REA reports a 14% drop in local listings (REA, FLT)
A weaker session to end the week although it’s been a very interesting 5 days in the market. The week started on the backfoot coming off a major selloff in the states last Friday as the Coronavirus stepped up, however that proved to be a buy day and the market has rallied since then. US markets have been stronger than our own while Chinese stocks held up well considering the obvious negative influences, the PBOC certainly playing a roll there. As it stands, the death toll sits at an unfortunate 636 people with more than 31,000 cases recorded.
Asian markets were higher today again, all less than 1% however higher none-the-less, US Futures a shade lower during our time zone.
Reporting season kicking up locally with a reporting schedule available: CLICK HERE
Monday, we have reports from AMC, AZJ, GPT, JBH. Today we saw REA, which Harry covers below.
Overall, the ASX 200 closed down -26pts or -0.38% today to 7022, Dow Futures are trading down -50pts/-0.17%.
ASX 200 Chart
ASX 200 Chart
CATCHING MY EYE;
REA Group (REA) +3.1%; closed higher today despite what was on most accounts a difficult first half. Trading on a huge 40x earnings, REA saw profit fall 13% to $152.9m in the first half of the year, around 6% below consensus data, on a decline in listings weighing on earnings. The company noted residential listing were down 14% in Australia, while the company managed to generate earnings in the smaller geographies of Asia and North America. REA pointed to growth in their premium products in painting a rosy picture for the second half, with the market appearing to bank on a swift property market recovery and volumes to return with the share price trading higher by day’s end despite the weak result.
REA Group (REA) Chart
Flight Centre (FLT) -2.38%: briefly halted trading mid-afternoon today to update the market ahead of their 1st half result talking up the first 6 months of the year but pouring cold water on full year guidance as the coronavirus impacts travel. the company expects first half to come in slightly ahead of the midpoint of profit before tax (PBT) guidance of $90m-$110m in the first half. MD Graham Turner also talked down the full year guidance of $310m-$350m, although he stopped short of putting a figure on its impacting, saying it was too early to tell the full extent of the issue. Flight Centre have a small corporate travel segment in China, Singapore and Malaysia which makes up just 2.5% of total transaction volume, however the impact will likely spread to corporate and leisure bookings across the company’s wider geographies. FLT expect TTV to increase over 11% globally to reach a record $12.4B for the group in the first half.
Flight Centre (FLT) Chart
Sectors this week:
Stocks this week:
· IGO Cut to Sell at Morningstar
· Computershare Cut to Hold at Morningstar
· Pendal Group Cut to Sell at Morningstar
· Coles Group Raised to Neutral at Credit Suisse; PT A$16
· Coles Group Cut to Reduce at Morgans Financial Limited
· Perenti Global Raised to Buy at Argonaut Securities; PT A$1.95
· Mirvac Group Cut to Equal- Weight at Morgan Stanley
· SKC NZ Raised to Positive at Evans & Partners Pty Ltd
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James is Portfolio Manager & Primary Author at Market Matters, a daily investment report with over 2500 subscribers that offers real market insight. He is also Senior Portfolio Manager within Shaw and Partners heading up a team that manages...