Australia and New Zealand Banking Group

ANZ estimates that the annual monetary impact of the tax would be approximately $345 million on a before tax basis, and approximately $240 million after tax based on its financials as on 31 March 2017. Further, the net financial impact, including the Bank’s ability to maintain its current fully franked ordinary dividend, will be dependent upon business performance and decisions make in response to the tax. Recently, Standard & Poor’s (S&P) has lowered its assessment of the standalone credit profiles of almost all financial institutions operating in Australia. As a result, S&P has downgraded its ratings on hybrid and subordinated debt instruments issued by ANZ by one notch in line with ANZ’s revised standalone credit profile, and affirmed senior unsecured credit rating at AA-(long term) and A-1+ (short term). The stock lost 10.4% in last three months (as at July 04, 2017), led by the new headwinds in the form of levy on banks liabilities coupled with challenging operating environment. However, given the banks diversified portfolio, adequate liquidity and funding position with reduction in provisions, we maintain a “Buy” recommendation the stock at the current market price of $29.29

Mantra Group Ltd

Commonwealth Games are expected to boost revenue growth: The Commonwealth Games that is scheduled for April 2018, will see participation from 6,600 athletes and team officials from 70 nations, and this 11-days sporting and cultural event is expected to be positive for the group. This will be the largest sporting event that Australia will see this decade and is estimated to have a $2 billion of economic impact. Moreover, there will be 17 competition venues consisting of 18 sports and 7 para-sports while over 1.5m spectators are expected. The group would largely benefit as it is the largest accommodation provider on the Gold Coast. Meanwhile, the group has completed 1,138 accommodation refurbishments, 10 hotel projects including 2 restaurants and 7 foyers. The 18 foyer and hotel guest spaces are currently underway and 5 major projects are to be completed in FY17. The shares of MTR have declined 10.9% in the last twelve months (as of July 04, 2017) owing to subdued performance in CBD segment. However, we expect the bullish momentum in the stock to catch up in coming months as the group is strengthening its leisure market while the CBD segment is performing reasonably.We give a “Buy” recommendation on the stock at the current price of $ 3.09

Platinum Asset Management Limited

During May 2017, Funds under Management grew by 1.8% month on month to $23.9 billion against 3.4% in April 2017. Recently, the company announced new Exchange Traded Managed Funds (“ETMFs”) and changes to product fees. The group will launch two Exchange Traded Managed Funds (ETMFs) in August 2017 as part of the strategy to help investors to access Platinum’s International and Asian equity strategies via the ASX. These new products will be structured as feeder funds into the existing unlisted Platinum International Fund and Platinum Asia Fund respectively, therefore they will have the same portfolio composition, portfolio managers and investment strategy as the underlying funds. The group has lowered the standard management costs on the Platinum Trust Funds and Platinum Global Fund from 1.5% to 1.35% pa to benefit clients with regards to channel choice and price options. However, the current fee and cost reductions will not have impact on 2017 revenues or profit as will not come into effect until on or about 3 July 2017, but are expected to lower PTM’s 2018 revenue. We expect that the company to regain the momentum driven by improving operational efficiencies and long-term efforts to drive the overall funds’ performance, and maintain a “Buy” recommendation on the stock at the current market price of $4.74

Bank of Queensland Limited

Continuous focus on asset quality and cost controlling measures: Recently, Standard & Poor’s (S&P) has downgraded its long-term credit rating of Bank of Queensland Limited (ASX: BOQ) to ‘BBB+’ from ‘A-’ as part of a downgrade of ratings on 23 Australian financial institutions, while maintaining a stable outlook. However, BOQ has a significantly lower level of exposure to the Sydney and Melbourne property markets than many other industry participants and the bank’s loan book has performed well in the central Queensland and northern WA.  During H1FY17, BOQ has faced several industry headwinds including low credit growth and intense competition for both loans and deposits. This has placed increasing pressure on Banks revenue and margins. Despite the tough operating environment, banks focus on asset quality and expense management coupled with growth in lending segment is expected to deliver earnings growth in FY17. The stock has declined by 5.6% in the last three months owing to fears over recent regulations on home loans. However, given the optimistic prospects over peers and no impact of recent levies, we maintain a “Buy” recommendation on the stock at the current price of $11.80

Freelancer Ltd

Robust growth in key markets in Q1FY17: During Q1FY17 (ending March 31, 2017) Freelancer Ltd reported a 20% yoy growth in cash receipts at $12.5 million on a rolling 12-month basis, with strong positive operating cashflow of $2.1 million. Importantly, the company witnessed a robust growth in key metrics in the core marketplace segment during the quarter, while the core infrastructure, systems and processes are refurbished. Q1 2017 saw a strong bounce in accepted projects as issues in the core desktop project funnel were corrected in mid-January 2017, while projects posted on mobile reported an exceptional growth of 79% yoy during the quarter. Moreover, the company’s advantage lies in the revenue composition as USD is the main operating currency of the group and contributed to 75% of revenue in FY16. The company held cash and equivalents of A$34.7 million with no debt on balance sheet as on March 2017.  The stock declined 50.2% in last one year (as on July 04, 2017) owing to slowdown in Escrow.com revenue and increased operating costs in FY16, and currently trading at its 52 week low levels. Given the improving operating performance across business segments in Q1FY17, and strong balance sheet, we maintain a “Buy” recommendation on the stock at the current market price of $ 0.79

Nearmap Ltd

Launch of NZ capture program and first commercial sale: NEA has completed a one-off capture of New Zealand’s main economic areas during the period, and has already secured the first commercial sales of the imagery to its Australian customers. The pilot capture program was completed in March and covers approximately 72% of the New Zealand population. Further, this pilot program allows the company to explore the expansion of Nearmap’s world leading technology in the global location content market. For H1FY17, Nearmap posted a revenue growth of 38% year on year (yoy) to $19.4m while EBIT grew by 46% yoy to $10.2m led by solid growth in both Australia and the US. The stock has declined 11.6% in the last six months as on July 04, 2017 over investors’ concerns on NEA’s expansion into the USA, while it has moved up 12.9% in last one month. Given the increasing market opportunity for aerial imagery (market opportunity of USD$1.5 billion in 2017) and NEA’s leadership in Australia, while disrupting the larger US market, we expect the company’s financials to improve. Hence, we reiterate a “Buy” recommendation on the stock at the current market price of $0.60

Bionomics Ltd

BNC210 data demonstrates improved efficacy and faster recovery levels: BNC210 has demonstrated efficacy in the contextual fear-conditioning extinction paradigm in C56BL6 mice where it significantly enhanced fear extinction, reducing fear behavior, while diazepam (Valium) demonstrated an inhibitory effect resulting in prolonged fear behavior. In humans, BNC210 treatment reduced the emotional impact of a CCK-4 induced panic attack. Individuals who suffered an induced panic attack, and to whom BNC210 was administered, showed faster recovery following their unpleasant physical and emotional experience, compared to placebo. The data continues to demonstrate BNC210 is a potent anxiolytic compound with equivalent acute efficacy to benzodiazepines with anti-depressant properties and few side effects. Notably, it highlights the potential of BNC210 as a novel treatment for patients who are suffering with GAD and other anxiety related disorders and suggests a role for BNC210 in the treatment of stress and trauma related disorders.BNO stock has moved up 12.9% in the past one month, while it is up 27.4% as on July 04, 2017, led by improving sentiments at the back of the ongoing developments. We maintain a “Buy” recommendation at the current market price of $ 0.40

Mesoblast limited

Rheumatoid Arthritis (RA) trial results: Mesoblast Limited (ASX: MSB) has presented the results from Phase-2 trial of its proprietary allogeneic Mesenchymal Precursor Cells (MPCs) in patients with biologic refractory rheumatoid arthritis (RA) at the Annual European Congress of Rheumatology held in Madrid. The trial had met its primary endpoints, and the data indicated an early trend to improvements in patient-related outcome measures. Further, the results promise and support further development of Mesoblast's mesenchymal precursor cells for biologic-refractory rheumatoid arthritis patients, a population with substantial medical need. Notably, major advances in the treatment of RA using biologic agents have resulted in a $19 billion global market in 2016, the majority of which is due to use of anti-TNF agents. The RA population resistant to anti-TNF agents, which constitutes about one-third of patients treated with anti-TNF agents, is the fastest growing branded market segment within the global RA biologics market, and is set to grow further as multiple anti-TNF biosimilars become available. There are approximately 6 million prevalent cases in the United States, Japan, and EU5, with 2.9 million in the United States alone in 2016. Although, the stock has moved up 51.2% over the past six months as on July 04, 2017, led by the optimistic results from ongoing clinical trials, given the ongoing progress on clinical trial programs, we reiterate a “Buy” recommendation on the stock at the current market price of $2.20

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