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19/08/19
       
Daily Report
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Davide Bosio’s ‘Coffee with Samso’
Emergence of a giant in the Australian stockbroking industry

By Noel Ong

"DJ Carmichael was founded in 1896 and has had its fair share of ups and downs. Recently it was bought by Shaw and Partners, which itself had new owners earlier this year with the Swiss private bank, EFG International taking a 51% stake. On the surface, this is may appear to be just a transaction but when you view the Patersons Securities and Canaccord Genuity partnership in June 2019 at the same time, there is a trend appearing. The quiet nature in the way DJ Carmichael and Shaw did the deal gives me the impression a sense of urgency to get the consolidation of the broking industry completed."
 
"Coffee with Samso sensed that there is more to learn and invited Davide Bosio to have a coffee. I have known Davide for several years. I have seen his progress from the early days at CK Locke, which was followed by a move to his own firm at Pareto Capital in 2008. Finally, there was the move to drivers role at DJ Carmichael. The times I have spoken to Davide, he has given me a great breath of fresh air in this industry in Perth."
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Markets Summary
Markets Review
Local Market

The Australian share market finished nearly flat as declines in the energy and mining sectors outweighed gains by the big banks.

The benchmark S&P/ASX200 index closed Friday down 2.6 points, or 0.04 per cent, to 6,405.5 points, while the broader All Ordinaries was finished down 4.9 points, or 0.08 per cent, to 6,485.9 points.

The 178 points, or 2.7 per cent, loss for the week was the ASX200's second-worst for the year - exceeded only by last week's 184-point loss.

The financial sector was the biggest gainer, up 0.7 per cent, with Commonwealth Bank up 1.0 per cent to $75.12, Westpac up 0.8 per cent to $27.82, ANZ up 0.6 per cent to $26.39 and NAB up 0.9 per cent to $27.03.

The heavyweight mining sector fell 0.7 per cent, with BHP falling 0.6 per cent to $36.17 and Rio Tinto down one per cent to $84.72 while Fortescue Metals gained 2.1 per cent to $7.66.

Australia's biggest gold miner, Newcrest, was down 1.4 per cent to $36.26 despite announcing it had made $US561 million ($A826m) in full-year profit, its best results since 2012.

Newcrest's Cadia gold mine 250km west of Sydney had record production at record low cost, and is now has the lowest production cost of any major gold mine, Mr Daghlian said.

The energy sector was down 0.9 per cent as a whole, with Oil Search down 3.7 per cent to $6.31 after Papua New Guinea officials said reopened negotiations with Oil Search's joint venture partner Total SA on sharing natural gas revenues could end "disastrously".

oOh!media shares plunged 27.5 per cent to a five-year low of $2.93 after the outdoor advertiser blamed poor media advertising spend for a cut to its full-year earnings guidance.

Whitehaven Coal fell 5.3 per cent to $3.2 after announcing its full-year profit was up 0.6 per cent to $527.9 million.

Credit Corp gained 13.3 per cent to a three-week high of $27.27 after buying fellow debt collector Baycorp Holdings from Encore Capital Group for $65 million.

Domain Holdings rose 2.1 per cent to $2.93 after the domain.com.au owner's underlying profit increased 59 per cent to $37.4 million.

Rebel Sports owner Super Retail Group rose 7.9 per cent to $9.75 after broker upgrades following Thursday's earnings results.

Furniture retailer Nick Scali rose 2.2 per cent to $6.54 after reporting a 2.8 per cent rise in full-year profit, to $42.1 million.

Star Entertainment Group rose 5.9 per cent to $3.79 after announcing statutory profit was up 33.7 per cent to $198 million, in part because gamblers had been unlucky at the tables.

Looking forward, it will be busy next week, with numerous companies reporting earnings including BHP, A2 Milk, Origin Energy and Qantas.

International Markets

US stocks have rebounded as an ebbing bond rally and news of potential German economic stimulus brought buyers back to the equities market, closing the book on a tumultuous week.

While all three major US stock averages ended Friday's session higher, they still logged their third consecutive weekly losses, having been rattled since Monday by growing US-China trade animosity, simmering geopolitical tensions and signals from the bond market that sparked fears of impending recession.

Germany's coalition government is willing to suspend its balanced budget rule and take on debt, according to Der Spiegel magazine, raising hopes that Europe's largest economy could steer itself away from recession and cooling worries over a global economic slowdown.

German stimulus hopes helped the benchmark 10-year US Treasury yield rise from three-year lows, closing the book on a fraught week which saw 10-year yields dip below those of two-year notes, a classic recessionary red flag.

Rising bond yields gave a boost to rate-sensitive banks, sending the S&P 500 Banks index up 2.6 per cent

The Dow Jones Industrial Average on Friday rose 306.62 points, or 1.2 per cent, to 25,886.01; the S&P 500 gained 41.09 points, or 1.44 per cent, to 2,888.69; and the Nasdaq Composite added 129.38 points, or 1.67 per cent, to 7,895.99.

All 11 major sectors of the S&P 500 closed firmly in the black, with industrials, technology and financials enjoying the largest percentage gains.

Nvidia jumped 7.3 per cent after the chipmaker's quarterly results bested analyst estimates, helping the Philadelphia chip index gain 2.8 per cent.

Deere & Co cut its earnings forecast after missing Wall Street's profit estimates in the face of the ongoing US-China trade war. Still, the farm equipment-maker's decision to cut costs sent the stock up 3.8 per cent.

General Electric surged by 9.7 per cent after chief executive officer Larry Culp bought nearly $US2 million ($3 million) in shares after the conglomerate's worst one-day percentage drop in 11 years.

The second-quarter earnings season approaches the finish line, with 459 of the companies in the S&P 500 having posted results. Of those, 73 per cent beat Street estimates, according to Refinitiv data.

Analysts now see S&P 500 second-quarter earnings growth of 2.9 per cent year-on-year, per Refinitiv.

Source: Morningstar

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DJ Carmichael Pty Limited ACN 003 058 857 is a wholly owned subsidiary of DJ Carmichael Group Pty Limited ACN 114 921 247. DJ Carmichael Pty Limited is the holder of (Australian Financial Service Licence Number 232571). In accordance with Section 949A of the Corporations Act 2001 DJ Carmichael Pty Limited advises this email contains general financial advice only. In preparing this document DJ Carmichael Pty Limited did not take into account the investment objectives, financial situation and particular needs (‘financial circumstances’) of any particular person. Accordingly, before acting on any advice contained in this document, you should assess whether the advice is appropriate in light of your own financial circumstances or contact your DJ Carmichael Pty Limited adviser. DJ Carmichael Pty Limited, its Directors, employees and advisers may earn brokerage or commission from any transactions undertaken on your behalf as a result of acting upon this information. DJ Carmichael Pty Limited, its Directors and employees advise that they may hold securities, may have an interest in and/or earn brokerage and other benefits or advantages, either directly or indirectly, from client transactions. The information contained herein relies on information obtained from third parties. DJ Carmichael Pty Limited believes that the advice herein is accurate however no warranty of accuracy or reliability is given in relation to any advice or information contained in this publication and no responsibility for any loss or damage whatsoever arising in any way for any representation, act or omission, whether express or implied (including responsibility to any persons by reason of negligence), is accepted by DJ Carmichael Pty Limited or any officer, agent or employee of DJ Carmichael Pty Limited. This message is intended only for the use of the individual or entity to which it is addressed and may contain information that is privileged, confidential and exempt from disclosure under applicable law. If you are not the intended recipient or employee or agent responsible for delivering the message to the intended recipient, you are hereby notified that any dissemination, distribution or copying of this communication and its attachments is strictly prohibited.
 

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Recommendation Definitions:

SPECULATIVE BUY – Potential 10% or more outperformance, high risk
BUY – Potential 10% or more outperformance
ACCUMULATE - 10% or more out-performance, buy on share price weakness
HOLD – Potential 10% underperformance to 10% over performance
SELL – Potential 10% or more underperformance
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