The Australian share market dropped at the open and is now tracking 0.2 per cent lower at noon. Shares in the Monadelphous Group (ASX:MND) rose today after they released their results showing a revenue rise. Shares in Seven West Group also rose after reporting a statutory loss after income tax of $67.0 million on total revenue of $773.3 million. The best-performing sector is materials, while the worst performing sector is Information Technology.
The S&P/ASX 200 index is 12 points down at 7,113. On the futures market the SPI is 18 points lower.
UBS has upgraded Synlait Milk (ASX:SM1) to a Buy from a Neutral. They believe capacity expansion has proven harder than the company expected, because of lower infant milk formula (IMF) sales along with margin pressure in lactoferrin and basic ingredients. UBS believes the company's profit warning addresses the issues and is comfortable that a substantial uplift in earnings per share in FY21 can occur. The broker assesses the drop in the share price creates an attractive opportunity. Shares in Synlait Milk (ASX:SM1) are currently 4.7 per cent higher at $6.42.
Local economic news
The minutes were released this morning from the latest board meeting at the Reserve Bank of Australia, they report low interest rates are probably required for an extended period and that coronavirus presents a new source of uncertainty regarding the global outlook.
Engineering company Monadelphous Group (ASX:MND) today announced revenue of $852 million for the period ended 31 December 2019, a 2.6 per cent increase on the prior corresponding period and up 9.5 per cent on the second half of the 2019 financial year. Net profit after tax was $28.5 million. The result reflects a strong performance from the Company’s Maintenance and Industrial Services division, which achieved a record half year revenue of $584.5 million, up 16 per cent on the prior corresponding period. Major construction contracts were secured at Rio Tinto’s West Angelas Project and at Albemarle Lithium’s Kemerton lithium hydroxide plant. Mondium. Shares in Monadelphous Group (ASX:MND) are 5.9 per cent higher at $17.34.
Best and worst performers
The best-performing sector is Materials adding 0.3 per cent, while the worst performing sector is Information Technology at 1.8 per cent lower.
The best performing stock in the S&P/ASX 200 is Monadelphous Group (ASX:MND) rising 5.9 per cent to $17.34, followed by shares in AMP (ASX:AMP) and Seven Group Holdings (ASX:SVW).
The worst performing stock in the S&P/ASX 200 is Altium (ASX:ALU), dropping 13.2 per cent to $37, followed by shares in ARB Corp (ASX:ARB) and Nine Entertainment Holdings (ASX:NEC).
Commodities and the dollar
Gold is trading at US$1,586 an ounce.
Iron ore price is 2 per cent higher at US$90.48.
Iron ore futures are pointing to a rise of 1.4 per cent.
One Australian dollar is buying 66.94cents.