Prospa Group sinks on profit downgrade: Aus shares close 0.4% lower

Market Reports

by Anna Napoli

Its been a softer start to the week for the Australian sharemarket despite a strong lead in from Wall Street. There were losses across the board with 8 out of 10 sectors in the red led by utilities which was down over 1 per cent. Financials was another of the main weights with the big 4 all down and health stocks such as CSL were also lower.
Miners were mixed, the price of iron ore lifted by around 1.6 per cent over weekend and around 6 per cent over the course of the last week. Consumer discretionary pushed higher on the back of gains in gaming stock. A number of Profit updates were also behind some of the big movers. Appen helped to boost the tech sector the stock lifted as much as 12 per cent on back of earnings upgrade. Salary packaging group Smart Group was down around 14 per cent and is one of today’s worst performers after the business announced the departure of its CEO following a 19 year tenure

The S&P/ASX200 index

At the closing bell the S&P/ASX 200 index closed 26 points lower to finish at 6,767.

Futures market

Dow futures are suggesting a fall of 4 points.
S&P 500 futures are eyeing a fall of 2 points.
The Nasdaq futures are eyeing a dip of 5 points.
And the ASX200 futures are eyeing a 26 point fall tomorrow morning.

Company news

Online small business lender, Prospa Group (ASX:PGL) saw a sell-off today which dragged its share price to its lowest level since listing in June 2019. When it listed in June, it forecast earnings of $10.6 million for the 2019 calendar year. Today the company announced it expects earnings of just $4 million for the year. Revenue forecasts have also been downgraded from $156.3 million to $143.8 million for the 2019 calendar year.  Prospa says that the company’s push for better quality borrowers will impair earnings in the short term but should pay off in the long term as better quality lenders attract lower loss rates, lower funding costs, improved market penetration and are more resilient to macro-economic factors. Shares in Prospa Group (ASX:PGL) closed 27.5 per cent lower at $2.80

Investment bank, Moelis (ASX:MOE) is set to snap up one of Australia’s most famous pubs the Beach Hotel in Byron Bay. Moelis will pay just over $100 million for the venue setting a new record for Australian pubs. The deal includes both the real estate freehold and operating business of the Beach Hotel, Byron Bay. Moelis will manage this fund adding to its approximately $4.7 billion of assets currently under management.

Best and worst performers

The best performing sector was consumer discretionary adding 0.5 per cent while the worst performing sector was utilities, shedding 1.2 per cent.

The best performing stock in the S&P/ASX 200 was Appen , rising 13.4 per cent to close at $26.43. Shares in Coca Cola Amatil (ASX:CCL) and Technology One (ASX:TNE) followed higher.

The worst performing stock in the S&P/ASX 200 was Smart Group (ASX:NEC), dropping 13.7 per cent to close at $9.49. followed by shares in Nufarm (ASX:NUF) and Invocare (ASX:ABC) followed lower.

Asian markets

Higher: Japan’s Nikkei has gained 0.2 per cent, Hong Kong’s Hang Seng has gained 1 per cent and the Shanghai Composite has lifted 0.5 per cent.

Commodities and the dollar

Gold is trading at US$1,466 an ounce.
Iron ore price is 1.9 per cent higher at US$89.04.
Iron ore futures are pointing to a rise of 0.6 per cent.
Light crude is US$0.95 up at US$57.83 a barrel.
One Australian dollar is buying 68.08 US cents.