami, to launch an intelligent visual data analytics capability.

The board of paint and coating provider DuluxGroup (ASX:DLX) has unanimously recommended an acquisition proposal valued at around $3.8 billion from Nippon Paint Holdings.

Diversified financial service provider, Eclipx Group (ASX:ECX) has announced the retirement of Chief Financial Officer and an Executive Director, Garry McLennan.

Best and worst performers of the day

The best performing sector was Communications adding 1.6 per cent while the worst performing sector was Materials, shedding 1.9 per cent.

The best performing stock in the S&P/ASX 200 was DuluxGroup (ASX:DLX) following a 3.8 billion acquisition proposal from Nippon Paint Holdings. DuluxGroup (ASX:DLX) rose 27.1 per cent to close at $9.75. Shares in Blackmores (ASX:BLK) and Syrah Resources (ASX:SYR) followed higher.

The worst performing stock in the S&P/ASX 200 was Fortescue Metals Group (ASX:FMG),dropping 8.3 per cent to close at $7.43. Shares in Afterpay Touch Group (ASX:APT) and Wisetech Global (ASX:WTC) followed lower.

Asian markets

Higher:Japan’s Nikkei has added 0.3 per cent, Hong Kong’s Hang Seng has added 0.1 per cent and the Shanghai Composite hasgained 0.3per cent.

Commodities and the dollar

Gold is trading at US$1,280 an ounce.
Iron ore price fell 0.7 per cent to US$94.78.
Iron ore futures are pointing to a fall of 3.9 per cent.
Light crude is 78 cents up at US$64.46 barrel.
One Australian dollar is buying 72 US cents.