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16/08/19
       
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 shed more than $63 billion in its worst day in 18 months amid a global market meltdown as investors worry a recession is near.

The benchmark S&P/ASX200 index on Thursday tumbled 187.8 points, or 2.85 per cent, to 6,408.1 points while the broader All Ordinaries shed 186.7 points, or 2.8 per cent, to 6,490.8 points.

It was the ASX200's worst day since February 6, 2018, when the index lost 192.9 points, or 3.2 per cent.

Despite three weeks of losses, the ASX200 is still up 761 points, or 13.5 per cent, since January 1.

The global rout came after investors poured money into long-term US bonds, dropping yields on 10-year bonds temporarily below the yield on two-year Treasuries for the first time since 2007.

A similar yield curve inversion has occurred before each of the past seven recessions and investors pulled billions from global markets on fears it was signalling another.

In Australia, energy and tech shares had the largest losses, sliding 5.3 per cent and 4.9 per cent, respectively.

Most sectors were down at least 2.0 per cent, with property groups the least hit with 1.7 per cent losses.

Santos, Oil Search, Origin Energy and Beach Energy fell between 3.5 and 6.7 per cent after crude prices dropped below $US60 a barrel while Woodside Petroleum fell 6.7 per cent after the oil and gas producer cut its interim dividend.

Wisetech Global, Afterpay, Appen, Altium and Xero fell between 3.5 per cent and 7.3 per cent.

Mining giant BHP was down 2.8 per cent to $36.39, Rio Tinto was down 2.6 per cent to $85.60 and Fortescue Metals was down 0.8 per cent to $7.50.

Goldminers were among the very few winners as the price of the precious metal climbed back up to $US1,510.

Northern Star, St Barbara and Evolution were up between 1.6 and 1.8 per cent.

Cryptocurrencies proved no safe haven, with Bitcoin down 8.7 per cent to $A14,230 or $US9,579 on Sydney exchange the Independent Reserve.

The big four banks were lower, with ANZ down 3.0 per cent to $26.23, Commonwealth down 3.0 per cent to $74.34, NAB down 3.1 per cent to $26.80 and Westpac down 3.2 per cent to $27.61.

Telstra was down 1.8 per cent to $3.87 after the telco reported a 40 per cent fall in full-year profit to $2.15 billion.

Super Retail Group was the ASX200 component up the most, by 4.2 per cent to $9.04, after recording an 8.6 per cent rise in full-year profit.

Blackmores tumbled 14.9 per cent to a four-year low of $70.90 after the vitamin maker slashed its final dividend.

Orora plunged 15.9 per cent to a three-year low of $2.69 after the packaging company reported its profit had climbed 4.0 per cent to $217 million amid "challenging market conditions".

The local currency lifted against the US dollar after the Australian Bureau of Statistics announced the country's unemployment rate held steady at 5.2 per cent in July.

International Markets

The S&P 500 and the Dow gained ground in a late rally on Thursday as upbeat retail sales data offset recessionary fears amid the simmering US-China trade tensions.

Wall Street zig-zagged from red to black and back much of the day as investors juggled mixed messages of a strong consumer and dropping US Treasury yields.

The Nasdaq closed lower, weighed by a plunge in the shares of Cisco Systems Inc.

Walmart Inc beat second-quarter analyst estimates and raised its full-year earnings outlook, sending shares of the world's largest retailer up 6.1 per cent and soothing concerns about waning consumer demand.

Those concerns were further eased when retail sales data surpassed analyst expectations. Consumers, who account for about 70 per cent of the US economy, stepped up their spending across the board in July, according to the Commerce Department.

Other economic data was less sanguine. Manufacturing output shrank more than expected in July, according to the US Federal Reserve, and new claims for unemployment benefits came in above economist forecasts.

Belligerent rhetoric kept US-China trade tensions at a low boil, as China vowed it would counter the last round of tariffs on Chinese imports and called on the United States to meet it halfway, while US President Donald Trump said in an interview any deal must be made "on our terms."

The prolonged escalation of the trade war between the world's two largest economies and the economic fallout have vexed global markets for months and have begun to drag on some companies' top lines.

Impending US tariffs weighed on Cisco Systems, which plunged 8.6 per cent after reporting a 25 per cent drop in China sales and set sales and revenue forecasts well below analyst estimates.

Trade tensions also sent the US 30-year Treasury yield to a record low and the benchmark 10-year yield to a three-year trough.

The Dow Jones Industrial Average rose 99.97 points, or 0.39 per cent, to 25,579.39, the S&P 500 gained 7 points, or 0.25 per cent, to 2,847.6, and the Nasdaq Composite dropped 7.32 points, or 0.09 per cent, to 7,766.62.

Of the 11 major sectors of the S&P 500, six closed the day in positive territory, with consumer staples enjoying the largest percentage gain.

Shares of JC Penney Co Inc surged 2.2 per cent after the struggling department store operator posted a smaller quarterly loss than analysts estimated.

General Electric Co shares dropped 11.3 per cent on the heels of a report from whistleblower Harry Markopolos accusing the conglomerate of hiding $38.1 billion in potential losses and claiming its cash situation was far worse than disclosed.

Source: Morningstar

CEO/MD Weekly Update
In this week’s video, Davide Bosio provides an update on AMP and Transurban activities, and asks whether is it time for copper to make a comeback.
Finance News Network
DJC has recently partnered with the Finance News Network to bring the latest market news, company updates, interviews and more to our website.

The tabs are updated throughout the day and can be found on our home page or by clicking on the following link: https://www.djcarmichael.com.au/stockbroking/fnn

 
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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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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
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SELL – Potential 10% or more underperformance
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