CIMIC Group – Exit Cost From the Middle East

Posted on | by Leon Hinde

 ASX:CIM will take a one-off impact of ~$1.8b in FY19 from the impairment of the entire BICC division. This represents all of CIM’s exposure in relation to BICC, including shareholder loans and financial guarantees.

FY19 underlying NPAT is expected to be $800m, excluding the impact from the BICC writedown. The company will suspend its next dividend payment which saves around $270mn.

CIMIC’s middle east exposure has been a negative overhang for the past 10 years and we see this step as an important de-risking outcome for investors. Going forward, CIMIC will focus on Australia, New Zealand, and Asian business opportunities. We remain bullish on the macro trends supporting the infrastructure sector.

 

 

Qantas – Algo Buy Signal

Posted on | by Leon Hinde

Qantas Airways is under Algo Engine buy conditions and is now a current holding in our ASX 100 model.

The switch from sell to buy conditions means the stock has automatically been added, however, traders may wish to watch the shorter-term indicators for confirmation of the change in trend.

The below graph highlights the key trend signals to watch and we forecast buying support to build near the $6.50 level.