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AUSTRALIA MARKETS(2018-07-31)

AIMS
2018-07-31 15:57

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BHP Billiton Limited (BHP):
BHP has struck deals to sell its maligned onshore US shale oil and gas assets for $US10.8 billion ($14.6bn) in a move that will deliver stronger returns for shareholders and, management hopes, set the stage for a new era of productivity gains from a simplified portfolio. The price for the assets, which will mainly go to oil giant BP, beat expectations in a quicker-than-expected sale process that sent the mining giant’s shares close to a four-year high yesterday. Chief executive Andrew Mackenzie also revealed that more debt had been paid down in the past six months, meaning nearly all the proceeds from the shale sales will go to shareholders in dividends or buybacks.
 
Charter Hall Group (CHC):
The listed Charter Hall Group has snapped up three buildings in Brisbane’s central business district in a near $94 million deal giving it control of a site that was to house one of Brisbane’s tallest apartment towers. Apartment values have slumped in the city as the market digests a wave of new projects and Charter Hall could now turn one of those projects into a landmark office tower as it seeks to capitalise on rising commercial rents. The site Charter Hall bought is known as No 1 Brisbane, thee adjoining buildings on separate -titles comprising 217 George Street, 60 Queen Street and 231 George Street, that span a lettable area of more than 10,000sq m.
 
Commonwealth Bank Of Australia (CBA):
Commonwealth Bank of Australia has built a blockchain which has been used by its logistics clients Pacific National, Patrick and OOCL to monitor a shipment of 17 tonnes of almonds from Victoria to Germany. In an experiment combining the emerging technologies of distributed ledgers, smart contracts and the internet of things, CBA and its clients were able to monitor the precise location of the Olam Orchards nuts using sensors built by IoT provider LX Group. This gave all the parties full transparency on their location and condition. Port of Melbourne also worked on the project. Teams from Pacific National and Patrick were seconded into CBA to help build the software, a process that took around four months. The almonds arrived in Germany a fortnight ago. Patrick's chief commercial officer Ashley Dinning said the system provided "a heightened level of transparency, enabling us to explore further efficiencies for our business, such as improving yard management".
 
Healthscope Limited (HSO):
Private hospital operator Healthscope has offloaded its Asian pathology business in a $279 million deal with private equity group TPG. Healthscope had announced in February it was reviewing its Asian pathology business — which has operations in Malaysia, Singapore and Vietnam — given it only represented four per cent of the hospital group’s portfolio and its focus was in Australia and New Zealand. Healthscope’s plan to sell the Asian pathology business was committed before Healthscope became the target of competing suitors offering $4 billion-plus for the company. It was in the sights of rival private equity funds after a BGH Capital-led consortium offered $2.36 a share in April, which was followed by Canadian group Brookfield committing to a $2.50 bid.
 
Origin Energy (ORG):
Origin Energy is set to receive more than $500 million cash from the Australia Pacific LNG export project in Queensland this financial year if oil prices remain stable, as recent onshore gas productivity moves boost profits from the project. The stronger future cash flows were revealed by Origin’s Houston-based APLNG partner ConocoPhillips, as global oil majors fronted investors last week after their quarterly results. The briefings also provided good news for Woodside Petroleum shareholders, with Chevron announcing it had taken Woodside’s long-held mantle as the nation’s biggest LNG producer (on an operating basis). This is good news for Woodside because the Perth oil and gas company has a 13 per cent stake in Chevron’s $US34 billion Wheatstone project at Onslow in Western Australia, a project Chevron revealed ran at full capacity soon after starting production at its second production train last month. At its quarterly briefing on Thursday in the US, Conoco revealed it had received $US190m of dividends from APLNG (which is 37.5 per cent each owned by Conoco and Origin) over the June quarter, including a recent one of $US85m.
 
Rcr Tomlinson Limited (RCR):
Engineering group RCR Tomlinson went into a trading halt on Monday morning warning it planned to make an earnings announcement. The trading halt will be lifted by Wednesday, the company said. RCR's shares last traded at $2.80 and it is due to report its full year results on August 23. RCR's stock price has slid over the past six months, dropping from $3.86 in January and halving since October, worrying analysts. JP Morgan said in June that it was concerned that the engineering group was not winning enough contracts to meet its earnings targets. The company has been bidding for several big rail projects, including the Sydney Metro and the Auckland City Rail Link, that are expensive to compete for in terms of bidding costs.
 
Suncorp Group Ltd (SUN):
There will be plenty on the line on Thursday next week, when the Suncorp announces its full-year results. Among them will be whether CEO Michael Cameron can retain his reputation for keeping a lid on costs. Observers will be looking for a strong performance in general insurance, a modest uptick in banking, and an outcome on the life insurance review announced 18 months ago. But it is costs which are likely to be the swing factor as to how the results are received, and ultimately decide whether Suncorp's rally is extended or whether investors decide to re-rate the stock. Over the last six months, Suncorp has rallied 16 per cent to $15.10. That's double the return from the ASX 200 over the same period and has seen Suncorp trade at levels not seen since before the GFC.
(Source: AIMS)
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