Markets Live: ASX sags as Super Retail, Vocus dive

Here's a couple of economist views on the RBA meeting minutes:

NAB: No surprises in the minutes. The RBA remains upbeat on the global economy, but focused on seeing further progress in reducing spare capacity the labour market, wage growth and inflation domestically.

On wages, NAB is expecting 0.5% q/q growth tomorrow, although we see some risks to the upside from minimum wage increases flowing through into Q4 and stronger wages in the mining industry.

Capital Economics: The minutes of February's Reserve Bank of Australia meeting do a good job of summarising the uncertainties surrounding the labour market and wage growth and how they will influence interest rates. This is why the RBA has been downplaying the chances of an interest rate hike this year and why we suspect the first hike may not come until the second half of next year.

The minutes restated the comments used in February's policy statement that the rise in inflation to the 2-3% target was expected to "occur only gradually". The issue is that "even with the strength in the labour market, wage growth was yet to pick-up". We will know more when the Q4 wage price index is released tomorrow, but the RBA highlighted two big uncertainties.

The ASX traded lower at lunchtime but was off its worst levels, with some big earnings-related moves from Vocus, Super Retail and Altium taking the spotlight.

The S&P/ASX 200 index slipped 15 points, or 0.3 per cent, to 5926 while the All Ordinaries lost 12 points, or 0.2 per cent, to 6031. The Australian dollar traded at US78.96¢.

Earnings were the main focus on Tuesday, with Super Retail losing 14.8 per cent, Vocus Group falling 10.6 per cent after reporting earnings and BHP losing 1.4 per cent ahead of its release due out after the close.

On the plus side, Altium shares surged 18.8 per cent as investors took their chance to react to results released after the close of trading on Monday.

Post-earnings broker changes were also lending a hand, with GWA Group jumping 11.6 per cent, Tabcorp up 2.7 per cent, Sydney Airport higher by 1.2 per cent and Bluescope Steel also up 1.2 per cent after scoring upgrades a day after releasing results.

The Reserve Bank is watching the looming expiry of a batch of interest-only loans that were written before mortgage lending standards were tightened.

Reserve Bank assistant governor Michele Bullock told a conference in Sydney that a "large proportion of interest-only loans are due to expire between 2018 and 2022".

"There is still a large stock of housing debt out there, some of which probably would not meet the more conservative lending standards currently being imposed," Ms Bullock said.

The Australian Financial Review recently reported that around $60 billion of interest only loans written at the height of the property boom will reset over the next four years, which experts said could impact consumer spending in the economy more broadly.

When current interest only loans expire, some borrowers will simply move to principal and interest repayments as originally contracted, while others may seek to extend the interest-free period if they can meet the current lending standards.

But Ms Bullock told a conference on responsible lending on Tuesday "there may, however, be some borrowers that do not meet current lending standards for extending their interest-only repayments but would find the step-up to principal and interest repayments difficult to manage.

"This third group might find themselves in some financial stress. While we think this is a relatively small proportion of borrowers, it will be an area to watch."

Some of the big moves for ASX 200 companies on Tuesday came after brokers moved their ratings around in response to earnings released on Monday.

Bluescope shares gained 1.7 per cent after the steel maker was reinstated at UBS with a buy rating. Domain shares rose another 1.7 per cent after the firm was upped to outperform at Credit Suisse.

GWA shares were 8.6 per cent higher, with Credit Suisse lifting the firm to outperform and Morgans Financial raising its rating to add.

Tabcorp shares were up 2.8 per cent after Credit Suisse raised its view on the firm to outperform.

SIms Metal lost 4.1 per cent after it was reinstated at UBS with a sell recommendation.

More people are finding jobs and business conditions are improving but retailers can expect a few more years of tough times, the Reserve Bank has warned.

Australia's central bank says strong competition in the retail sector, which has kept prices particularly low for food and consumer goods, is "expected to persist in the next few years".

Minutes of the RBA's February board meeting, released on Tuesday, show the bank board remained concerned about weak wages and spending as it decided to leave the official interest rate unchanged at a record low 1.5 per cent.

The Australian dollar traded at US79.17¢ after the release of the minutes.

The turbulence of the last month should serve as a reminder that in times of uncertainty the safest option can simply be to tune out noise and refocus on following a disciplined, value-orientated investment process, writes the FT's Miles Johnson.

Price volatility is near universally discussed as a bad, or worrying thing. In fact, volatility should be welcomed by thoughtful investors who seek to follow the deceptively simple practice of trying to buy stocks and bonds for less than they think they are intrinsically worth.

Ben Graham, the famed father of value investing, used the analogy of the market as a business partner so mentally unstable he would on some days offer to sell you his share for a rock bottom price, and on better days would ask for a stratospheric valuation. This character, Mr Graham noted, would be a fantastic person to do business with.

"Price fluctuations have only one significant meaning for the true investor," he wrote. "They provide him with an opportunity to buy wisely when prices fall sharply and to sell wisely when they advance a great deal. At other times he will do better if he forgets about the stock market."

Mr Graham was writing in the 1940s, but little about market psychology appears to have changed in the years that have passed.

It pays to remain cool headed and focused when the wider market is flailing its arms in panic. Being an all-knowing macro forecasting genius who correctly analyses each swing of the market is very hard, if not impossible.

Instead of aiming for genius, as Mr Graham said, it is easier "simply trying to be less irrational than the mass of speculators who insist on buying after the market advances and selling after it goes down . . . If the market persists in behaving foolishly, all he seems to need is ordinary common sense in order to exploit its foolishness".

Only one Myer director has followed their chairman's call to put some "skin in the game" by buying more of the company's shares, while three directors have not increased their holdings in over two years and one has not invested a cent.

The department store's seven-person board has a combined investment in the company worth less than half a million dollars at its current share price, annual reports and other corporate documents show.

Quizzed about the level of shares owned by Myer directors at its annual general meeting in November, chairman Garry Hounsell said he would be working with directors to ensure they had "skin in the game".

"It is my very, very strong belief that the board does need to have skin in the game and I will certainly be recommending and working with the board to put something in place," Mr Hounsell said.

Patrick Hatch reports

Construction software company Aconex said it boosted revenue by 12.8 per cent to $86.9 million, in what is likely to be its last financial results as a listed company.

Global technology giant Oracle has made a takeover bid of $1.6 billion for the business, which its management and board support.

On Thursday the company, founded by Leigh Jasper and Rob Phillpot, also recorded a statutory loss for the six months ended December 31 of $2.95 million, down from $3.53 million in the previous corresponding period.

Shares gained 2 per cent.

APN Outdoor is mitigating the impact of the loss of the Yarra Trams advertising contract and has locked down future earnings by extending a number of key clients, such as Sydney Trains, it told investors.

New chief executive James Warburton said there is "uptapped potential" in the out-of-home market.

"At only circa 6 per cent of the overall advertising industry the Out-of-Home industry has untapped potential," he said.

"In addition, our contract renewal exposure for 2018 and 2019 has reduced to single digits given the recent renewals won including Sydney Trains just last week.

Over the 2017, APN Outdoor reported a 9 drop in net profit to $44 million, largely related to costs of the failed merger with rival oOh!media and the retirement of long-time chief executive Richard Herring. Revenue increased 4 per cent to $342.9 million.

Shares were up 2.5 per cent after the results.

Virtus Health said its first-half net profit rose 10.9 per cent to $17.32 million.

Cost-cutting and low single digit growth underpinned an 9.7 per cent rise to $34.82 million in earnings before interest, tax, depreciation and amortisation for the country's largest IVF clinicians.

Revenue rose 1.8 per cent to $133.8 million in the six months ended December 31, with the company noting weaker performance in Queensland and Tasmanian market, while its larger NSW and Victorian clinics undertook more cycles than the market average.

Shares rose 1.6 per cent.

Overall, Virtus Australia's cycle activity was flat at 7929 cycles. The Australian division generates $111 million in revenue, and the group also operates in offshore markets including Denmark and Ireland.

The board declared an interim dividend of 14c per share, to be paid on April 17 to shareholders of record on March 29.

The ASX retreated from the previous session's gains in early trading with investors eyeing a mixed bag of earnings reports.

The S&P/ASX 200 index fell 25 points, or 0.4 per cent, to 5915 while the All Ordinaries declined 23 points, or 0.4 per cent, to 6020. The Australian dollar reached US79.11¢.

US markets were closed for a holiday on Monday and, with contrasting leads from Japan and Europe, investors were selling out of the heavyweight banking and mining sectors.

BHP was down 1 per cent ahead of its earnings due out after the close, while CBA dipped 0.2 per cent in the banking sector.

Earnings provided a focus for investors, as Super Retail dropped 14.8 per cent after reporting weaker-than-expected half-year sales and earnings.

In addition, Vocus Group fell 8 per cent and APN Outdoor lost 5.1 per cent after updating on earnings.

On the plus side of earnings-related moves, Seven West jumped 4.9 per cent, while Bapcor rose 2.3 per cent after reporting a 72.2 per cent jump in net profit to $43.5 million.

Altium soared 15.4 per cent after reporting a 30 per cent jump in revenue to $63.3 million and a 50.8 per cent rise in profit to $14.9 million.

Vocus Group has cut its full-year profit guidance thanks to an increase in subscriber costs in its consumer business and weaker than expected energy sign ups than it had forecast.

The telecommunications group now expects full-year underlying profit to come in between $125 million and $135 million, down from between $140 million and $150 million.

Expectations for underlying earnings before interest, tax, depreciation and amortisation were cut from between $370 million and $390 million to between $365 million and $380 million.

"This revision primarily relates to the Australian Consumer division facing headwinds in H2FY18 due to over hedging of its energy portfolio and a change in its go to market strategy, resulting in a reduction in the amount of subscriber acquisition costs that can be deferred," the company said in a statement to the ASX.

For the six months to December 31, net profit fell 21 per cent $37.3 million, compared with $47.1 million the same time last year. EBITDA rose 12 per cent to $188.1 million.

The Vocus board decided not to declare an interim dividend for the half due to the company's focus on investment, including the Australia Singapore Cable project.

Growing oil and gas junior Senex Energy will take a $80 million hit in its first-half earnings later this week on write-downs of "non-core" assets in the Cooper Basin, which may be sold or relinquished.

After a review of its assets following the award of promising acreage in Queensland last year, Senex has prioritised projects for spending while other permits will not be allocated any capital.

As a result of the review, the focus for investment will be placed on easts coast gas development projects such as the Western Surat and Atlas projects, and on the Cooper Basin oil assets, Senex said.

Senex is having to select assets for investment given heavy capital requirements for the Atlas project, from which the company has committed to start delivering gas from 2019. Permits designated as non-core will receive no capital, and will be impaired, to the tune of $80 million.

Super Retail Group, owner of Rebel Sport and the Supercheap Auto stores, said its net profit for the half year ended December 30 fell 3 per cent to $72.2 million from $74.4 million in the year-earlier period.

Interim revenue rose 2.2 per cent to $1.32 billion from $1.3 billion in the year-earlier period.

Super Retail said it would pay a fully franked 21.5c interim dividend on March 1.

Seven West Media said its interim net profit surged more than eight times to $100.73 million from $12.39 million a year ago.

The topline number was favourable because of a write-down on the value of its Yahoo7 business, existing streaming service Presto and the sale of some magazines and Sky News in the previous comparable period

Revenue in the six months ended December 31 fell 10.6 per cent to $810.13 million from $906.07 million in the year-earlier period.

Underlying net profit rose 5.2 per cent from $95.7 million to $100.7 million.