Markets Live: ASX records worst month in three years

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Australian shares have recorded their worst monthly fall since August 2015 during October, with every single sector on the benchmark index closing the month firmly in the red.

The S&P/ASX 200 closed Wednesday with a 25.2 point, or 0.4 per cent gain, lifting to 5830.3 The benchmark index's still closed the month firmly in the red however, falling 377.3 points, or 6.1 per cent.

"October has been an ugly month for global equities, erasing the years gains across multiple indexes," said Saxo Capital Markets market strategist Eleanor Creagh.

"The sharp rise in US government ten-year yields up to a seven year high above 3.2 per cent at the start of the month caused market participants to sharply reconsider asset prices as Treasury rates are the foundation for valuation across all asset classes."

Energy shares were hit hard during October, pushing the sector down 10.2 per cent. The Morrison government unveiled a raft of market intervention measures designed to force down electricity costs hurting listed energy retailers while the softening price of crude hurt local oil stocks. Woodside Petroleum shares fell 9.7 per cent to $34.85, Origin Energy slid 11.7 per cent to $7.29, Oil Search closed the month 14 per cent lower at $7.77 and Beach Energy shares dropped 17.8 per cent to $1.76.

The information technology was the worst performing sector during October, as local tech stocks followed the poor performance of the US-listed FAANG stocks. Afterpay Touch shares plummeted 30.4 per cent to $12.49 during the month, Wisetech Global fell 27.3 per cent to $16.05 and Appen slid 23.8 per cent to $10.64.

The major mining stocks also fell during the month as base metal prices fell across the board amid heightened trade war concerns. BHP Billiton shares fell 7 per cent to $32.21, Rio Tinto fell 3 per cent to $76.40 and South32 slid 7.7 per cent to $3.62.

AMP had a month to forget as its shares fell 22.6 per cent to $2.47. The company announced it was selling its life insurance division and shedding its New Zealand wealth management and advice business.

Bellamy's Australia shares fell 29.3 per cent to $7.23 in October after the company flagged a fall in first-half sales compared with a year ago. The infant formula company is still waiting to receive a crucial permit to sell its products in Chinese stores and said that full year sales would be at the lower end of its guidance.

The listed gold miners saw big gains during the month as precious metal prices lifted on the back of volatility in the equity market. Newcrest Mining shares rose 6.2 per cent to $20.61, Evolution Mining advanced 12.5 per cent to $2.98, Saracen Mineral Holdings lifted 31.4 per cent to $2.45 and St Barbara closed the month 19.2 per cent higher at $4.16.

Investors beware: the passion for "simplicity" is spreading like wildfire among the country's top bankers and financiers.

The latest fad partly reflects the impact of the Hayne royal commission, which highlighted some of the reputational risks associated with unwieldy and complex corporate structures, especially when they made it difficult for top management to keep track of shoddy practices in parts of their business.

But the more challenging business environment has also played a role in convincing our top bankers that instead of trying to bulk up, they now need to be agile and lean.

ANZ Bank boss Shayne Elliott was impeccably on-trend on Wednesday as he announced a 5 per cent dip in the bank's full-year cash profit to $6.5 billion, when he touted the virtues of being fit and lean and ready to adapt.

Karen Maley has the full piece here.

There is a delicious irony in the fact that Murray is at the helm of a financial services giant that is touting the virtues of "simplification".Credit:David Rowe

Coca-Cola Amatil is evaluating the book value of its Indonesian business after The Coca-Cola Co wrote down the value of its 29.4 per cent stake by $US205 million ($291 million) overnight.

The write-down represented 40 per cent of the $US500 million The Coca-Cola Co paid for the stake in 2015 as part of a strategy to accelerate capital investment and market development in Indonesia to boost soft drink sales.

In its third quarter results overnight, The Coca-Cola Co said the $US205 million impairment charge was "primarily driven by revised projections of future operating results reflecting unfavorable macro-economic conditions and foreign currency exchange rate fluctuations."

The Indonesian rupiah has also fallen to its lowest level against the US dollar in more than 20 years, adversely affecting the performance of the Indonesian business.

Sue Mitchell has the full story here.

Earnings in Indonesia fell in the first half of calendar 2018, leading to flat earnings of $50.6 million from the Indonesia and Papua New Guinea division.Credit:Bloomberg

ANZ has cut its interest-only loans by nearly two-fifths over the past 18 months while keeping investor lending largely stable, but faces a test over the next two years as the volume of expiring interest only (IO) loans peaks.

The third-largest home lender on Wednesday said it had cut interest only loans to 22 per cent of its home loan mix in the September quarter from 36 per cent in the March quarter last year while loans to investors - who likely account for the vast majority of IO loans - slipped to 32 per cent from 34 per cent.

But the test for ANZ, which reported its worst financial performance in eight years as full-year cash profit from continuing operations fell 5 per cent to $6.49 billion, will come in the current six-month trading period and next year and a half as the value of IO loans due to expire peaks.

The bank faces $10 billion-worth of expiring IO loans over the six months to December and the figure will hold at $9 billion each half until June 2020, figures the bank disclosed on Wednesday show.

Michael Bleby has the full story here.

Housing in WA's Port Hedland: The mining-dependent state still represents the worst part of ANZ's home loan portfolio.Credit:Erin Jonasson

Coles managing director Steven Cain plans to 'keep a lid" on food prices, saying the retailer will only grant supplier requests for price rises when they are justified by rising costs.

Mr Cain, who took the helm from John Durkan in September, has indicated Australia's second-largest food retailer will continue to take a tough stance on suppliers seeking to raise prices, despite growing calls for a royal commission into the major supermarket chains' treatment of suppliers.

"Our job is to keep a lid on rising prices," Mr Cain, former managing director of Metcash's supermarkets and convenience business, told The Australian Financial Review.

"We're not going to change our strategy with regard to price increases."

Sue Mitchell has the full story here.

Coles will 'keep a lid on rising prices', says managing director Steven Cain.Credit:Sasha Woolley

Activist hedge fund target Corporate Travel Management has responded for the first time to VGI Partners' claims its accounting raises "red flags" and it runs a network of "phantom" offices, saying the hedge fund "misunderstands or misrepresents" aspects of the listed travel business.

The company separately told the market it was trading at the "top end" of its issued 2018-19 guidance, being "underlying" earnings of $144 million to $150 million. However this was not enough to counter the weight of VGI's claims.

At 12.15pm, Corporate Travel's shares were down 22.2 per cent at $21.52, its lowest level since January 15. The shares have fallen 36 per cent from their 52-week high.

Managing director and founder of the Brisbane-based group, Jamie Pherous, told investors on a conference call: "I want to make it crystal clear there are absolutely no issues of substance identified in the review." He claimed that in his interactions with VGI, ahead of it going public with its concerns, the hedge fund took an informal tone that masked its real intentions.

Vesna Poljak and Mark Ludlow have the full story here.

Jamie Pherous, Corporate Travel's boss, will appear at the target's annual meeting on Wednesday.Credit:Ryan Stuart

Healthscope chairman Paula Dwyer has received a "first strike" against its remuneration report and says the private hospital operator's board has not yet made a decision on whether to grant due diligence to BGH Capital following its renewed offer but said it was making "huge progress" on other fronts.

"There is considerable value for all shareholders at stake, and we believe that all shareholders should share in any value crystallised," the under-fire chairman told shareholders at what is expected to be a contentious annual meeting on Wednesday.

"We are not yet in a position to make a decision in relation to the proposal from the BGH/Australian Super Consortium," she said. "We will update shareholders when we have completed our assessment."

Ms Dwyer was re-elected as chairman, despite concerns about a possible protest vote, while Michael Stanford was elected as a non-executive director.

Carrie LaFrenz has the full story here.

"There is considerable value for all shareholders at stake, and we believe that all shareholders should share in any value crystallised," says chairman Paula Dwyer about the proposal.Credit:Dominic Lorrimer

Australian shares are still trading flat despite a rally just after midday. The benchmark index hasn't dropped more than six points below yesterday's close at any point today.

The S&P/ASX 200 index is down just 0.8 points at 5804.3.

BHP Billiton is weighing the market the most with a 1.3 per cent loss. CSL, Telstra and Westpac are also trading lower.

Coroproate Travel Management is down 21.5 per cent, Orocobre is down 5.1 per cent and Infigen Energy has fallen 5.1 per cent.

Commonwealth Bank, ANZ, Macquarie Group and AMP are all leading the index higher with some solid gains while Woodside Petroleum is also trading higher.

NIB Holdings is trading 7.1 per cent higher, Reliance Worldwide is up 5.7 per cent and Challenger is up 4.7 per cent.

China's yuan hit a 10-year low on Tuesday, adding to the risk of further attacks on Beijing from the United States as the world's two biggest economies prepare for 11th hour talks to head off a full-blown trade war.

According to some reports, the US is preparing to announce by early December tariffs on all remaining Chinese imports if talks next month between presidents Donald Trump and Xi Jinping fail to defuse the tit-for-tat tariff battle.

The US this year has already imposed tariffs on $US250 billion in trade with China. Ten per cent tariffs on $US200 billion in imports that took effect in September are due to increase to 25 per cent on January 1. Trump has also threatened to impose tariffs on the remaining goods imports from China, which last year were worth $US505 billion.

Michael Smith has the full story here.