Rural Funds Group refutes Bonitas claims: ASX tracking 0.2% higher at noon

Market Reports

by Rachael Jones

The Aussie share market slipped back in the red today, after a muted session on Wall Street overnight. But as the clock approached noon, the benchmark S&P200 appeared to have made inroads and clawed back from early selling, tracking 0.2 per cent higher at noon. In terms of the sectors, utilities are down, AGL Energy (ASX:AGL) dropped almost 6 per cent despite beating expectations for full-year profits. They also plan to buy Perth Energy from Infratil (ASX:IFT). In terms of what happened overnight, investors fled to gold, with the safe heaven commodity price crossing the $1,500 level for the first time in six years after central banks around the globe surprisingly cut rates more than expected. We saw the RBNZ cut rates by 0.5 per cent yesterday, The Reserve Bank of India cut its rate by 0.35 per cent (its fourth cut for the year) and the Bank of Thailand cut its rate by 0.25 per cent for the first time since 2015. We are also seeing bonds hit record lows and PIMCO says US treasury bonds could soon have a negative yield.

The S&P/ASX 200 index is 12 points up 6,532.Yesterday the market gained 0.6 per cent yesterday. At the moment, the futures market the SPI is 0.03 points lower.

Company news

Rural Funds Limited (ASX:RFF) released a statement overnight and held a Webinar this morning with the MD David Bryant rebutting allegations raised in the short seller Bonitas report. RFF shares dropped 42 per cent on 6 August on the back of the report, which alleged the value of the business was zero. However, today the MD said Bonitas’ allegations were wrong and they rejected each of the claims made in the report. In three weeks EY will release an independent report. In this time RFF will release its annual results. Dividends and guidance remain the same. Net assets for RFF were $1.75 per unit as at December and the company says there will be positive movement on this, which is assurance for shareholders. RFF shares reopened today after being a trading halt and at noon Rural Funds Limited (ASX:RFF) is trading 33.1 per cent higher at $1.81 at noon.

Insurance Australia Group (ASX:IAG) released its full year results to 30 June showing their net profit is up 16.6 per cent to $1.07 billion from $923 million at the same time last year. This includes $200 million profit on sales of operations in Thailand completed in August 2018.It's gross premiums rose 3.1 per cent to more than $12 billion, with 7 per cent growth in New Zealand business. The final dividend of 20 cents per share with full year dividends 32 cents per share down 5.9 per cent. UBS says IAG’s insurance profits came in 4 per cent ahead of expectations, at $743m versus UBS $712 million profit expected. Shares in Insurance Australia Group (ASX:IAG) are trading 4.8 per cent lower at $7.69 at noon.

Best and worst performers

The best-performing sector is Telcos, adding 1.3 per cent, while the worst performing sector is Utlities, shedding 2.7 per cent.

The best performing stock in the S&P/ASX 200 is Orocobre (ASX:ORE), rising 7.8 per cent to $2.76, followed by shares in Pilbara Minerals(ASX:PLS) and Galaxy Resources (ASX:GXY)

The worst performing stock in the S&P/ASX 200 is AGL (ASX:AGL),dropping 5.7 per cent to $18.86, followed by shares in Insurance Australia Group (ASX:IAG) and Resolute Mining (ASX:RSG).

Asian markets

Japan’s Nikkei has added 0.5 per cent, Hong Kong’s Hang Seng has gained 0.9 per cent and the Shanghai Composite has added 0.6 per cent.

Commodities and the dollar

Gold is trading at US$1,496 an ounce
Iron ore price lost 4.3 per cent, hitting US$93.31
Iron ore futures are pointing to a fall of 1.4 per cent.
One Australian dollar is buying 67.77US cents