The Australian share market opened higher following mixed leads from international markets and is tracking 0.5 per cent higher mid-session. Most of the sectors are in the green, with Information Technology and Industrials leading the chargeThe S&P/ASX 200 index
The index is 30 points higher at 6,121. On the futures market the SPI is 28 points higher. Local economic news
The Australian Bureau of Statistics has released data on overseas arrivals and departures for the 2019 to 2020 financial year. It recorded 6.7 million overseas visitor arrivals for the year, down 27.9 per cent on the previous year. Prior to the impact of Covid 19 and the subsequent border restrictions, Australia was on track to set a record with 9.5 million visitors for the year ending January 2020. During the 2019 to 2020 financial year, most of Australia’s visitors came from New Zealand, followed by China then the USA.
RBA Governor, Philip Lowe testified to the House of Representatives Standing Committee on Economics this morning. He said the RBA is not expecting a lift in economic growth until the December quarter. He advised that the RBA would be considering an extension of the Term Funding Facility for the banking system under which funds can be provided for three years at 25 basis points. Take up of the facility has increased ahead of the September deadline. The RBA came under scrutiny when Mr Lowe blamed the responsible lending rules which came into play after the Royal Commission for hindering credit growth, saying “we can't have a world where when a person can't pay off the loan then it's the bank's fault.” He said the RBA “actually want some of the banks loans to go bad. If the bank never makes a loan that goes bad then [in his view] it’s not extending enough credit.”Broker moves
Credit Suisse rates AGL Energy (ASX:AGL)
as an Underperform, with a decreased 12-month price target of $12.60. The company’s 2020 full year net profit came in just above concensus. The electricity and gas portfolio margin was in line with the broker’s estimates. The company has projected a net profit of between $560 and $660 million – 19 per cent below consensus and 23 per cent below the Credit Suisse’s expectations. The broker thinks while the company has a sound growth strategy it is unlikely to deliver any material earnings upside. Shares in AGL Energy (ASX:AGL)
are trading 0.7 per cent higher at $15.46.Company news
National Australia Bank (ASX:NAB)
has released a trading update for the third quarter. The bank raised concerns about early signs of "modest" asset quality deterioration and recorded a 7 per cent fall in cash earnings in the third quarter, down to $1.55 billion. Unaudited statutory net profit came in at $1.5 billion for the third quarter. All this as the bank forges ahead with a corporate restructure that will see 2,600 employees have to reapply for jobs across three divisions. The bank says that 47 per cent of its deferral customers are receiving the JobKeeper subsidy, and it expects GDP to return to pre-Covid 19 levels in late 2022. Shares in National Australia Bank (ASX:NAB)
are trading 0.8 per cent higher at $18.16 at noon.