CBA Settles With AUSTRAC For $700 Million

Posted on | by Todd

Shares of CBA have opened over 2% higher to reach $70.35 in early trade.

Before the open, CBA announced that the bank had settled on the alleged money laundering charges for $700 million.

This amount is not quite twice the $375 million amount the bank earmarked for the potential penalty, but well below some of the early estimates which were over the $1 billion mark.

And while settling these allegations is a positive result for CBA, we still believe the share price has more downside risk than upside potential.

Our ALGO engine triggered a sell signal for CBA at $80.32 in November last year. We see the next significant support level near $68.50.

CBA

 

ALGO Update: Keep Santos On Your Radar

Posted on | by Todd

Since rejecting Harbor Energy’s takeover bid on may 20th,  shares of STO have dropped over 10%, which is inline with the drop in global crude oil prices.

Despite the fall in the share price, CEO Kevin Gallagher has been firm that the company (and shareholders) will be better off and will see the benefits of their $2 billion cost cutting plan over the next few quarters.

Our ALGO engine triggered a buy signal in STO at $5.50 on May 30th.

We see good support in the $5.30 to $5.40 area and would suggest adding to long positions there.

We don’t rule out another offer from Harbor Energy in the $7.00 per share area sometime in the future

Santos

 

Expect More Debt Stress From Italy

Posted on | by Todd

One of the first lessons that we learned working on a dealing desk is that instability in sovereign bond markets can create sudden turmoil across a wide range of financial products.

The reason for this is because the aggregate amount of global bonds outstanding dwarfs the value of all the shares of stock in the world, combined.

Last Tuesday, global financial markets were spun into a frenzy as Italian sovereign bond yields exploded to the upside.

The catalyst for the move was President Mattarella’s rejection of the new government’s candidate for Finance minister, Paolo Savona.

Mr Savona is an outspoken critic of the EU and the Euro currency

As a result, Italian 2-yr bond yields rose from .68% to 2.42% in one day. That’s a rise of 250% in just 24 hours!!

Looking past the political aspect of this week’s events, Italy is well on its way to becoming the next financial basket-case in Europe.

Regardless of who governs Italy, the country will need to re-finance over 350 billion worth of debt maturities and close to 300 billion worth of non-performing loans over the next five years.

We consider the ongoing debt stress in Italy as a potential source of contagion for global equity markets, including the ASX 200 Index.

Italian Sovereign Yields

ALGO Update: Stay Long BBOZ

Posted on | by Todd

Our ALGO engine triggered a buy signal on BBOZ at $14.50 on May 3rd. This “higher low” formation is referenced to the low trade of $14.40 on January 10th.

BBOZ is the BetaShare ETF linked to the ASX 200 Stock Index. When the index falls, the price of BBOZ will rise, and vice versa.

We calculate that the price of BBOZ will be near $16.90 when the ASX 200 trades back to the April 3rd low of 5680.

Since reaching a high of 6135 on May 18th, internal momentum indicators have been trending lower for the ASX 200 Index.

For more information about BBOZ and opportunities to trade ETFs, in general, call our office on 1-300-614-002.

 BetaShare ETF BBOZ

 

 

ANZ Spikes Lower On Expected ACCC Charges

Posted on | by Todd

Shares of ANZ have dropped over 2% to $26.55 in early trade as the ACCC said it expects to lay charges on the bank over the handling of a $2.5 Billion share placement in August of  2015.

While the basis of the charges are not clear, we understand that ANZ Treasurer, Rick Moscati, and other individuals will be charged over the 80 million share placement.

Our ALGO engine triggered a sell signal on ANZ on May 11th at $28.10.  We see the next significant support level near $25.80.

We have been consistently cautious of the local banking sector all year, and still see scope for lower prices as loan growth continues slow to and profit margins continue to compress.

ANZ Bank

 

 

 

 

 

Buy And Hold Telstra

Posted on | by Todd

Since breaking down through the $3.00 mark on May 15th, shares of TLS have range traded between $2.70 and $2.90.

Much of the negative commentary about the Telco giant has revolved around its ability  to hold on to its 47% market share,  increase its profit margins via 5-G technology and maintain its dividend.

We feel that these questions will be answered in the affirmative during their business update call on June 20th.

At current prices, TLS has a dividend yield of 7.9% and a P/E ratio of 9.30, which we feel is good value for investors.

Telstra

 

Opportunities As WFD Exits The ASX Indexes

Posted on | by Todd | Leave a Comment on Opportunities As WFD Exits The ASX Indexes

As the takeover of WFD by Unibail-Rodamco moves into its final stages, the ASX has decided which stocks will be added to their benchmark indexes.

In the ASX 20, WFD will be replaced by ORG: in the ASX 50 index, TAH will replace WFD: and in the ASX 200, ELD will fill in from the departing WFD.

Since many Super funds and managed equity firms have a mandate to hold a percentage of listed index shares, we see good value in these names once the takeover is completed.

We will update these shares with specific entry levels over the next few days.

Origin

TabCorp

Elders

 

 

ALGO Buy Signal For Santos

Posted on | by Todd | Leave a Comment on ALGO Buy Signal For Santos

Our ALGO engine triggered a buy signal on STO into yesterday’s ASX close at $5.50.

The “higher low” pattern is referenced to the $4.80 low posted on March 15th.

The share price has dropped over 15% since the company rejected a $6.86 per share takeover offer from Harbour Energy last week.

Since then, there have been internal discussions about a higher takeover price, as well as whether the current management can use their strong balance sheet to increase earnings restore a fully-franked dividend.

Technically, we see solid support near the $5.30 area and initial upside resistance at $6.10

Santos

 

 

 

 

 

 

 

Gold Is back In The Buy Zone

Posted on | by Todd | Leave a Comment on Gold Is back In The Buy Zone

After falling nearly $90.00 from the April high of $1369.00 to last week’s low of $1281.00, Spot Gold has recovered back over the key $1300.00 level.

With increasing levels of volatility in major stock indexes, as well as simmering geopolitical risks, we expect the price of gold to trend higher over the medium-term.

Some of the local gold names we prefer include NCM, SBM, SAR, NST and EVN.

For more information about trading opportunities in gold, give us a call on 1-300-614-002

Newcrest Mining

Santa Barbara

Saracens

ALGO Sell Signal For Sydney Airports

Posted on | by Todd | Leave a Comment on ALGO Sell Signal For Sydney Airports

Our ALGO engine triggered a sell signal on SYD into yesterday’s ASX close at $7.37.

This “lower high” pattern is referenced to the intra-day high of $7.50 on December 19th.

The company expects to meet distribution guidance of 37.5 cents per share, which is up from 34.5 cents last year.

At $7.40, SYD shares are trading on a forward P/E of 44 X and are paying an annual dividend yield of 5%, which is un-franked. 

As such, we see a pull back in the shares price as corrective within a broader uptrend, and expect a buy signal around the $6.80 level.

Sydney Airports