Australian Market Trading Day Wrap 17 February 2017

SUNSET STRIP

***SALES COMMENTARY > Blue Ocean Equities Pty Ltd and associates may hold shares in the stocks mentioned in this email and this position may change at any time without notice***

INVESTMENT MOTTO: “Life is all about cycles. You evolve with the cycle or it runs over you.” MARKET SNAPSHOT AND INTRADAY S&P 200 CHART

COUNTRY LAST % CHANGE COM/CURR/YIELD LAST % CHANGE NZ 7093.53 -0.09 SPTGLD 1238.38 -0.07 AUSTRALIA 5805.80 -0.18 AUDUSD 0.7709 0.19 JAPAN 19232.35 -0.60 NZDAUD 0.9345 -0.35 SOUTH KOREA 2077.09 -0.23 GBPAUD 1.6219 -0.06 SINGAPORE 3110.07 0.43 EURAUD 1.3845 -0.20 CHINA 3211.78 -0.55 EURUSD 1.0673 -0.01 HONG KONG 23999.59 -0.45 USDJPY 113.3535 0.10 FRANCE 4899.46 -0.52 DXY 100.47 0.00 UK 7277.92 -0.34 US-DOWJON 20619.77 0.04 US BOND10 2.4575 -1.39 US-NASDAQ 5814.90 -0.08 US BOND30 3.0616 -0.58 US-SP500 2347.22 -0.09 AUS BOND10 2.8066 0.34 CHART OF THE DAY:

US Inflation > The near decade long down trend in US inflation has been broken as the latest data moves into 5-year high level. We are seeing similar trends around the world including China. US Fed is sitting on -2% real interest rates. The strength in the economy based on unemployment and consumer spending since mid-2016 suggests that US Fed is behind the game on raising rates and will have to play catch up. Despite flagging 3 rate hikes in 2017, market is only expecting 2 rate hikes. The US economic strength is pointing to market surprise on rate hikes and downgrades to asset valuations in the medium term.

MARKET COMMENTARY:

1. Local market ran out of steam as US rate cycle and US political uncertainties started to weigh on sentiment as the weekend rolls in. 2. Health Care and Resources weighed on the market while Gold stocks were the bright light. 3. US politics continues to raise risk while US economic data remains strong. US Dollar index fell overnight and boosted Gold. 1 Page

Mathan Somasundaram > [email protected] Sales Commentary Alex Balzuhn > [email protected] Australian Market Trading Day Wrap 17 February 2017

4. US Fed updates are in play for the next month (1) Chair Janet Yellen continues her Semiannual Monetary Policy Report to the Congress tonight (2) Minutes from last month’s FOMC meeting will be released on the 22nd (3) FOMC’s next meeting on 14/15th March. 5. Commodity prices outlook remains robust as China continues to keep the credit expansion and inefficient producer shutdown going. 6. Mining Services sector remains cheap exposure to resource sector…recovery story in play as the unexpected commodity cycle recovery in 2016 will start to show solid cashflow in miners and support better capex outlook. 7. China credit growth driving commodity and asset price recovery…

8. Singapore recovers on manufacturing from the lows…

9. OPEC compliance on supply cuts…

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Mathan Somasundaram > [email protected] Sales Commentary Alex Balzuhn > [email protected] Australian Market Trading Day Wrap 17 February 2017

INTERESTING MOVES OF THE DAY: (1) SEK (+6%) on update on Chinese Zhaopin plans (2) LNK (+4%) on strong result showing the growth in the business (3) AQG (+2%) on Copler Sulfide project update (4) BBN (-7%) on solid result not living up to market expectations (5) MTR (-6%) on solid result despite weakness in city/corporate business (6) VRL (-6%) on remaining in downgrade cycle keeping the negative sentiment

TOSH’S TIPS: Alliance Aviation (AQZ, BUY) recently produced a solid result in line with our expectations. AQZ’s diversification strategy is a real positive with services earnings offsetting the weakness in contract and charter biz. Strong cashflow was a highlight allowing for a further reduction in debt and we expect a final divi announced later this year, with potential for an interim divi 1H18… AQZ still has 16/21 of the Austrian airlines aircraft to be brought into service so against a relatively fixed cost base we see considerable leverage available, especially with potential for new business in Tourism, Charter, Joint Venture and Aviation Services. AQZ is trading at a 30% discount to its NTA yet it generates a positive and increasing ROE… 17% EPS growth, P/B 0.64, PE 6.8

AQZ.ASX@AUX: 0.79 MA (AQZ.ASX@AUX): 200 0.6903, 100 0.7703,50 0.7629 1.1

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Rhipe (RHP, BUY) Mgmt reiterated delivering $4m reported EBITDA… RHP continues to offer a deep value opportunity to own Microsoft’s favoured reseller in Asia. RHP is the No1 Asia Pac reseller and now the 6th largest in the world. This is a key strategic asset for any company that wants a global footprint (my understanding is Microsoft wants a global reseller!) They have now been appointed to look after South Korea which one of the two largest SPLA markets in Asia Pacific excluding Japan (APEJ) for Microsoft… Rhipe is in our offices today and in Melbourne on Monday. Ask to meet…

RHP.ASX@AUX: 0.4 MA (RHP.ASX@AUX): 200 0.8151, 100 0.7125, 50 0.5465 1.8

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Mathan Somasundaram > [email protected] Sales Commentary Alex Balzuhn > [email protected] Australian Market Trading Day Wrap 17 February 2017

Sigma Pharma (SIP, N/R) trading update… SIP had flagged that its Reported EBIT for the year to March 2017 is likely to be broadly in line with last year. Underlying EBIT is expected to be about 12% above last year. On our forecasts (taking into account it’s update at its AGM in January 2017) API is growing at least as fast as SIP, if not faster. Yet Australian Pharma (API, BUY) continues to trade at a material PE discount to SIP: 15.5x vs 19.8x (noting the different year ends). The differential simply should not be this large.

SIP.ASX@AUX: 1.19 MA (SIP.ASX@AUX): 200 1.2643, 100 1.295, 50 1.2431

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Retail: looking at the David Jones result I would be selling Myer.. and while the press focuses on the negatives such as Herringbone there are some doing well such as Specialty Fashion Group and one of our covered stocks PMV. We pushed the fact that Premier Investments (PMV, BUY) would perform well due to the strength of Smiggle and Peter Alexander and Phil has had a look and thinks it still offers good buying… On Phils numbers it is on 16x then you strip out cash and equivalents its 14x then adjust for franking credits and you get to 12x… Ask to speak to Phil on this name.

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Mathan Somasundaram > [email protected] Sales Commentary Alex Balzuhn > [email protected] Australian Market Trading Day Wrap 17 February 2017

STOCKS AND SECTORS IN PLAY TODAY: 1. Abacus Property Group (ABP, +1.68%) > Abacus Property Group said consolidated AIFRS statutory profit for the half year more than doubled from a year ago to $191.7 million (from $75.5 million). Underlying profit rose 22 per cent to $69.5 million and net tangible assets rose 10.5 per cent to $2.94 per security. Cashflow from operations rose to $64.6 million from $40.6 million and the group realised north of $80 million in cash from residential developments. Abacus boss Frank Wolf described the result as "impressive". "We continue to see reward for our diversified multi-platform business with strong contributions to both underlying profit and NTA from all sides of the business. 2. ASX Ltd (ASX, -0.50%) > ASX Ltd has announced a 3 per cent rise in first-half net profit after tax to $219.4 million on revenue of $386.6 million, up 2.8 per cent on a year ago. EBITDA jumped 1.9 per cent to $296.5 million. The operator of Australia's primary securities exchange said it will pay an interim dividend of $1.02 on March 29. 3. ANZ (ANZ, +1.85%) > ANZ CEO Shayne Elliot has delivered a 31 per cent rise in cash profit to $2 billion over the three months to December 31, well above expectations and has put forward a slightly brighter outlook than at the bank's full year results. Investors responded positively to the update, with ANZ Bank shares up 53c or 1.75 per cent to $30.74, putting the bank within striking distance of its 52 week high of $31.84. The result was buoyed by a number of factors including higher revenues, falling expenses, the sale of property and a lower provisioning charge. A fall in the bank's net interest margin has raised concerns however with some interpreting the "decline of several basis points" as more than five basis points. Mr Elliott was cautiously optimistic about the rest of the calendar year in contrast with a more tempered view about the outlook in November 2016. Provisions at the bank were $283 million for the quarter. AFR 4. Auckland Airport (AIA, +0.47%) > New Zealand's Auckland Airport’s after tax profit for the half year ended December rose 22.5 per cent to $NZ141.8 million on revenue of $NZ310.9 million, up 10 per cent on the previous year. The dual-listed company said underlying profit jumped 18.6 per cent to $NZ123.5 million. It will pay an interim dividend of NZ10c a share, up 17.6 per cent. 5. Baby Bunting (BBN, -6.85%) > Baby Bunting said its net profit in the six months ended January 1 more than doubled to $5.223 million from $2.26 million in the year-earlier period. Revenue climbed 24.8 per cent to $135.07 million from $108.2 million a year ago. The baby clothing and accessory group said it would pay a 2.9c interim dividend on March 17 to shareholders of record on March 3. 6. Bapcor (BAP, -0.17%) > Australia's $5 billion car parts market is being hit with the same discounting disease that is hurting other parts of the retail sector as big players such as Repco slash prices to drive more foot traffic into its 300 stores. ASX-listed competitors Bapcor, which owns Autobarn and Autopro, and Super Retail Group, which owns the Supercheap Auto chain, have been caught up in the battle as Repco becomes increasingly aggressive. Repco is offering 20 per cent off parts and accessories this month to people who are members of road motorists organisations such as the NRMA in NSW, RACV in Victoria, RAA in South Australia and RACQ in Queensland in its latest deals, with the latest discounting coming after other aggressive catalogue sales promotions. Bapcor chief executive Darryl Abotomey said on Thursday the discounting by rivals was frustrating and the only real worry in the company's broader car parts business which was booming. The trade division led by the Burson stores, which sell to mechanics and are suppliers to Ultra-Tune, is delivering substantial same-store growth of more than 5 per cent. The trade business makes up about two-thirds of total Bapcor revenues. 7. Bubs Australia (BUB, +3.03%) > Baby food and infant formula maker Bubs Australia's net loss widened massively in the half year ended December 31 to $3.5 million from $183,162 the previous year, due to one-off accounting and legal costs. Revenue at the company, which made its stockmarket debut on January 3, fell 20.5 per cent to $1.7 billion and its earnings loss before tax widened to $1.3 million from $183,162. The company, formerly known as Hillcrest Litigation Services, has declared no dividend for the half. In another announcement to the ASX on Friday, the company said pharmacy wholesalers Sigma Pharmaceuticals and Symbion have joined its customer base, now giving it access to north of 5,000 pharmacies across Australia. Last month, chairman Alan van Noort stepped down as chairman just over a week after its listing on Australia's stock exchange. 8. Discretionary Retail Sector > South African retailer Woolworths Holdings has blamed aggressive discounting and a private label "stuff up" for modest earnings growth at upmarket retailer David Jones. David Jones' earnings rose just 1.9 per cent to $106 million in the first half of 2017, reflecting tough trading in the department store and clothing sectors in the lead-up to Christmas, as sales growth slumped from 11 per cent to just 4 per cent. Gross margins rose from 38.7 per cent to 39.4 per cent, boosted by better sourcing, but the gains were offset by higher administration, rent and labour expenses and the cost of launching David Jones' new private label range. Department store earnings fell $1 million or 0.9 per cent to $97 million. The results auger poorly for arch rival Myer, which is due to report December-half results next month. Woolworths Holdings chief executive Ian Moir said widespread discounting, lacklustre consumer sentiment, major changes to David Jones' product range and a new service model had taken a toll.

9. DUET Group (DUE, -0.36%) > DUET Group said net profit after tax for the half year ended December 31 fell to 5 $71.6 million from $108.5 million a year ago. Revenue and other income from ordinary activities rose to $853 Page

Mathan Somasundaram > [email protected] Sales Commentary Alex Balzuhn > [email protected] Australian Market Trading Day Wrap 17 February 2017

million from $809.7 million. The company said an interim dividend of 9.250c per stapled security was paid on February 16. It was unfranked. DUET reaffirmed its FY distribution guidance for FY17 of 18.5c per stapled security. 10. Fleetwood Corp (FWD, -0.51%) > Fleetwood Corp's net profit for the December half almost tripled (up 165 per cent) to $3.33 million on revenue of $152.6 million, up 12 per cent on a year ago. It will not pay an interim dividend. 11. Free to Air Media Sector > On Thursday Ten Network chief executive Paul Anderson spelt out what everyone else in television already knew – that the party, that long splendid display of hubris, excess and good times that has marked the industry for decades, is over. Seven West Media chief executive Tim Worner made the same point the day before, though he didn't actually put it like that. What's really telling is that he tried to say the reverse. How is television advertising? It's looking a little stronger for 2017, Worner told analysts, and Seven shares promptly got a kicking, down 9 per cent at one point. Stronger ads? Not so much, Ten said in a guidance update on Thursday: "The advertising market remained extremely short in terms of forward bookings". Yet despite signalling a dreadful result for the half, its shares closed just 3¢ down. Of course this is television, so while the three networks say what they must for analysts and fund managers, their most powerful messages are to each other. 12. Gold Sector > Investors should probably be a little more nervous, according to one BlackRock money manager. Stocks have rallied to records amid signs of stabilisation in China's economy and bets that President Donald Trump will boost US infrastructure spending, roll back regulations and cut taxes. While the stock surge and below- average volatility show investors are more optimistic, markets are underpricing global political risks, said Russ Koesterich, who helps manage the $US41 billion BlackRock Global Allocation Fund. He recommends gold as insurance. Looming elections in Europe and political uncertainty in the US are among developments that could shift investor sentiment, Koesterich, said. Adding to the threat is the potential impact of Britain's exit from the European Union and a debt crisis in Greece. Such concerns have helped boost haven demand for gold, which has climbed almost 8 per cent this year after posting the worst quarter since 2013. 13. IAG (IAG, -1.00%) > A decade-long relationship with the Singapore central bank has resulted in IAG becoming the first Australian insurer to set up an insurtech hub in Singapore, under a regulatory regime that the company says offers tax incentives and collaboration opportunities not always found in Australia. Following IAG's launch of a $75 million venture capital fund to invest in start-ups in December, the Australian insurance giant has revealed it will launch an insurtech hub in Singapore called Firemark Labs. It will act as an incubator for IAG to work with Asian-based start-ups and research and technology providers to create customer-centric products and services. Julie Batch, chief customer officer at IAG, says the insurer has had a long-term presence in Singapore, having set up IAG Re Singapore in 2006. Over that period it has built a strong relationship with the Monetary Authority of Singapore (MAS), leading to the development and support of the hub. "Singapore is recognised as having one the most developed fintech landscapes with growing insurtech scene," Ms Batch said. 14. Link Group (LNK, -4.17%) > Link Group, which provides record keeping technology and information solutions, has delivered a first-half net profit after tax of $41.6 million, compared with a loss of $4 million the previous year. Revenue inched 1 per cent higher to $395.8 million. Operating EBITDA jumped 20 per ecnt to $108.5 million. The company declared an unfranked interim dividend of 6c a share. 15. Mantra (MTR, -5.63%) > Hotel and resort operator Mantra has delivered a $6.3 million jump in net profit for the December half to $30.5 million. Revenue rose by $48.8 million to $356.2 million and profit before income tax rose to $44.2 million from $34.9 million a year ago. It will pay an interim dividend of 5c a share, fully franked, on March 22. The group paid a record $28 million to secure the management rights to Tim Gurner's FV high-rise development in Brisbane's Fortitude Valley. The record-breaking deal will see Mantra manage close to 1000 apartments in the three-tower precinct. 16. Medibank Private (MPL, -3.91%) > The problems in private health insurance crunched Medibank Private's operating profits in the December half year but a big jump in investment income left the company with a flat bottom line profit. The investment boom papered over Medibank's health insurance problems for now and net profit rose 1.9 per cent - about the inflation rate - in the six months ended December 31 to $231.9 million, from $227.6 million previously. Higher claims by members, investments in customer initiatives aimed at winning back disillusioned customers and amortisation on a new information technology system dragged health insurance operating profits down 8.2 per cent to $249.4 million. Overall operating profit fell 6.4 per cent to $250.2 million. Chief executive Craig Drummond has previously warned that private health insurance is at a "tipping point" with members downgrading their policies or dropping their cover altogether in protest at years of health cost inflation running at two to three times inflation and that Medibank has not been not serving its customers well. 17. Medipass Solutions > National Australia Bank and Westpac Banking Corp are attacking the $100 billion national health market by separately investing in two medical technology start-ups which are making it easier for patients to book and pay for allied health services and simplifying financial management for doctors. Through its corporate

venture fund NAB Ventures, National Australia Bank has invested in Medipass Solutions, a new company created 6 from the start-up Localz, which will roll out a customer-facing application for booking health services like optical or Page

Mathan Somasundaram > [email protected] Sales Commentary Alex Balzuhn > [email protected] Australian Market Trading Day Wrap 17 February 2017

therapy. Westpac, meanwhile, has taken an equity stake in Surgical Partners, which has built middleware for GPs and specialist doctors to help them integrate medical services payments with their own accounting systems. Nether bank would disclose the size of their investments but both are examples of banks taking a deeper role in the digital ecosystems of business customers, as payments become more deeply embedded in services arranged over smartphones. 18. Mining Sector > A rerun of China's massive stimulus during the financial crisis is set to offer another boost to global metals prices, according to Goldman Sachs Group Inc. Strong credit expansion has "remarkably bullish" implications for the nation's metals-intensive industries as fixed-asset investment and manufacturing are poised to accelerate, the bank said in a report. New lending to the so-called old economy in December and January jumped by 1.1 trillion yuan from a year earlier, equivalent to more than one and a half years of US President Donald Trump's mooted infrastructure package, it said. Industrial commodities have enjoyed a rebound in the past year on improved demand from property and infrastructure in China, the world's top metals user. The benchmark copper price in London is up 32 per cent from a year ago, while iron ore has nearly doubled. This time last year, the Chinese government embarked on a massive credit-driven stimulus in response to an economic slowdown, boosting credit at a pace not seen since the 2009 financial crisis. "The resulting acceleration in metals demand is expected to push the copper market, as well as other base metal markets such as nickel and zinc, into deficit, leading to inventory draws, a tightening of the futures curve spreads, and higher prices," the bank's analysts including Mikhail Sprogis and Jeffrey Currie wrote in the note dated February 16. 19. MyState (MYS, -0.64%) > Banking and wealth management group MyState has reported a 0.7 per cent rise in net profit after tax to $15.2 million for the December half, on revenue from operations of $61.8 million, up 0.9 per cent on the previous year. It will pay an interim dividend of 14c a share, fully franked and unchanged from a year ago. Payment will be made on March 10. As at December 31, total assets were $4.7 billion, up 7.3 per cent on the previous year, while funds under management were 3.8 per cent higher at $1.04 billion. The financial services group this month banned funding for off-the-plan borrowers in hundreds of suburbs across four states amid growing concern about over-supply, a drop in demand and backlog of unfinished deals. 20. Pacific Smiles (PSQ, +6.06%) > Pacific Smiles said first-half net profit jumped 10 per cent to $5.4 million and revenue rose 9.4 per cent to $45.6 million. EBITDA climbed 13.8 per cent to $10.7 million. The company has kept its EBITDA FY guidance unchanged at $21.7 million to $23.2 million. The company opened four new dental centres during the period, taking the total to 62. MD John Gibbs said: "Our roll-out continues to accelerate, new centres are performing well, same centre growth was 4.4 per cent after a slow start to the period, patient satisfaction is high and it was a record half in terms of patient fees." It has declared an interim dividend of 2.2c a share, fully franked. The payout will be made on April 4. 21. Rio Tinto (RIO, -2.14%) > Rio Tinto Group has asked banks to pitch for a role advising on the divestment of its last remaining coal operations in Australia, people with knowledge of the matter said. The London-based company has decided to pursue a sale of its Hail Creek and Kestrel mines after receiving unsolicited approaches from potential buyers, according to the people, who asked not to be identified because the details are private. The assets in Queensland state's Bowen Basin, which mainly produce coking coal used in steelmaking, could fetch as much $2 billion, people familiar with the matter said earlier this month. Rio, the world's second-biggest miner, has been divesting coal assets since dismantling its energy division in 2015 and last month agreed to sell $US2.45 billion of Australian mines to a company controlled by China's Yanzhou Coal Mining Co. 22. Santos (STO, -0.50%) > Santos has posted a full-year net loss of $US1.05 billion after a $US1.1 billion write- down on its Queensland venture, but has offered the prospect of resuming dividend payments as it recovers from the oil price crash. The loss, which was expected, narrowed from $US1.95 billion in 2015. Chief executive Kevin Gallagher, who took the post early this year, said Santos's turnaround strategy was "starting to deliver". The oil and gas producer was free cash flow positive at an oil price of $US36.50 a barrel, significantly lower than current prices, and generated $US370 million of free cash flow over the last eight months of the year. "This is pleasing progress but there is still more to be done," Mr Gallagher said. 23. South32 (S32, +2.67%) > South32 chief executive Graham Kerr says the diversified miner is "close" to being able to return excess cash to shareholders and is prepared to do so out of the normal six-monthly cycle. Mr Kerr was peppered with questions from analysts about the company's plans for its growing cash pile on Thursday after it declared an interim dividend of US3.6¢ per share, in line with its dividend policy but slightly below consensus forecasts. The diversified miner has taken a conservative approach to utilising its strong balance sheet ever since it was spun-out of BHP Billiton in May 2015, taking until November 2016 to make its first significant acquisition, but has long vowed not to hold excess cash on its balance sheet. Its strong free cash flow generation during the December half, of $US626 million for a net cash position of $US859 million, elevated market expectations for a strong interim dividend. 24. Supermarket Sector > Fears of a full-blown price war have re-emerged after Coles ploughed $50 million into reducing grocery prices in the December quarter in response to increased competition from Woolworths and Aldi.

Last year, Coles boss John Durkan reassured investors that Coles would react in a "rational and sensible" way to 7 Woolworths' $1 billion investment in prices and service, funding price reductions from cost savings rather than Page

Mathan Somasundaram > [email protected] Sales Commentary Alex Balzuhn > [email protected] Australian Market Trading Day Wrap 17 February 2017

sacrificing margins. "We are not going to be distracted by short-term variances in other people's strategy," Mr Durkan said in October. But he took investors by surprise on Wednesday, revealing that Coles had doubled its investment in price reductions in the three months ending December as competition from Woolworths and Aldi stepped up. "We saw further investment across the period – it wasn't just short-term investment – and therefore decided we needed to make sure that we were going to be competitive for the long term because it looked more than just short-term activity," Mr Durkan said. 25. Sydney Airport (SYD, -0.99%) > Sydney Airport raised its 2017 dividend guidance after stronger aeronautical and retail revenues helped lift 2016 annual net profit 13 per cent to $320.9 million. The airport said "confidence in the business outlook" allowed it to forecast a 2017 dividend of 33.5¢ per share, although analysts had been expecting a slightly higher dividend closer to 34¢ per share and its shares fell 4¢ to $6.17 in early trading on Thursday. The company will pay a full-year dividend of 31¢ per share for 2016. Total revenue climbed 11 per cent in the year ended December 31 to $1.365 billion from the year-earlier $1.229 billion. Aeronautical revenue rose 17.4 per cent to $614.2 million. Total passenger numbers increased 5.6 per cent to 41.9 million, with international passenger numbers jumping 8,9 per cent to 14.9 million as airlines increased seat capacity, including Qantas, Qatar Airway and American Airlines. 26. Telstra (TLS, -0.21%) > Telstra chief executive officer Andy Penn has moved to quell investor nerves about long- term damage to its profits from the national broadband network, declaring a strategy to put itself at the centre of Australia's "internet of things" will help plug the earnings gap. Mr Penn was speaking to The Australian Financial Review as anxious investors were in the process of pushing Telstra shares down 6.55 per cent to $4.85 on Thursday, following underwhelming half-yearly profit numbers that highlighted a growth hit and profit margin squeeze from the shift to the NBN. He said Telstra's plan to emerge unscathed from the NBN revolved around continued investment in both its mobile networks and emerging technologies that would be central to the changing ways Australian businesses and consumers used the multitude of connected devices on the internet of things, and the increased computing power available to them. 27. Vale > Brazilian miner Vale said it produced a record 349 million tonnes of iron ore in 2016, above its own guidance, helped by strong performance at mines in northern Brazil and the successful start of its new S11D mine. The world's largest producer of iron ore had forecast that output would be at the lower end of a range of 340-350 million tonnes. In its 2016 production report, Vale said it produced 92.4 million tonnes in the fourth quarter, up 4.5 per cent on the same period in 2015. The average Fe content was 63.9 per cent in 4Q16, remaining in line with 3Q16. Full-year production rose 1 per cent on the previous year. The company said it had continued to halt or reduce higher cost tonnes from its mines in the southeastern state of Minas Gerais, offsetting them with cheaper production from northern Brazil where its costs are lower and quality higher. 28. Village Roadshow (VRL, -5.57%) > Village Roadshow shares have slumped to their lowest level in more than four years after the company suspended its dividend and said it could be forced to sell assets in an effort to cut debt. The stock hit its lowest point since September 2012 after a disappointing first half performance by Village Roadshow's Gold Coast theme parks contributed to a net debt that now stands at 3.27 times company earnings. "The board considers this an unacceptable level of gearing and is focused on reducing this significantly," Village Roadshow said in a statement to the Australian Securities Exchange on Friday. "This includes a range of measures including the active pursuit of potential asset sales and the decision not to pay an interim dividend." Village Roadshow shares fell as much as 14.6 per cent as the company, which also operates cinema chains and other theme parks, reported a loss for the six months to December 31 of $6.7 million. 29. Virgin Australia (VAH, -2.56%) > Virgin Australia expects to launch direct services between Australia and mainland China, Hong Kong and a another South East Asian city in the next 12 months as part of the airline's first major international push for six years. Virgin on Friday announced the launch of a new route between Australia and Hong Kong mid-year as part of a new alliance with its Chinese partner HNA Group. However, it is also understood there are plans to launch additional direct services to mainland China by the end of the calendar year along with a third Asian destination. The move, which is Virgin's first big offshore push since it launched Abu Dhabi flights in 2011, is part of chief executive John Borghetti's long-term vision for the international business which will focus on capturing growing outbound traffic from Australia to the United States and inbound traffic from China. The international move comes as it posted a weak half-year result due to weak demand in the domestic aviation market, the source for a bulk of its revenue. 30. Whitehaven Coal (WHC, -2.38%) > Whitehaven Coal has kept its dividend powder dry on the day it revealed half- year profits were 20 times higher at $157.5 million. A dramatic rebound in coal prices and the ramp-up of the new Maules Creek ensured the result was always going to be a big improvement on the $7.8 million net profit for the same period of last year. The result was slightly below some analyst projections, but roughly in line with others. Analysts expect Whitehaven to make more money in its second half thanks to the lagged effect of coal prices. Very few expected Whitehaven to pay an interim dividend, and those cautious expectations proved accurate. The company reduced its debt from $835 million to $655 million since the comparable period of last year, and many

believe the company will resume dividend payments in August now that debt is below 17 per cent. 8 Page

Mathan Somasundaram > [email protected] Sales Commentary Alex Balzuhn > [email protected] Australian Market Trading Day Wrap 17 February 2017

AROUND THE GROUNDS:

Source – www.money.cnn.com

US FEAR AND GREED INDEX:

Source – www.money.cnn.com

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Mathan Somasundaram > [email protected] Sales Commentary Alex Balzuhn > [email protected] Australian Market Trading Day Wrap 17 February 2017

MARKET MOVERS AND SHAKERS:

MAJOR SECTOR PERFORMANCES OVER THE DAY:

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Mathan Somasundaram > [email protected] Sales Commentary Alex Balzuhn > [email protected] Australian Market Trading Day Wrap 17 February 2017

TODAY’S TOP 30 WINNERS AND LOSERS IN S&P 300:

Daily Price Consensus Consensus 2016 EPS 2017 EPS 2016 Div 2017 Div Code Company Name Market Cap ($m) Price ($) 2016 PE 2017 PE Newsflash Change (%) Target Price ($) Rating GROWTH GROWTH Yield Yield LYC Lynas Corporation 422.51 0.14 12.50 - - N/A N/A N/A N/A N/A N/A N/A SEK Seek Limited 5192.74 15.78 5.69 15.23 HOLD 0.30 0.27 -7.96 11.36 2.25 2.57 SEK Provides Update on Potential Zhaopin Ltd Transaction IMF IMF Bentham Ltd 316.70 1.96 5.68 2.05 BUY 0.12 0.15 339.22 -14.47 3.41 4.09 N/A PRU Perseus Mining Ltd 340.60 0.35 4.55 0.40 HOLD -0.29 -0.06 -110.72 -375.27 0.00 0.00 N/A SXY Senex Energy Limited 447.07 0.37 4.29 0.31 HOLD 0.54 -1.96 98.52 -127.72 0.00 0.00 N/A LNK Link Administration 2590.54 7.50 4.17 8.38 HOLD 0.27 0.23 N/A 17.83 1.00 2.33 Link Administration Swings to 1H Net Profit A$41.4 Mln RSG Resolute Mining 1274.98 1.79 3.18 1.91 BUY 0.08 0.09 130.97 -8.68 0.24 0.94 N/A GXY Galaxy Resources 1034.54 0.54 2.86 0.71 BUY -1.08 0.14 -233.33 870.00 0.00 0.00 N/A S32 South32 Limited 13948.26 2.69 2.67 3.10 BUY 1.14 0.09 -87.01 1157.42 0.19 5.08 N/A DRM Doray Minerals Ltd 146.34 0.42 2.44 0.65 BUY 0.08 0.14 -45.65 -39.80 0.00 0.00 N/A SEH Sino Gas Energy 215.42 0.11 2.44 0.21 STRONG BUY -0.18 0.50 -46.90 135.47 0.00 0.00 N/A AAC Australian Agricult. 815.72 1.50 2.40 2.33 STRONG BUY 0.17 0.13 N/A 31.43 0.00 0.00 N/A AQG Alacer Gold Corp. 252.93 3.00 2.39 3.65 HOLD 0.34 0.38 -57.92 -10.35 0.00 0.00 Copler Sulfide Project Photo Update MLX Metals X Limited 524.03 0.88 2.33 0.85 BUY 0.27 0.15 -64.91 82.44 3.41 0.76 N/A MVF Monash Ivf Group Ltd 410.77 1.79 2.29 2.00 BUY 0.15 0.14 18.22 9.93 4.48 5.05 N/A DCN Dacian Gold Ltd 329.15 2.30 2.22 3.13 BUY -0.37 -0.49 -32.00 23.33 0.00 0.00 N/A SBM St Barbara Limited 1362.69 2.80 2.19 2.75 BUY 0.10 0.10 243.75 1.09 0.00 0.00 N/A GHC Gen Healthcare REIT 412.35 1.92 2.13 1.96 HOLD 0.19 0.19 9.82 1.51 4.61 4.69 N/A PLS Pilbara Minerals Limited 594.58 0.48 2.13 0.90 BUY -0.38 -0.53 N/A 28.00 0.00 0.00 N/A GDI GDI Property Grp 530.74 1.01 2.03 1.09 STRONG BUY 0.11 0.11 7.32 3.41 7.66 7.76 N/A RFF Rural Funds Group 359.38 1.77 2.02 1.75 STRONG BUY 0.08 0.12 150.41 -36.68 4.87 5.27 Appointment to RFM Audit Committee OSH Oil Search Ltd 10734.98 7.19 1.99 8.00 BUY 0.77 0.26 -71.20 194.90 0.60 1.61 N/A SKC Skycity Ent Grp Ltd 2415.18 3.77 1.89 3.88 HOLD 0.15 0.17 27.07 -7.11 5.16 5.00 DISCLOSURE OF DIRECTORS RELEVANT INTERESTS ANZ ANZ Banking Grp Ltd 88697.68 30.77 1.85 30.00 HOLD 0.15 0.13 -22.15 13.41 5.20 5.23 ANZ 1Q Profit Steady, Signals Strong Capital Position SGF SG Fleet Group Ltd 847.65 3.41 1.79 4.41 BUY 0.16 0.13 29.14 19.50 4.01 4.71 N/A GOR Gold Road Res Ltd 487.85 0.57 1.79 0.80 BUY -0.63 -0.51 28.76 -24.58 0.00 0.00 N/A A2M The A2 Milk Company 1653.66 2.35 1.73 2.47 BUY 0.57 0.29 N/A 94.33 0.07 0.76 Appendix 3B EVN Evolution Mining Ltd 3947.37 2.39 1.70 2.55 BUY 0.16 0.13 33.48 22.11 1.00 1.61 N/A ABP Abacus Property Grp. 1705.53 3.03 1.68 3.12 HOLD 0.14 0.13 -6.37 6.40 5.61 5.82 ABP HY17 results announcement CL1 Class Limited 352.86 3.07 1.66 3.75 BUY 0.63 0.46 N/A 36.84 1.24 1.34 N/A

Daily Price Consensus Consensus 2016 EPS 2017 EPS 2016 Div 2017 Div Code Company Name Market Cap ($m) Price ($) 2016 PE 2017 PE Newsflash Change (%) Target Price ($) Rating GROWTH GROWTH Yield Yield BBN Baby Bunting Grp Ltd 311.79 2.31 -6.85 3.12 BUY 0.28 0.21 N/A 32.93 2.42 3.56 Baby Bunting 1H Net Profit More Than Doubles to A$5.2 Mln MTR Mantra Group Ltd 897.56 2.85 -5.63 3.95 BUY 0.17 0.16 13.12 9.49 3.65 4.32 Mantra 1H Net Profit Boosted by New Hotels, Resorts VRL Village Roadshow Ltd 609.95 3.56 -5.57 4.60 BUY 0.11 0.13 10.49 -15.92 7.82 6.81 Village Roadshow 1H Revenue A$542.5 Mln, Up 4% on Year EWC Energy World Corpor. 789.05 0.43 -5.49 - - N/A N/A N/A N/A N/A N/A N/A VTG Vita Group Ltd 504.54 3.15 -5.12 4.72 BUY 0.15 0.12 74.27 19.31 4.40 5.21 N/A MIN Mineral Resources. 2532.48 12.87 -4.95 11.70 HOLD 0.21 0.13 15.08 62.13 1.66 3.68 Resource & Exploration Update BPT Beach Energy Limited 1361.52 0.70 -4.79 0.70 SELL 0.33 0.10 -70.55 222.87 0.79 1.63 N/A SLK Sealink Travel Grp 465.31 4.38 -4.78 4.98 BUY 0.20 0.18 72.43 12.47 2.58 3.04 N/A ADH Adairs Limited 213.98 1.23 -4.65 2.20 BUY 0.08 0.09 24.55 -18.88 8.67 8.27 N/A WSA Western Areas Ltd 746.04 2.62 -4.38 2.70 HOLD -0.33 0.64 -135.42 151.98 0.03 0.29 N/A SIP Sigma Pharmaceutical 1340.96 1.20 -4.02 1.28 HOLD 0.22 0.19 13.87 13.95 3.60 4.23 Trading Update MPL Medibank Private Ltd 7738.75 2.70 -3.91 2.79 HOLD 0.18 0.18 51.70 1.21 4.02 4.29 Medibank 1H Net Profit A$231.9 Mln, Up 1.9% on-Year PDN Paladin Energy Ltd 231.23 0.13 -3.70 0.12 SELL -0.05 -0.07 58.54 39.07 0.00 0.00 N/A IGO Independence Group 2593.21 4.26 -3.62 3.95 HOLD 0.75 0.48 -83.85 55.45 0.27 0.73 N/A MYX Mayne Pharma Ltd 2125.77 1.37 -3.53 1.67 BUY 0.27 0.17 163.18 57.59 0.00 0.00 N/A ANN Ansell Limited 3202.56 21.00 -3.31 22.70 SELL 0.16 0.16 -20.99 2.06 2.74 2.88 QUOTED: Ex Dividend ISU Iselect Ltd 431.13 1.82 -3.19 2.23 BUY 0.40 0.22 -36.36 84.62 0.97 1.37 Announcement of buy-back - Appendix 3C ORE Orocobre Limited 795.01 3.66 -3.17 4.98 BUY -0.17 0.29 -394.37 159.42 0.00 0.00 Appendix 3B API Australian Pharm. 945.31 1.87 -3.11 1.94 HOLD 0.18 0.16 21.19 14.54 2.94 3.61 N/A ORG Origin Energy 12442.51 6.87 -3.10 7.03 HOLD 0.29 0.23 -54.64 24.29 1.91 0.21 N/A IPH IPH Limited 986.59 5.00 -2.91 6.10 BUY 0.18 0.18 56.38 1.72 4.62 4.70 N/A ALQ Als Ltd 3136.26 6.04 -2.89 6.20 HOLD 0.24 0.29 -20.87 -15.55 2.27 1.93 N/A NXT Nextdc Limited 883.47 3.02 -2.89 4.75 BUY 1.87 0.57 138.63 229.58 0.00 0.00 N/A CSV CSG Limited 227.01 0.69 -2.82 1.00 HOLD 0.09 0.09 10.00 -2.17 13.04 11.11 N/A MNS Magnis Resource Ltd 324.77 0.69 -2.82 1.40 BUY -0.36 -0.41 -22.11 10.53 0.00 0.00 N/A DMP Domino Pizza Enterpr 5125.58 56.10 -2.77 67.00 BUY 0.55 0.41 41.41 36.03 1.19 1.67 N/A SYR Syrah Resources 867.76 3.20 -2.74 5.00 BUY -0.56 -0.87 N/A 35.70 0.00 0.00 N/A QBE QBE Insurance Group 17858.11 12.68 -2.61 13.40 BUY 0.17 0.14 -14.88 20.17 4.10 4.57 Becoming a substantial holder WOR WorleyParsons Ltd 2497.14 9.86 -2.57 9.00 HOLD 0.16 0.18 -21.87 -12.09 0.00 0.11 N/A EPW ERM Power Limited 301.29 1.17 -2.51 1.15 SELL 0.14 -0.14 -36.37 -196.41 10.30 7.44 N/A

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Mathan Somasundaram > [email protected] Sales Commentary Alex Balzuhn > [email protected] Australian Market Trading Day Wrap 17 February 2017

CHECKING S&P 300 BY THE SECTOR:

 Energy stocks:

Daily Price Consensus Consensus 2016 EPS 2017 EPS 2016 Div 2017 Div Code Company Name Market Cap ($m) Price ($) 2016 PE 2017 PE Newsflash Change (%) Target Price ($) Rating GROWTH GROWTH Yield Yield SXY Senex Energy Limited 447.07 0.37 4.29 0.31 HOLD 0.54 -1.96 98.52 -127.72 0.00 0.00 N/A SEH Sino Gas Energy 215.42 0.11 2.44 0.21 STRONG BUY -0.18 0.50 -46.90 135.47 0.00 0.00 N/A OSH Oil Search Ltd 10734.98 7.19 1.99 8.00 BUY 0.77 0.26 -71.20 194.90 0.60 1.61 N/A FAR FAR Ltd 348.00 0.08 1.28 0.15 BUY -0.40 -0.53 -0.50 25.00 0.00 0.00 N/A LNG Liquefied Natural 423.21 0.84 1.21 12.00 - -0.04 #DIV/0! -168.46 100.00 0.00 0.00 N/A CTX Caltex Australia 7725.21 29.77 0.51 34.40 BUY 0.15 0.14 -15.39 10.65 3.45 3.81 N/A STO Santos Ltd 8269.15 3.99 0.50 4.55 HOLD 1.32 0.21 -59.41 524.73 0.05 1.09 FY Result - losses ease on cost cutting & higher production KAR Karoon Gas Australia 404.66 1.65 0.30 2.40 BUY -0.22 -0.21 54.33 -2.63 0.00 0.00 N/A WPL Woodside Petroleum 26739.20 31.75 0.03 33.20 BUY 0.23 0.19 -16.16 22.25 3.48 4.24 N/A AWE AWE Limited 282.56 0.53 -0.93 0.63 HOLD -0.04 -0.20 -344.11 82.31 0.00 0.00 N/A WHC Whitehaven Coal 3016.57 2.87 -2.38 3.10 BUY 2.15 0.07 147.51 3124.76 0.00 0.99 Whitehaven Coal Profit Surges on Higher Prices, Sales WOR WorleyParsons Ltd 2497.14 9.86 -2.57 9.00 HOLD 0.16 0.18 -21.87 -12.09 0.00 0.11 N/A ORG Origin Energy 12442.51 6.87 -3.10 7.03 HOLD 0.29 0.23 -54.64 24.29 1.91 0.21 N/A PDN Paladin Energy Ltd 231.23 0.13 -3.70 0.12 SELL -0.05 -0.07 58.54 39.07 0.00 0.00 N/A BPT Beach Energy Limited 1361.52 0.70 -4.79 0.70 SELL 0.33 0.10 -70.55 222.87 0.79 1.63 N/A

 Material (Ex Mining) stocks:

Daily Price Consensus Consensus 2016 EPS 2017 EPS 2016 Div 2017 Div Code Company Name Market Cap ($m) Price ($) 2016 PE 2017 PE Newsflash Change (%) Target Price ($) Rating GROWTH GROWTH Yield Yield AJX Alexium International 213.67 0.72 1.42 1.00 STRONG BUY -0.16 0.33 N/A 150.00 0.00 0.00 N/A DLX Duluxgroup Limited 2409.46 6.18 -0.16 6.10 HOLD 0.19 0.18 8.76 4.41 3.86 4.01 N/A FBU Fletcher Building 6585.92 9.47 -0.21 9.83 HOLD 0.17 0.15 9.56 13.72 3.86 4.22 N/A BKW Brickworks Limited 1902.59 12.69 -0.55 14.33 HOLD 0.13 0.12 19.22 13.27 3.70 4.04 N/A ABC Adelaide Brighton 3436.67 5.25 -0.76 5.21 HOLD 0.17 0.17 -2.18 3.51 5.19 5.23 N/A AMC Amcor Limited 17256.31 14.76 -0.94 16.10 BUY 0.21 0.19 -7.30 8.21 3.63 3.90 N/A TFC TFS Corporation Ltd 601.05 1.53 -0.97 3.20 STRONG BUY 0.28 0.23 -12.97 22.97 2.05 1.97 N/A ORI Orica Limited 7034.49 18.47 -1.23 16.13 HOLD 0.18 0.18 -10.97 -0.63 2.93 2.90 N/A PGH Pact Group Hldgs Ltd 2058.73 6.79 -1.31 6.65 BUY 0.21 0.19 7.85 14.52 3.07 3.54 N/A CSR CSR Limited 2189.45 4.27 -1.61 4.11 HOLD 0.13 0.11 23.54 15.83 5.40 5.82 N/A HFR Highfield Res Ltd 365.50 1.11 -2.20 2.00 BUY -1.51 -1.31 78.28 -15.96 0.00 0.00 N/A ORA Orora Limited 3764.86 3.05 -2.24 3.25 BUY 0.23 0.21 18.84 13.86 2.97 3.35 N/A IPL Incitec Pivot 6529.35 3.78 -2.33 3.50 BUY 0.22 0.20 -28.21 10.18 2.38 2.84 N/A NUF Nufarm Limited 2484.03 9.09 -2.36 9.30 HOLD 0.24 0.18 -1.66 35.34 1.17 1.50 N/A JHX James Hardie Indust 8437.71 18.68 -2.40 20.30 HOLD 0.25 0.25 26.08 -1.96 3.06 2.70 N/A BLD Boral Limited 7315.35 6.09 -2.40 6.73 BUY 0.19 0.19 10.27 2.79 3.37 3.69 N/A

 Gold stocks:

Daily Price Consensus Consensus 2016 EPS 2017 EPS 2016 Div 2017 Div Code Company Name Market Cap ($m) Price ($) 2016 PE 2017 PE Newsflash Change (%) Target Price ($) Rating GROWTH GROWTH Yield Yield PRU Perseus Mining Ltd 340.60 0.35 4.55 0.40 HOLD -0.29 -0.06 -110.72 -375.27 0.00 0.00 N/A RSG Resolute Mining 1274.98 1.79 3.18 1.91 BUY 0.08 0.09 130.97 -8.68 0.24 0.94 N/A DRM Doray Minerals Ltd 146.34 0.42 2.44 0.65 BUY 0.08 0.14 -45.65 -39.80 0.00 0.00 N/A AQG Alacer Gold Corp. 252.93 3.00 2.39 3.65 HOLD 0.34 0.38 -57.92 -10.35 0.00 0.00 Copler Sulfide Project Photo Update MLX Metals X Limited 524.03 0.88 2.33 0.85 BUY 0.27 0.15 -64.91 82.44 3.41 0.76 N/A DCN Dacian Gold Ltd 329.15 2.30 2.22 3.13 BUY -0.37 -0.49 -32.00 23.33 0.00 0.00 N/A SBM St Barbara Limited 1362.69 2.80 2.19 2.75 BUY 0.10 0.10 243.75 1.09 0.00 0.00 N/A GOR Gold Road Res Ltd 487.85 0.57 1.79 0.80 BUY -0.63 -0.51 28.76 -24.58 0.00 0.00 N/A EVN Evolution Mining Ltd 3947.37 2.39 1.70 2.55 BUY 0.16 0.13 33.48 22.11 1.00 1.61 N/A WGX Westgold Resources Ltd 761.68 2.53 1.20 - - N/A N/A N/A N/A N/A N/A N/A SAR Saracen Mineral 1017.51 1.28 1.19 1.20 BUY 0.32 0.14 -5.18 135.89 0.00 0.78 N/A NCM Newcrest Mining 17427.90 22.99 1.14 23.32 HOLD 0.41 0.24 -9.76 69.75 0.33 0.98 N/A NST Northern Star 2660.40 4.48 1.13 4.10 BUY 0.16 0.14 20.43 18.78 1.51 2.24 Half Year Results Presentation Webcast RRL Regis Resources 1778.52 3.55 0.00 3.31 HOLD 0.16 0.14 32.22 14.25 2.89 3.59 N/A BDR Beadell Resource Ltd 365.38 0.35 0.00 0.42 BUY 0.09 0.07 407.35 34.72 0.41 0.25 Beadell Resources in Trading Halt, Pending Capital Raising OGC OceanaGold Corp. 2561.41 4.09 -2.39 5.27 BUY 0.15 0.11 19.53 46.10 1.27 1.17 N/A

 Mining (Ex Gold) stocks:

Daily Price Consensus Consensus 2016 EPS 2017 EPS 2016 Div 2017 Div Code Company Name Market Cap ($m) Price ($) 2016 PE 2017 PE Newsflash Change (%) Target Price ($) Rating GROWTH GROWTH Yield Yield LYC Lynas Corporation 422.51 0.14 12.50 - - N/A N/A N/A N/A N/A N/A N/A GXY Galaxy Resources 1034.54 0.54 2.86 0.71 BUY -1.08 0.14 -233.33 870.00 0.00 0.00 N/A S32 South32 Limited 13948.26 2.69 2.67 3.10 BUY 1.14 0.09 -87.01 1157.42 0.19 5.08 N/A PLS Pilbara Minerals Limited 594.58 0.48 2.13 0.90 BUY -0.38 -0.53 N/A 28.00 0.00 0.00 N/A SFR Sandfire Resources 1080.49 6.87 0.29 6.75 BUY 0.19 0.14 -36.89 40.67 1.48 2.31 N/A ILU Iluka Resources 2993.71 7.12 -0.42 7.00 HOLD -0.80 0.46 -139.93 275.20 1.49 2.20 N/A BHP BHP Billiton Limited 86522.96 26.64 -1.11 28.76 HOLD 1.03 0.15 -86.56 595.93 1.52 3.77 N/A BSL BlueScope Steel Ltd 7087.58 12.19 -1.30 12.70 BUY 0.23 0.11 146.48 103.62 0.68 1.10 N/A OZL OZ Minerals 2983.66 9.82 -1.70 8.50 HOLD 0.26 0.22 -13.19 19.80 1.57 1.55 N/A AWC Alumina Limited 5759.69 1.96 -2.00 1.99 HOLD 0.42 0.15 -48.73 171.32 3.96 6.79 N/A SGM Sims Metal Mgmt Ltd 2497.51 12.38 -2.13 12.33 HOLD 0.67 0.20 -61.70 230.21 1.60 2.91 N/A RIO Rio Tinto Limited 29383.81 67.79 -2.14 71.25 HOLD 0.20 0.13 0.47 47.76 2.74 4.27 N/A FMG Fortescue Metals Grp 21952.28 6.88 -2.41 6.50 HOLD 0.19 0.07 112.68 167.61 1.26 5.36 N/A SYR Syrah Resources 867.76 3.20 -2.74 5.00 BUY -0.56 -0.87 N/A 35.70 0.00 0.00 N/A MNS Magnis Resource Ltd 324.77 0.69 -2.82 1.40 BUY -0.36 -0.41 -22.11 10.53 0.00 0.00 N/A

ORE Orocobre Limited 795.01 3.66 -3.17 4.98 BUY -0.17 0.29 -394.37 159.42 0.00 0.00 Appendix 3B 12 IGO Independence Group 2593.21 4.26 -3.62 3.95 HOLD 0.75 0.48 -83.85 55.45 0.27 0.73 N/A WSA Western Areas Ltd 746.04 2.62 -4.38 2.70 HOLD -0.33 0.64 -135.42 151.98 0.03 0.29 N/A

MIN Mineral Resources. 2532.48 12.87 -4.95 11.70 HOLD 0.21 0.13 15.08 62.13 1.66 3.68 Resource & Exploration Update Page

Mathan Somasundaram > [email protected] Sales Commentary Alex Balzuhn > [email protected] Australian Market Trading Day Wrap 17 February 2017

 Industrial stocks:

Daily Price Consensus Consensus 2016 EPS 2017 EPS 2016 Div 2017 Div Code Company Name Market Cap ($m) Price ($) 2016 PE 2017 PE Newsflash Change (%) Target Price ($) Rating GROWTH GROWTH Yield Yield SEK Seek Limited 5192.74 15.78 5.69 15.23 HOLD 0.30 0.27 -7.96 11.36 2.25 2.57 SEK Provides Update on Potential Zhaopin Ltd Transaction SGF SG Fleet Group Ltd 847.65 3.41 1.79 4.41 BUY 0.16 0.13 29.14 19.50 4.01 4.71 N/A SPO Spotless Grp Hld Ltd 1026.90 0.95 1.60 1.07 HOLD 0.08 0.10 -1.82 -21.66 8.84 7.28 N/A MLD MACA Limited 378.46 1.64 1.55 1.82 STRONG BUY 0.16 0.13 -60.83 25.96 4.88 5.49 N/A ASB Austal Limited 610.92 1.77 1.14 1.66 BUY 0.24 0.21 -44.09 16.90 2.26 2.23 N/A CAB Cabcharge Australia 444.39 3.73 1.08 3.53 BUY 0.09 0.12 -18.88 -23.02 5.19 5.00 N/A TCL Transurban Group 22328.82 10.98 0.92 11.98 BUY 0.89 0.69 57.09 27.67 4.14 4.69 N/A CDD Cardno Limited 558.72 1.18 0.86 0.65 HOLD 0.54 0.48 123.54 13.06 0.00 0.00 N/A AZJ Aurizon Holdings Ltd 10751.15 5.28 0.76 4.87 HOLD 0.21 0.19 -12.30 9.15 4.62 4.93 N/A AIA Auckland Internation 7526.44 6.35 0.47 - - 0.38 0.33 23.37 14.33 2.61 2.94 AIA Appendix 1 - FY17 Interim Results MMS McMillan Shakespeare 893.62 10.79 0.47 12.00 HOLD 0.10 0.10 15.90 -1.43 5.75 5.73 N/A RWC Reliance Worldwide Corp 1433.25 2.74 0.37 3.10 HOLD 0.27 0.23 N/A 18.75 0.00 2.37 N/A QAN Qantas Airways 6357.08 3.48 0.29 4.23 BUY 0.07 0.07 69.11 0.06 0.72 5.21 N/A DOW Downer EDI Limited 2931.02 6.88 -0.29 6.59 HOLD 0.18 0.17 -15.81 1.17 3.42 3.51 N/A TOX Tox Free Solutions 475.17 2.44 -0.41 2.69 HOLD 0.14 0.14 -2.31 -4.68 3.72 3.64 N/A QUB Qube Holdings Ltd 3470.07 2.38 -0.42 2.63 HOLD 0.29 0.26 -17.83 10.04 2.18 2.47 N/A BXB Brambles Limited 16838.49 10.51 -0.85 12.07 HOLD 0.20 0.20 -0.37 1.60 3.21 3.09 Appendix 3B CWY Cleanaway Waste Man 1845.48 1.15 -0.86 1.15 HOLD 0.31 0.26 33.19 18.24 1.63 1.78 N/A MQA Macq Atlas Roads Grp 2719.57 5.08 -0.97 5.75 BUY 0.34 0.21 -6.29 60.05 3.54 4.00 N/A SYD SYD Airport 13678.94 6.02 -0.99 7.06 BUY 0.40 0.37 35.79 8.15 5.16 5.62 N/A PRG Programmed 465.74 1.79 -1.10 2.00 BUY 0.08 0.11 -11.33 -24.57 7.23 4.90 N/A SIV Silver Chef Limited 292.99 8.04 -1.11 10.66 BUY 0.11 0.11 46.00 -3.96 4.83 5.28 N/A SSM Service Stream 440.05 1.19 -1.24 1.25 STRONG BUY 0.21 0.15 N/A 39.78 2.07 3.36 N/A RCR RCR Tomlinson 425.49 3.00 -1.32 3.25 STRONG BUY 0.43 0.11 -75.06 280.79 1.62 3.00 N/A MND Monadelphous Group 1096.10 11.50 -1.54 7.85 SELL 0.15 0.20 -35.32 -21.08 5.10 4.12 N/A CIM CIMIC Group 12665.37 38.43 -1.61 32.50 HOLD 0.25 0.20 5.52 22.16 2.62 3.08 KEY ISSUES FOR MAH'S TARGET STATEMENT TO ADDRESS GWA GWA Group Ltd 757.53 2.82 -1.74 2.72 HOLD 0.17 0.14 17.30 14.80 4.86 5.41 N/A SIQ Smartgrp Corporation 765.37 6.19 -1.75 6.43 HOLD 0.17 0.14 57.88 19.64 3.72 4.63 N/A SVW Seven Group Holdings 2716.79 9.44 -2.28 6.91 HOLD 0.21 0.17 -28.90 24.61 4.22 4.27 N/A ALQ Als Ltd 3136.26 6.04 -2.89 6.20 HOLD 0.24 0.29 -20.87 -15.55 2.27 1.93 N/A IPH IPH Limited 986.59 5.00 -2.91 6.10 BUY 0.18 0.18 56.38 1.72 4.62 4.70 N/A

 Consumer stocks:

Daily Price Consensus Consensus 2016 EPS 2017 EPS 2016 Div 2017 Div Code Company Name Market Cap ($m) Price ($) 2016 PE 2017 PE Newsflash Change (%) Target Price ($) Rating GROWTH GROWTH Yield Yield SKC Skycity Ent Grp Ltd 2415.18 3.77 1.89 27.13 HOLD 0.15 0.17 27.07 -7.11 5.16 5.00 DISCLOSURE OF DIRECTORS RELEVANT INTERESTS CKF Collins Foods Ltd 564.69 5.97 1.36 6.35 BUY 0.18 0.16 32.31 14.29 2.22 2.91 N/A REA REA Group 7162.65 55.11 1.34 60.00 BUY 0.33 0.31 17.42 7.56 1.58 1.68 N/A TTS Tatts Group Ltd 5903.45 4.06 1.00 4.23 HOLD 0.22 0.24 0.64 -7.30 4.23 4.09 N/A WPP WPP Aunz Ltd 881.98 1.05 0.97 1.41 BUY 0.11 0.09 1.04 13.33 5.69 6.89 Notice of Full Year Results Presentation GUD G.U.D. Holdings 894.26 10.53 0.96 10.40 HOLD 0.19 0.17 12.63 11.29 4.29 4.38 N/A APO Apn Outdoor Grp 969.70 5.87 0.86 6.05 BUY 0.19 0.17 31.09 13.22 2.99 3.39 N/A ARB ARB Corporation 1244.78 15.80 0.51 17.65 HOLD 0.26 0.24 6.21 9.97 2.02 2.19 N/A SUL Super Ret Rep Ltd 1893.50 9.63 0.31 11.10 BUY 0.18 0.15 1.72 20.68 4.24 4.87 N/A IEL Idp Education Limited 1108.81 4.44 0.23 4.70 BUY 0.30 0.25 N/A 19.05 1.95 2.91 N/A TME Trade Me Group 1902.40 4.80 0.21 4.38 HOLD 0.25 0.22 8.28 11.23 3.30 3.60 N/A ALL Aristocrat Leisure 10012.37 15.70 0.13 18.03 BUY 0.26 0.21 61.37 24.28 1.58 2.16 N/A SGR Star Entertainment Group 4161.39 5.04 0.00 6.06 BUY 0.17 0.18 15.01 -2.79 2.56 2.96 N/A KMD Kathmandu Hold Ltd 379.80 1.89 0.00 2.02 BUY 0.12 0.11 57.45 9.21 4.68 5.94 N/A NVT Navitas Limited 1739.44 4.83 0.00 4.85 HOLD 0.20 0.20 -2.65 -2.67 4.06 4.04 N/A OML Ooh!Media Limited 738.62 4.50 0.00 5.35 BUY 0.19 0.16 37.24 20.12 2.84 3.24 N/A CCV Cash Converters 172.57 0.35 0.00 0.40 HOLD 0.09 0.09 36.67 -2.44 11.43 5.71 N/A GEM G8 Education Limited 1372.34 3.56 0.00 3.78 BUY 0.14 0.13 0.94 10.52 6.78 6.81 N/A APN APN News & Media 796.41 2.59 0.00 3.38 BUY 0.14 0.12 -53.60 12.13 1.89 3.99 N/A TEN Ten Network Holdings 316.89 0.88 0.00 1.00 HOLD -0.26 -0.75 70.76 64.99 0.00 0.00 N/A NWS News Corp.. 769.11 17.29 -0.12 21.35 HOLD 0.30 0.29 -8.98 5.39 1.42 1.69 Appendix 3B BAP Bapcor Limited 1597.45 5.74 -0.17 6.57 BUY 0.32 0.25 33.94 32.09 1.91 2.39 N/A TGA Thorn Group Limited 248.45 1.57 -0.32 1.75 HOLD 0.07 0.08 3.14 -7.58 7.80 7.67 N/A SXL Sthn Cross Media 1095.84 1.42 -0.35 1.35 HOLD 0.14 0.12 10.27 17.11 4.70 5.67 N/A IVC InvoCare Limited 1449.10 13.11 -0.46 12.85 HOLD 0.27 0.25 11.07 8.81 3.05 3.35 N/A FXJ Fairfax Media Ltd 2035.04 0.88 -0.56 0.93 HOLD 0.14 0.15 -0.68 -2.10 4.61 4.46 N/A PMV Premier Investments 2189.88 13.83 -0.58 15.50 BUY 0.20 0.19 17.88 6.92 3.39 3.79 N/A GXL Greencross Limited 767.77 6.57 -0.61 7.78 HOLD 0.18 0.16 8.62 8.72 2.90 3.13 N/A RFG Retail Food Group 1089.77 6.15 -0.65 7.08 BUY 0.15 0.13 10.07 16.56 4.33 4.98 N/A TAH TABCORP Holdings Ltd 3633.41 4.32 -0.69 4.95 HOLD 0.20 0.19 0.75 5.94 5.49 5.66 N/A AHG Automotive Holdings 1326.49 3.97 -0.75 4.54 BUY 0.13 0.13 6.22 -3.43 5.76 5.74 N/A CWN Crown Resorts Ltd 8463.94 11.52 -0.86 12.83 BUY 0.21 0.22 -23.96 -4.24 5.01 10.76 N/A FLT Flight Centre Travel 3063.19 30.06 -0.89 33.15 HOLD 0.12 0.13 -1.61 -8.51 4.92 4.67 N/A AAD Ardent Leisure Group 1036.70 2.19 -0.90 2.46 HOLD 0.18 0.26 -11.31 -32.13 5.75 3.74 N/A AMA AMA Group Limited 516.32 1.08 -0.92 1.25 STRONG BUY 0.29 0.22 23.33 31.76 2.36 2.73 N/A NEC Nine Entertainment 858.30 0.98 -1.02 1.09 HOLD 0.07 0.09 -14.42 -12.73 11.78 10.55 N/A MYR Myer Holdings Ltd 1067.66 1.29 -1.15 1.30 HOLD 0.14 0.14 -22.86 0.81 4.05 4.41 Change in substantial holding HVN Harvey Norman 5740.78 5.10 -1.16 4.86 HOLD 0.17 0.15 19.18 14.00 4.81 5.85 N/A JBH JB Hi-Fi Limited 3219.39 27.79 -1.28 31.20 HOLD 0.19 0.15 12.27 26.05 3.42 4.21 Becoming a substantial holder SWM Seven West Media Ltd 1115.95 0.73 -1.35 0.70 SELL 0.05 0.07 -12.83 -25.36 10.35 7.72 N/A AGI Ainsworth Game Tech. 590.99 1.76 -1.40 1.87 HOLD 0.11 0.13 -6.38 -16.20 5.86 5.05 N/A DNA Donaco International 295.08 0.35 -1.41 0.92 STRONG BUY 0.05 0.04 333.80 6.49 3.24 7.52 N/A TRS The Reject Shop 242.42 8.28 -1.43 11.30 HOLD 0.11 0.12 67.27 -9.83 5.39 5.64 N/A RCG RCG Corporation Ltd 752.39 1.37 -1.44 1.79 BUY 0.20 0.16 74.68 29.00 3.92 4.95 N/A WEB Webjet Limited 1143.51 11.50 -1.54 10.81 BUY 0.45 0.29 12.38 53.91 1.20 1.79 N/A SKT Sky Network 1618.82 4.09 -1.68 - - 0.11 0.15 -16.73 -25.04 7.00 6.84 N/A CTD Corp Travel Limited 1851.81 17.21 -2.22 19.90 BUY 0.38 0.29 45.99 29.19 1.40 1.82 N/A BRG Breville Group Ltd 1159.15 8.71 -2.24 9.00 BUY 0.23 0.21 0.81 8.36 3.26 3.49 N/A DMP Domino Pizza Enterpr 5125.58 56.10 -2.77 67.00 BUY 0.55 0.41 41.41 36.03 1.19 1.67 N/A ISU Iselect Ltd 431.13 1.82 -3.19 2.23 BUY 0.40 0.22 -36.36 84.62 0.97 1.37 Announcement of buy-back - Appendix 3C

ADH Adairs Limited 213.98 1.23 -4.65 2.20 BUY 0.08 0.09 24.55 -18.88 8.67 8.27 N/A SLK Sealink Travel Grp 465.31 4.38 -4.78 4.98 BUY 0.20 0.18 72.43 12.47 2.58 3.04 N/A VTG Vita Group Ltd 504.54 3.15 -5.12 4.72 BUY 0.15 0.12 74.27 19.31 4.40 5.21 N/A VRL Village Roadshow Ltd 609.95 3.56 -5.57 4.60 BUY 0.11 0.13 10.49 -15.92 7.82 6.81 Village Roadshow 1H Revenue A$542.5 Mln, Up 4% on Year MTR Mantra Group Ltd 897.56 2.85 -5.63 3.95 BUY 0.17 0.16 13.12 9.49 3.65 4.32 Mantra 1H Net Profit Boosted by New Hotels, Resorts 13 BBN Baby Bunting Grp Ltd 311.79 2.31 -6.85 3.12 BUY 0.28 0.21 N/A 32.93 2.42 3.56 Baby Bunting 1H Net Profit More Than Doubles to A$5.2 Mln

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Mathan Somasundaram > [email protected] Sales Commentary Alex Balzuhn > [email protected] Australian Market Trading Day Wrap 17 February 2017

 Staple stocks:

Daily Price Consensus Consensus 2016 EPS 2017 EPS 2016 Div 2017 Div Code Company Name Market Cap ($m) Price ($) 2016 PE 2017 PE Newsflash Change (%) Target Price ($) Rating GROWTH GROWTH Yield Yield AAC Australian Agricult. 815.72 1.50 2.40 2.33 STRONG BUY 0.17 0.13 N/A 31.43 0.00 0.00 N/A A2M The A2 Milk Company 1653.66 2.35 1.73 2.47 BUY 0.57 0.29 N/A 94.33 0.07 0.76 Appendix 3B FSF Fonterra Share Fund 717.08 5.90 1.55 7.21 BUY 0.12 0.12 85.48 0.93 6.53 6.46 N/A WES Wesfarmers Limited 48460.76 43.09 0.56 42.21 HOLD 0.21 0.17 -4.52 26.24 4.42 5.08 N/A WOW Woolworths Limited 32667.82 25.49 0.51 23.47 HOLD 0.21 0.22 -36.84 -2.56 3.27 3.20 N/A RIC Ridley Corporation 387.85 1.26 0.00 1.55 BUY 0.16 0.16 14.63 1.92 2.94 3.25 N/A WBA Webster Ltd 486.79 1.40 0.00 1.44 BUY 0.56 0.24 -56.14 132.00 0.39 0.71 N/A BGA Bega Cheese Ltd 831.69 5.45 0.00 7.00 BUY 0.29 0.30 29.15 -1.87 1.72 1.79 N/A CCL Coca-Cola Amatil 7666.45 10.00 -0.40 9.44 HOLD 0.18 0.18 7.52 2.76 4.51 4.66 N/A GNC GrainCorp Limited 2148.95 9.35 -0.43 9.79 HOLD 0.45 0.15 0.63 195.31 1.19 3.02 N/A MTS Metcash Limited 2136.66 2.18 -0.46 2.30 HOLD 0.12 0.11 -10.88 2.66 0.44 0.61 N/A ELD Elders Limited 493.01 4.31 -0.46 4.63 BUY 0.11 0.11 14.12 -5.63 0.00 2.04 N/A TWE Treasury Wine Estate 8828.09 11.90 -0.50 12.00 HOLD 0.38 0.30 55.19 28.69 1.63 2.22 N/A MGC Mg Unit Trust 201.12 0.99 -0.51 1.21 HOLD 0.14 0.16 N/A -16.49 7.39 6.52 N/A CGC Costa Group Holdings 1132.74 3.53 -0.56 3.48 BUY 0.24 0.21 N/A 17.01 2.55 3.12 N/A BKL Blackmores Limited 2045.39 117.88 -0.72 115.00 HOLD 0.20 0.27 141.01 -25.81 3.73 2.78 N/A BAL Bellamy'S Australia 464.10 4.75 -1.04 4.25 SELL 0.13 0.30 321.22 -57.42 2.23 1.30 N/A FNP Freedom Food Ltd 831.33 4.11 -1.20 5.16 HOLD 0.74 0.52 -31.29 42.86 0.85 1.21 N/A AHY Asaleo Care Limited 778.83 1.40 -1.41 1.55 BUY 0.12 0.12 -10.86 2.64 6.74 6.99 N/A BWX BWX Limited 440.25 4.70 -1.47 5.59 BUY 0.31 0.25 N/A 23.64 1.00 1.51 N/A TGR Tassal Group Limited 673.26 4.41 -1.56 4.50 BUY 0.16 0.16 -3.04 -0.65 3.47 3.62 Okehampton lease SHV Select Harvests 412.99 5.52 -1.78 6.90 HOLD 0.13 0.14 -48.68 -9.49 6.41 4.59 N/A

 Healthcare stocks:

Daily Price Consensus Consensus 2016 EPS 2017 EPS 2016 Div 2017 Div Code Company Name Market Cap ($m) Price ($) 2016 PE 2017 PE Newsflash Change (%) Target Price ($) Rating GROWTH GROWTH Yield Yield MVF Monash Ivf Group Ltd 410.77 1.79 2.29 2.00 BUY 0.15 0.14 18.22 9.93 4.48 5.05 N/A IPD Impedimed Limited 324.38 0.88 1.16 2.20 STRONG BUY -0.13 -0.12 -70.95 -13.50 0.00 0.00 N/A EHE Estia Health Ltd 729.69 2.82 0.71 2.59 HOLD 0.10 0.14 26.97 -29.91 10.04 4.60 N/A VRT Virtus Health Ltd 432.43 5.39 0.19 6.48 BUY 0.13 0.13 3.93 -3.25 5.27 5.24 N/A RMD ResMed Inc. 13226.48 9.31 -0.32 9.45 BUY 0.27 0.26 2.06 0.72 1.71 4.56 N/A NAN Nanosonics Limited 836.63 2.80 -0.36 3.30 BUY -37.33 0.56 96.54 6740.00 0.00 0.00 N/A RHC Ramsay Health Care 14531.66 71.64 -0.38 78.35 BUY 0.31 0.28 15.28 12.03 1.67 1.88 N/A SRX Sirtex Medical 875.26 15.11 -0.40 21.76 BUY 0.16 0.18 48.12 -10.33 1.75 1.70 Granted Reimbursement for Refractory mCRC in France FPH Fisher & Paykel H. 4761.04 8.35 -0.48 7.82 SELL 0.37 0.30 23.52 24.08 1.87 2.28 N/A JHC Japara Healthcare Lt 538.23 2.01 -0.99 2.46 HOLD 0.17 0.16 9.35 2.26 5.77 5.95 N/A PRY Primary Health Care 1752.01 3.32 -1.19 3.50 HOLD 0.16 0.17 -16.04 -5.99 3.81 3.52 N/A SHL Sonic Healthcare 9013.44 21.37 -1.29 22.90 HOLD 0.21 0.20 10.74 3.44 3.48 3.58 N/A SPL Starpharma Holdings 283.81 0.76 -1.30 1.00 BUY -0.14 -0.42 -46.05 67.57 0.00 0.00 N/A REG Regis Healthcare Ltd 1354.62 4.45 -1.33 4.83 HOLD 0.26 0.22 1.42 16.84 3.97 4.45 N/A HSO Healthscope Limited 4112.17 2.33 -1.69 2.52 HOLD 0.21 0.21 14.41 0.83 3.19 3.28 N/A CSL CSL Limited 55743.62 120.27 -1.74 120.00 BUY 0.34 0.31 -14.65 10.75 1.36 1.51 N/A COH Cochlear Limited 7752.60 132.08 -2.16 127.35 HOLD 0.40 0.34 21.29 16.82 1.75 2.06 N/A MSB Mesoblast Limited 662.80 1.61 -2.42 2.24 BUY -0.10 -0.07 44.97 -38.60 0.00 0.00 N/A API Australian Pharm. 945.31 1.87 -3.11 1.94 HOLD 0.18 0.16 21.19 14.54 2.94 3.61 N/A ANN Ansell Limited 3202.56 21.00 -3.31 22.70 SELL 0.16 0.16 -20.99 2.06 2.74 2.88 QUOTED: Ex Dividend MYX Mayne Pharma Ltd 2125.77 1.37 -3.53 1.67 BUY 0.27 0.17 163.18 57.59 0.00 0.00 N/A SIP Sigma Pharmaceutical 1340.96 1.20 -4.02 1.28 HOLD 0.22 0.19 13.87 13.95 3.60 4.23 Trading Update

 Bank stocks:

Daily Price Consensus Consensus 2016 EPS 2017 EPS 2016 Div 2017 Div Code Company Name Market Cap ($m) Price ($) 2016 PE 2017 PE Newsflash Change (%) Target Price ($) Rating GROWTH GROWTH Yield Yield ANZ ANZ Banking Grp Ltd 88697.68 30.77 1.85 30.00 HOLD 0.15 0.13 -22.15 13.41 5.20 5.23 ANZ 1Q Profit Steady, Signals Strong Capital Position BEN Bendigo and Adelaide 5828.01 12.43 0.81 11.51 SELL 0.14 0.14 -2.78 -0.13 5.46 5.51 N/A WBC Westpac Banking Corp 112950.09 33.88 0.68 33.40 HOLD 0.15 0.14 -5.33 3.48 5.49 5.49 N/A CBA Commonwealth Bank. 146608.03 85.39 0.36 83.25 HOLD 0.15 0.15 0.56 1.33 4.92 4.96 N/A BOQ Bank of Queensland. 4438.74 11.49 0.26 11.74 HOLD 0.12 0.12 -0.74 0.03 6.63 6.66 N/A GMA Genworth Mortgage 1487.35 2.92 0.00 3.93 BUY 0.07 0.09 -13.78 -19.38 14.77 8.98 N/A MOC Mortgage Choice Ltd 306.15 2.45 0.00 2.59 HOLD 0.15 0.14 0.00 4.94 6.78 7.01 N/A NAB National Aust. Bank 84994.28 31.71 -0.38 31.32 HOLD 0.13 0.13 -5.34 0.83 6.11 6.11 N/A CYB Cybg PLC 3269.91 4.49 -2.18 4.95 HOLD 0.19 0.15 N/A 27.33 0.00 1.09 N/A

 Diversified Financials / Insurance stocks:

Daily Price Consensus Consensus 2016 EPS 2017 EPS 2016 Div 2017 Div Code Company Name Market Cap ($m) Price ($) 2016 PE 2017 PE Newsflash Change (%) Target Price ($) Rating GROWTH GROWTH Yield Yield IMF IMF Bentham Ltd 316.70 1.96 5.68 2.05 BUY 0.12 0.15 339.22 -14.47 3.41 4.09 N/A HFA HFA Holdings Limited 343.75 2.15 1.42 2.95 BUY 0.11 0.11 0.15 -1.48 7.09 8.56 N/A IFL IOOF Holdings Ltd 2518.12 8.47 0.95 8.60 HOLD 0.15 0.15 0.54 -5.64 6.34 6.08 N/A PTM Platinum Asset 2933.39 5.01 0.20 4.95 HOLD 0.14 0.17 5.22 -17.45 6.71 5.78 N/A EQT Equity Trustees 360.80 17.98 -0.06 19.00 BUY 0.18 0.18 -9.07 -1.32 3.70 4.17 N/A BLA Blue Sky Limited 504.95 7.48 -0.13 8.98 STRONG BUY 0.30 0.20 27.55 47.24 2.17 3.05 N/A ECX Eclipx Group Limited 1026.71 3.86 -0.26 4.25 BUY 0.17 0.15 12.57 15.18 3.66 4.11 CEO/MD's AGM Address to Shareholders CVO Cover-More Grp Ltd 727.91 1.92 -0.26 1.75 BUY 0.26 0.23 -21.42 13.22 2.90 2.98 N/A NHF NIB Holdings Limited 2076.49 4.71 -0.42 4.93 HOLD 0.22 0.19 32.00 11.02 2.95 3.41 N/A FXL FlexiGroup Limited 867.58 2.32 -0.43 2.70 BUY 0.08 0.09 -2.34 -9.25 6.43 6.33 N/A ASX ASX Limited 10066.95 51.74 -0.50 47.85 SELL 0.24 0.23 4.84 3.59 3.80 3.94 ASX First-Half Profit Rises as Markets React to US Election PPT Perpetual Limited 2240.23 47.80 -0.62 48.27 HOLD 0.18 0.17 -2.63 2.07 5.19 5.30 N/A BTT BT Investment Mngmnt 3092.16 9.80 -0.71 10.05 HOLD 0.20 0.19 11.73 4.74 4.08 4.44 N/A HGG Henderson Group 2587.61 3.55 -0.84 3.90 HOLD 0.15 0.14 -31.94 4.84 4.80 4.83 N/A AMP AMP Limited 15498.55 5.19 -0.95 5.35 HOLD 0.24 0.15 -42.29 62.21 5.37 5.60 N/A IAG Insurance Australia 14181.47 5.93 -1.00 5.91 HOLD 0.16 0.16 -10.52 -3.63 6.92 4.80 N/A CGF Challenger Limited 6802.90 11.78 -1.01 11.28 HOLD 0.19 0.18 10.37 8.83 2.72 2.93 N/A SUN Suncorp Group Ltd 17701.51 13.57 -1.09 14.05 BUY 0.16 0.14 -3.52 8.98 5.18 5.46 N/A CCP Credit Corp Group 790.33 16.48 -1.26 19.47 BUY 0.17 0.14 15.05 22.19 2.93 3.56 N/A MQG Macquarie Group Ltd 30015.62 87.06 -1.28 89.00 BUY 0.15 0.14 29.60 3.91 4.42 4.90 Becoming a substantial holder MFG Magellan Fin Grp Ltd 4135.00 23.70 -1.37 26.80 BUY 0.21 0.21 27.83 -1.54 3.86 3.57 N/A EML Emerchants Ltd 381.46 1.53 -1.61 2.35 STRONG BUY 0.81 0.32 -15.56 150.00 0.00 0.00 N/A

SDF Steadfast Group Ltd 1724.43 2.26 -1.74 2.40 BUY 0.21 0.20 19.43 5.12 2.60 2.88 N/A OFX Ozforex Group Ltd 333.60 1.36 -2.16 1.57 HOLD 0.13 0.16 1.15 -18.64 5.62 4.54 N/A QBE QBE Insurance Group 17858.11 12.68 -2.61 13.40 BUY 0.17 0.14 -14.88 20.17 4.10 4.57 Becoming a substantial holder MPL Medibank Private Ltd 7738.75 2.70 -3.91 2.79 HOLD 0.18 0.18 51.70 1.21 4.02 4.29 Medibank 1H Net Profit A$231.9 Mln, Up 1.9% on-Year 14

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Mathan Somasundaram > [email protected] Sales Commentary Alex Balzuhn > [email protected] Australian Market Trading Day Wrap 17 February 2017

 Property stocks:

Daily Price Consensus Consensus 2016 EPS 2017 EPS 2016 Div 2017 Div Code Company Name Market Cap ($m) Price ($) 2016 PE 2017 PE Newsflash Change (%) Target Price ($) Rating GROWTH GROWTH Yield Yield GHC Gen Healthcare REIT 412.35 1.92 2.13 1.96 HOLD 0.19 0.19 9.82 1.51 4.61 4.69 N/A GDI GDI Property Grp 530.74 1.01 2.03 1.09 STRONG BUY 0.11 0.11 7.32 3.41 7.66 7.76 N/A RFF Rural Funds Group 359.38 1.77 2.02 1.75 STRONG BUY 0.08 0.12 150.41 -36.68 4.87 5.27 Appointment to RFM Audit Committee ABP Abacus Property Grp. 1705.53 3.03 1.68 3.12 HOLD 0.14 0.13 -6.37 6.40 5.61 5.82 ABP HY17 results announcement SCG Scentre Grp 23533.39 4.49 1.58 4.74 HOLD 0.20 0.19 1.65 5.24 4.72 4.91 N/A FET Folkestone Edu Trust 649.99 2.64 1.54 2.72 BUY 0.19 0.17 7.06 8.86 5.02 5.34 N/A AJA Astro Jap Prop Group 385.75 6.45 1.42 7.52 STRONG BUY 0.12 0.11 34.31 5.89 5.58 6.51 N/A GMG Goodman Group 12989.02 7.36 1.38 7.56 BUY 0.18 0.17 7.81 6.93 3.26 3.50 N/A SGP Stockland 10894.82 4.58 1.10 4.76 HOLD 0.16 0.15 7.61 9.79 5.37 5.60 N/A VCX Vicinity Centres 11440.50 2.92 1.04 3.09 HOLD 0.16 0.16 0.74 -1.67 6.10 6.00 N/A GOZ Growthpoint Property 2026.90 3.19 0.95 3.16 HOLD 0.15 0.14 3.02 6.63 6.46 6.77 Revised accounting treatment, increase in property values SCP Sca Property Group 1634.05 2.22 0.91 2.21 HOLD 0.16 0.15 7.53 6.06 5.46 5.87 N/A VVR Viva Energy REIT 1621.86 2.37 0.85 2.56 BUY 0.46 0.17 N/A 169.94 2.15 5.81 N/A WFD Westfield Corp 18723.59 9.06 0.55 10.41 BUY 0.21 0.20 -18.23 4.52 3.59 3.57 N/A CMW Cromwell Prop 1785.28 1.02 0.49 0.98 SELL 0.11 0.12 6.10 -6.88 7.93 7.98 N/A IDR Industria REIT 337.65 2.08 0.48 2.16 BUY 0.10 0.11 32.36 -15.91 7.50 7.68 N/A HPI Hotel Property 403.25 2.77 0.36 3.01 BUY 0.15 0.14 9.81 7.14 6.50 9.39 N/A INA Ingenia Group 479.81 2.71 0.00 3.30 BUY 0.20 0.17 14.73 17.91 3.37 4.11 N/A AVN Aventus Retail Fund 916.92 2.31 0.00 2.49 BUY 0.19 0.13 N/A 47.88 4.36 6.88 N/A GPT GPT Group 8787.51 4.88 0.00 5.04 HOLD 0.17 0.16 4.25 2.34 4.80 5.06 Change in substantial holding NSR National Storage 729.63 1.45 0.00 1.69 HOLD 0.17 0.16 10.68 5.58 6.01 6.29 N/A MGR Mirvac Group 7966.00 2.15 0.00 2.30 BUY 0.17 0.15 6.47 9.64 4.62 4.78 N/A BWP BWP Trust 1856.49 2.89 0.00 2.87 SELL 0.17 0.17 5.86 3.78 5.82 6.00 N/A IOF Investa Office Fund 2861.46 4.65 -0.21 4.44 HOLD 0.18 0.17 1.94 1.57 4.24 4.30 N/A CQR Charter Hall Retail 1734.43 4.26 -0.23 4.22 HOLD 0.14 0.14 1.88 -0.36 6.60 6.61 N/A GTY Gateway Lifestyle Group 601.79 2.00 -0.50 2.46 BUY 0.12 0.12 68.44 -4.36 5.75 5.68 N/A DXS Dexus Property Group 9050.31 9.30 -0.53 9.12 HOLD 0.16 0.16 1.21 3.08 4.67 4.82 N/A CHC Charter Hall Group 2042.95 4.92 -0.61 4.93 HOLD 0.16 0.15 9.14 8.05 5.47 5.78 N/A INM Iron Mountain Inc 2316.23 47.68 -0.65 40.00 BUY 0.32 0.28 -11.68 14.23 5.29 5.81 N/A LLC Lend Lease Group 8709.86 14.82 -0.80 16.25 BUY 0.12 0.11 13.85 6.18 4.04 4.39 N/A AOG Aveo Group 1924.23 3.28 -0.91 3.72 BUY 0.20 0.17 56.54 14.99 2.45 2.74 N/A CWP Cedar Woods Prop. 429.96 5.40 -0.92 5.62 BUY 0.10 0.10 3.39 2.71 5.22 5.42 N/A ARF Arena REIT. 475.67 2.01 -0.99 2.11 STRONG BUY 0.18 0.17 -11.46 8.43 5.44 5.90 N/A VLW Villa World Ltd. 277.17 2.41 -1.23 2.69 BUY 0.08 0.07 22.20 10.17 7.47 7.78 N/A

 IT stocks:

Daily Price Consensus Consensus 2016 EPS 2017 EPS 2016 Div 2017 Div Code Company Name Market Cap ($m) Price ($) 2016 PE 2017 PE Newsflash Change (%) Target Price ($) Rating GROWTH GROWTH Yield Yield LNK Link Administration 2590.54 7.50 4.17 8.38 HOLD 0.27 0.23 N/A 17.83 1.00 2.33 Link Administration Swings to 1H Net Profit A$41.4 Mln CL1 Class Limited 352.86 3.07 1.66 3.75 BUY 0.63 0.46 N/A 36.84 1.24 1.34 N/A CPU Computershare Ltd 7353.55 13.63 1.26 13.00 BUY 0.19 0.19 -11.41 -1.32 2.40 2.52 N/A NTC Netcomm Wireless 258.27 1.78 0.85 3.77 BUY 1.55 5.09 -17.86 -69.57 0.00 0.00 N/A IRE IRESS Limited 1893.32 11.17 0.27 12.35 HOLD 0.24 0.21 14.05 12.50 4.01 4.51 IRESS deploys MSO to TSB UK Bank MYO MYOB Group Limited 2189.25 3.60 -0.28 3.98 BUY 0.22 0.20 18.61 11.03 3.11 3.43 N/A WTC WiseTech Global Ltd 1505.46 5.15 -0.58 5.53 BUY 1.05 0.53 N/A 96.14 0.00 0.39 N/A TNE Technology One 1607.23 5.10 -0.58 5.73 BUY 0.39 0.34 14.89 15.54 1.81 2.17 N/A IFM Infomedia Ltd 230.01 0.74 -0.68 0.85 BUY 0.21 0.19 -23.46 15.04 3.98 4.08 N/A CAR Carsales.Com Ltd. 2682.10 11.03 -0.72 12.25 BUY 0.24 0.23 4.88 8.17 3.37 3.63 N/A ISD Isentia Group Ltd 560.00 2.76 -1.43 2.90 BUY 0.17 0.16 13.60 8.46 2.90 3.19 N/A ACX Aconex Limited 746.45 3.71 -1.59 4.00 BUY 0.81 0.90 542.31 -10.87 0.00 0.00 N/A GBT GBST Holdings.. 203.58 2.95 -1.67 3.30 HOLD 0.14 0.23 -22.03 -38.56 3.66 2.22 N/A HSN Hansen Technologies 679.46 3.67 -1.87 4.20 BUY 0.25 0.22 32.42 12.93 1.84 1.82 N/A ALU Altium Limited 1105.53 8.33 -1.88 9.15 HOLD 0.37 0.28 29.81 32.37 2.26 2.68 N/A CSV CSG Limited 227.01 0.69 -2.82 1.00 HOLD 0.09 0.09 10.00 -2.17 13.04 11.11 N/A NXT Nextdc Limited 883.47 3.02 -2.89 4.75 BUY 1.87 0.57 138.63 229.58 0.00 0.00 N/A

 Telco stocks:

Daily Price Consensus Consensus 2016 EPS 2017 EPS 2016 Div 2017 Div Code Company Name Market Cap ($m) Price ($) 2016 PE 2017 PE Newsflash Change (%) Target Price ($) Rating GROWTH GROWTH Yield Yield TPM Tpg Telecom Limited 5387.80 6.36 0.16 9.65 BUY 0.15 0.14 38.13 9.07 2.44 2.50 N/A TLS Telstra Corporation. 57682.49 4.84 -0.21 5.00 HOLD 0.14 0.14 1.93 -3.68 6.52 6.45 N/A VOC Vocus Comms Ltd 2543.45 4.08 -0.49 5.25 BUY 0.14 0.12 66.69 14.29 4.00 4.31 N/A CNU Chorus Limited 1599.47 3.91 -0.51 - - 0.17 0.13 -1.84 25.22 4.88 5.14 N/A SPK Spark New Zealand 6047.49 3.26 -1.21 - - 0.18 0.16 10.64 7.38 7.25 7.01 N/A SDA Speedcast Int Ltd 907.13 3.75 -1.83 4.50 BUY 0.22 0.14 1.67 62.99 2.17 3.04 N/A AYS Amaysim Australia 348.13 1.84 -1.87 2.50 BUY 0.16 0.12 121.57 33.34 4.37 5.54 N/A

 Utility stocks:

Daily Price Consensus Consensus 2016 EPS 2017 EPS 2016 Div 2017 Div Code Company Name Market Cap ($m) Price ($) 2016 PE 2017 PE Newsflash Change (%) Target Price ($) Rating GROWTH GROWTH Yield Yield AGL AGL Energy Limited. 16310.55 24.59 1.32 25.00 BUY 0.23 0.21 10.15 12.40 2.77 3.57 Appendix 3E Share Buy Back Notice APA APA Group 9594.19 8.69 0.93 9.60 HOLD 0.48 0.39 -20.01 20.85 4.82 5.07 N/A AST AusNet Services 5891.16 1.65 0.92 1.55 HOLD 0.16 0.21 24.60 -25.23 5.25 5.38 N/A SKI Spark Infrastructure 3986.37 2.38 0.42 2.53 BUY 0.23 0.23 -9.67 2.29 6.05 6.45 N/A DUE Duet Group 6788.20 2.78 -0.36 2.90 HOLD 0.34 0.29 67.17 16.44 6.36 6.66 Duet Group 1H Net Profit A$65.6 Mln, Down 27% on Year IFN Infigen Energy 796.19 1.00 -2.45 1.20 STRONG BUY 1.33 0.33 N/A 300.00 0.00 0.00 N/A EPW ERM Power Limited 301.29 1.17 -2.51 1.15 SELL 0.14 -0.14 -36.37 -196.41 10.30 7.44 N/A EWC Energy World Corpor. 789.05 0.43 -5.49 - - N/A N/A N/A N/A N/A N/A N/A 15 Page

Mathan Somasundaram > [email protected] Sales Commentary Alex Balzuhn > [email protected] Australian Market Trading Day Wrap 17 February 2017

Macro Charts:

Market (S&P 200) – Momentum remains positive despite stretched valuation…double top forming!!!

Volatility Index (XVI) – market trading at dead calm volatility while sudden macro worry could spike it

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Mathan Somasundaram > [email protected] Sales Commentary Alex Balzuhn > [email protected] Australian Market Trading Day Wrap 17 February 2017

Currency (AUDUSD) – looks to be topping as USD starts to recover on potential clarity on US tax policy and US Fed update

US Dollar Index (DXY) – US tax policy optimism and US Fed rate cycle hope driving the recovery

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Mathan Somasundaram > [email protected] Sales Commentary Alex Balzuhn > [email protected] Australian Market Trading Day Wrap 17 February 2017

Bond Yield (10 Year Bond) – recovering on US interest rate cycle

US Bond Yield (10 Year Bond) – US president flags tax policy clarity while US Fed provides clarity on rate cycle

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Mathan Somasundaram > [email protected] Sales Commentary Alex Balzuhn > [email protected] Australian Market Trading Day Wrap 17 February 2017

GOLD (Spot Gold in AUD) – recent rally runs into stronger USD on tax rate cut and interest rate hike outlook

WTI Oil (West Texas Intermediate Oil) – up trend remains in play as OPEC cuts runs into US shale recovery

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Mathan Somasundaram > [email protected] Sales Commentary Alex Balzuhn > [email protected] Australian Market Trading Day Wrap 17 February 2017

US making inflation great again!!!

US foreign policy outlook!!!

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Mathan Somasundaram > [email protected] Sales Commentary Alex Balzuhn > [email protected]

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