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12 October 2018 08:11 AM
Overseas Market ReportCurrent
Level
PreviousChangeDaily %
Change
Monthly %
Change
Dow Jones Industrial Average25,05325,599-546.00-2.13-3.64
S&P 5002,7282,786-57.00-2.06-5.56
NASDAQ7,3297,422-93.00-1.25-7.86
FTSE 100 Index7,0077,146-139.00-1.94-4.19
DAX 3011,53911,712-173.00-1.48-4.10
CAC 40 Index5,1065,206-100.00-1.92-4.23
Nikkei 225 (Japan)22,59123,506-915.00-3.89-0.06
HKSE25,26626,193-927.00-3.54-4.09
SSE Composite Index2,5832,726-142.00-5.22-2.74
S&P/TSX Composite Index15,31715,517-200.00-1.29-4.56
NZ 508,7798,72158.000.67-4.52
US Volatility (Vix)25
Overseas Market Report

US sharemarkets fell again on Thursday. Analysts indicated that selling was more technical rather than fundamental - that is driven by changes in the economic environment or corporate profits. Energy stocks fell in response to a 3% fall in the oil price. JPMorgan Chase, Citigroup and Wells Fargo all report earnings results on Friday. The Dow Jones fell by 546 points or 2.1% after trading in a 784 point range. The S&P500 index lost 2.1% and the Nasdaq index lost 93 points or 1.3%.

Global oil prices fell by around 3% on Thursday. Global sharemarkets continued to fall creating worries about an economics lowdown and reduced oil demand. OPEC has cut its forecast of global oil demand for a third month. Also US crude inventories rose by 6 million barrels last week, more than double expectations. Brent crude fell by US$2.83 or 3.4% to US$80.26 a barrel and the US Nymex price fell by US$2.20 or 3.0% to US$70.97 a barrel.

Base metal prices were mixed on the London Metals Exchange on Thursday. Lead rose by 6.3% and tin rose 1.4% but aluminium fell by 1.3%. Other metals were flat.

The gold futures price rose by US$34.20 an ounce or 2.9% to $1,227.60 an ounce. The spot gold price was trading near US$1,223 an ounce in late US trade. Iron ore fell by US65 cents or 0.9% to US$71.05 a tonne.

CommoditiesCurrent
Level
PreviousChangeDaily %
Change
Monthly %
Change
Oil Brent80.2683.09-2.83-3.411.52
Oil - West Texas crude71.0970.970.120.171.02
Gold Spot $/OZ1,221.001,224.00-3.00-0.241.23
Silver Spot $/OZ14.6014.600.00-0.032.26
Iron Ore67.7066.701.001.514.62
Thermal Coal Newcastle108.70109.80-1.10-1.05-6.01
Coking Coal FOB ECP AUS0.000.000.000.000.00
Aluminium ($US/t)2,0132,040-27.00-1.320.40
Copper Mar-18 ($US/lb)2.782.78-2.40-0.844.55
Lead ($US/t)2,0151,896119.006.283.68
Nickel ($US/t)12,60212,604-3.00-0.023.78
Zinc ($US/t)2,6342,636-3.00-0.0914.44
Tin ($US/t)19,26218,994268.001.411.07
Uranium ($US/lb)28.0028.000.00-0.181.85
Australian Market ReportCurrent
Level
PreviousChangeDaily %
Change
Monthly %
Change
ASX All Ords5,9745,993-20.00-0.33-4.93
S&P/ASX 2005,8635,884-21.00-0.35-5.07
ASX 24 Futures5,861
Australian Market Report

Thursday 11 October - close. All that glittered on Australian markets was gold as the ASX ended its second worst day of the year after a "perfect storm" on Wall Street caused heavy stock losses across every other sector. After plunging at the opening, the benchmark S&P/ASX200 index slid down 166 points, or 2.74 per cent, to 5883.8 points at 1630 AEDT on Thursday, while the broader All Ordinaries was down 170.4 points, or 2.76 per cent, at 5993.4.

Ashanti Headlines

AuMake International Ltd (AU8.ASX, 30cps, m.cap A$81.4m with 271.5m SOI, Cash $10.7m, Consumer Discretionary)

We were most impressed by the numbers in the September Quarterly released this morning given that, seasonally, it is one of the quieter periods for consumers and tourists. Highlights include;

  • Exceptional financial growth for the September 2018 quarter:
    • Sales: $10.05m (June 2018 quarter: $7.04m) up 43%  
    • Gross profit: $1.76m (June 2018 quarter: $1.08m) up 63%
    • Gross margin: 17.5% (June 2018 quarter: 15.4%)
  • Significant increase in owned brand sales growth of 47% to $550,000 (June quarter 2018: $374,000)
  • Strong improvement in same store performance over the June quarter with growth of 11% (sales) and 18% (gross profit)
  • Online contributed 30% of overall sales and membership grew by 13,000 to 93,000 members.

Key Takeaway was AuMake’s summary of the recent regulatory changes in China;

Whilst implementation guidelines for the new China eCommerce law (scheduled to come into effect 1 January 2019) are yet to be released by the Chinese government, AuMake’s analysis of existing relevant legislation and commentary indicates that the new eCommerce law will likely be favourable towards Australian based daigou and in turn, the AuMake business. AuMake has not observed any changes in daigou buying behaviour. In addition, the Chinese tourist driven segment which comprises 50% of the AuMake business, is anticipated to be unaffected by the introduction of upcoming legislation and continues to perform strongly.

Outlook

We expect the AU8 to continue to report significant growth in the Dec Qtr as the business matures and seasonally, it is the busiest time of the year for tourism and Chinese consumers. 

Executive Chairman Keong Chan concludes;

December quarter activities will include further marketing activities to strengthen our Australian distribution network, initial sales from our strategic partnership with China’s TV sales platform JiaJia, a further addition to our owned brand dairy product portfolio and realisation of further strategic partnerships which will provide additional growth opportunities. The Company continues to assess acquisition opportunities and we will advise the market at the appropriate time.

A link to the full announcement can be found here

Please contact the desk on +61 8 6169 2668 should you wish to discuss further.


Have a question? admin@ashanticapital.com.au

ERA Communications