The Morrison government to keep JobKeeper til March: ASX tracking 1.2% higher at noon

Market Reports

by Rachael Jones

The Australian share market rallied on the news the government will extend its Jobkeeper allowance until at the end of September to $1200 a fortnight for full-time workers and to $750 for part-time workers, down from the current single rate of $1500. The local bourse is tracking 1.2 per cent higher at noon. The scheme is being extended until March 28 next year, but will drop down by the end of December to $1000 for full-time workers and $650 for part-time workers. As for the sectors today, Information technology is leading the way and the Utilities are the only sector in the red today.

The S&P/ASX 200 index

The S&P/ASX 200 index is 71 points up at 6,072. On the futures market the SPI is 67 points higher.

Local economic news

The Board reaffirmed the elements of the policy package announced on 19 March 2020, namely: a target for the cash rate of 0.25 per cent

Broker moves

Macquarie rates Dexus (ASX:DXS) as a Downgrade to a Neutral from an Outperform. While Dexus Property should be more resilient than others in the office space, Macquarie believes it is not immune to lower rents due to weaker demand. The broker expects office rents to decline by -15-25 per cent, noting Sydney CBD vacancy increased 7.5 per cent in the six months to June.
While the balance sheet is okay and earnings will be resilient, cash flow will be poor, the broker notes, and the REIT offers little total shareholder return at current levels. Target price is $9.23. Shares in Dexus (ASX:DXS) are currently 0.3 per cent lower at $9.04.

Company news

Santos (ASX:STO) expects to recognise a non-cash impairment charge in the range of US$700-800 million before tax in the 2020 half-year results to be released on 20 August 2020. The impairment charge is due to revised oil price assumptions resulting from the effects of the Covid-19 pandemic on energy market demand fundamentals. As a result of this Santos will recognise non-cash impairments of GLNG of US$640-700 million before tax and exploration assets (primarily in the Cooper and Amadeus Basins) of US$60-100 million before tax in the half-year results. There is no impact on any of Santos’ reserves. Shares in Santos (ASX:STO) are trading 1.8 per cent higher at $5.25.

Best and worst performers

The best-performing sector is Infotech gaining 5.2 per cent, while the worst performing sector is Utilities losing at 0.3 per cent.

The best performing stock in the S&P/ASX 200 is Nearmap (ASX:NEA) rising 10.7 per cent to $2.48, followed by shares in Mesoblast (ASX:MSB) and Corporate Travel Management (ASX:CTD).

The worst performing stock in the S&P/ASX 200 is Alumina (ASX:AWC) dropping 4.1 per cent to $1.71, followed by shares in TPG Telecom (ASX:TPG) and NRW Holdings (ASX:NWH).

Commodities and the dollar

Gold is trading at US$1,818 an ounce.
Iron ore price is 0.7 per cent higher at US$109.54.
Iron ore futures are suggesting a rise of 1.9 per cent.
One Australian dollar is buying 70.27US cents.

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