New 12-year highs on Coalition win, ASX hits 6,478 pts: Aus shares up 1.3% at noon

Market Reports

by Jessica Amir

The Australian share market jumped at the open, reaching almost 12-year highs after banks have seen monumental gains on the Liberals surprise election victory at the weekend.

Earlier the main gauge for the market hit 6,478 points, a level we last hit in December 2007.

We have seen Westpac (ASX:WBC) shares jump 7.2 per cent, NAB (ASX:NAB) jumping 6.7 per cent, ANZ (ASX:ANZ) up 6.8 per cent and The Commonwealth Bank of Australia (ASX:CBA) up 5.5 per cent.

It comes as banks have been sold off over much of May with the Financial sector losing about 6 per cent from this month to Friday, and today it’s recouped most of those losses.

It’s also important to note, the ASX is defying Wall Street’s negative leads from Friday after the tech heavy Nasdaq fell the most, 1 per cent amid China-US trade talks stalling.

The S&P/ASX 200 index is 1.3 per cent or 85 points higher at 6,451. On the futures market the SPI is 101 points higher.

Broker moves

Citi has issued a research report saying Rio (ASX:RIO) can expand more cost effectively. Citi has advised Rio’s Koodaideri iron ore mine in the Pilbara could provide an extra 30 mtpa of capacity. Citi says Rio’s Cape Lambert port could add 400 mtpa in capacity. Citi also expects the extra capacity will deliver an over 20 per cent internal rate of return. Citi’s target price for RIO is $104.00. It’s trading at $102.30, or 0.9 per cent higher.

Citi has considerably upped its 12 month target price for Xero (ASX:XRO) from $44.60 to $61.50 on the back of the company’s solid FY19 results, with organic revenue of 29 per cent. Citi increased its expected EBITDA for FY20 by 3 per cent, while it dropped the FY21 and FY22 EBITDA forecast by 4 and 5 per cent, reflecting higher investment in sales, marketing and development. It’s traded 2.5 per cent lower at $59.80

Company news

Asset manager, Blue Sky Alternative Investments (ASX:BLA) has gone into receivership with the appointment of investment and advisory firm, KordaMentha as the receivers and managers. Bradley Hellen and Nigel Markey of Pilot Partners have also been appointed as Voluntary Administrators of the company. Its shares have also been suspended from the ASX. Over the year its shares have fallen 93 per cent. It last traded at $0.18.

Aurora Dividend Income Trust has announced a $19.6 million takeover offer for chocolate education company Yowie Group (ASX:YOW), offering to buy its shares via an all scrip takeover bit at $0.09 per share. That’s a 17 per cent premium to YOW’s recent closing price of 7.7 cents. If implemented, YOW shareholders will receive Aurora Dividend Income Trust (ADIT) units. Shares in Yowie Group (ASX:YOW) are trading 1.3 per cent higher at $0.08 at noon. Over the year its shares have lost over 8 per cent.

Best and worst performers

The best-performing sector is S&P/ASX Financials, adding 5 per cent, while the worst performing sector is S&P/ASX Industrials, shedding 1.1 per cent.

The best performing stock in the S&P/ASX 200 is nib Holdings Limited (ASX:NHF), rising 11.3 per cent to $6.55. followed by shares in Medibank Private Limited (ASX:MPL) and Westpac Banking Corporation (ASX:WBC).

The worst performing stock in the S&P/ASX 200 is Nearmap Ltd (ASX: NEA), dropping 4.7 per cent to $3.65, followed by shares in Webjet Limited (ASX:WEB) and Bluescope Steel Limited (ASX:BSL).

Asian markets

Asian markets are trading mixed: Tokyo’s Nikkei added 0.5 per cent, Hong Kong’s Hang Seng is down 0.3 per cent, and China’s Shanghai Composite has lost 1.1 per cent.

Commodities and the dollar

Gold is trading at US$1,278 an ounce.
Iron ore price rose 2.5 per cent to US$101.71
Iron ore futures are pointing to a rise of 1.2 per cent.
One Australian dollar is buying 69.12 US cents.