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CBL Corporation: 1H16 – Proving Up the Model

CBL reported a solid interim result supported by strong premium growth and diligent underwriting. Can earnings continue to grow?

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Western Markets End Month Lower

US, UK and European indices tracked lower as investors waited to assess US jobs data due on Friday. Asian markets closed the month with a day in the green. 

US stocks decline ahead of jobs report

US stocks halted a five-month rally as oil tumbled and traders awaited jobs data to assess the outlook for interest rates in the world’s largest economy. Energy shares led losses in the S&P 500 Index as crude traded below $45 a barrel after data showed American stockpiles climbed by more than projected. At the time of writing the S&P 500 had dropped -0.6%, whilst the Dow Jones Industrial Average slid -0.5%.  

Exxon Mobil fell -1.1% and was the top drag on the S&P while Chevron dropped -1.6% to have a similar effect on the Dow. Cyber security firm Palo Alto Networks slumped -9.0% after beating July-quarter estimates but also forecasting current-quarter profit and revenue below analysts' estimates. Tax services company H&R Block fell -10.6% after reporting quarterly revenue that missed analysts' expectations by a large margin. Apple bounced back +0.4% following the previous day’s European Union ruling that the maker of the iPhone owes Ireland more than US$14bn in back taxes – which Ireland rejects.

European and UK stocks fall with oil prices

European stocks fell as declines in commodity and energy producers outweighed the best month for banks in more than a year. The Stoxx Europe 600 lost -0.4%. Commerzbank and Deutsche Bank rose +3.4% and +2.5% after Manager Magazin reported Deutsche Bank considered a potential merger. 

Slides in miners and energy producers dragged down UK stocks, which erased earlier gains to trim a third monthly advance. The UK’s FTSE 100 slid -0.6%. BHP Billiton and Anglo American lost -4.9% and -4.6% respectively, while Royal Dutch Shell dropped -2.1%, extending a decline as oil fell after data showed that US crude stockpiles increased. Housebuilder Berkeley Group added +3.0% on a report that UK home prices rose the most in five months in August.

Asia nudges higher and Japanese stocks finish month strong

Asian stocks crawled a little higher as banks rallied and the yen weakened amid expectations for an increase in US interest rates this year. The MSCI Asia Pacific Index upped +0.1%, while the Shanghai Composite Index added +0.4% and Japan’s Topix gained +1.3%. Display-equipment makers Nikon and Ulvac jumped +2.4% and +8.3%, respectively. 

ASX 200 drags as USD strengthens

The ASX 200 slumped -0.8% as mining and energy stocks encountered hefty losses.

Crude, gold and iron ore lower

WTI crude fell -3.1% to US$44.90 while gold lost -0.3% to US$1,307.88. Iron ore nudged 34c lower to US$59/MT.

Today’s events

BFW AGM

NPT Ex interim div 0.90 cps

NZX Ex interim div 3.0 cps

SKC Ex final div 10.5 cps

 

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