Tuesday 23rd November – Australian Market Wrap

The ASX 200 rallies 58 points to 7411 (+0.8%) as bond yields rise to 1.87% in the 10-years. Banks did well on the back of the rising yields with the Big Bank Basket bouncing back broadly to $174.37 up 1.1%. Insurers also rallied on higher rates with QBE up 1.2% and SUN rising 1.9%. Higher rates hurt tech stocks as APT led the rout following Square falling over 6% in the US. APT down 5.4% and the All Tech Index falling 3.1% with WTC and XRO both substantially weaker. Industrials firmed as TCL rose 2.3%, TLS up 0.3% after KKR bid for the Italian mob, REITS rallied led by SCG up2.3%. But the real action was in iron ore stocks as China seems poised to stimulate and Dalian futures rose limit up, BHP rose 4.0% on the WPL merger news with the oil company up 3.5%, RIO up 3.6% but FMG the stand-out galloping 9.8% ahead. Clearly pays to be green and clean. Base metal stocks also bolted higher, PLS up 1.6%, MIN up 4.9% and OZL up 1.4%. Energy stocks in demand as OPEC plus fights back against the evil empire about to release the strategic reserves. In corporate news, 4DX rose 15.4% on its first commercial deal, MNS rallied 18.9% as it trades on US markets tonight and GMA launched a buyback. 360 in a trading halt as it raises money to buy a Tile. BAP dropped 9.6% as popular CEO/MD announced his retirement.

MAJOR MOVERS:

  • Winners: FMG, CIA, AEF, GMA, NHC, GRR, YAL, AVZ, PDN
  • Losers: BAP, DUB, KED, VUL, ABB, WTC, SLR, EML, BRN
  • Positive sectors: Banks. Iron ore miners. Base metals. Healthcare. REITs
  • Negative sectors: Tech. Gold miners
  • High 7414 Low 7359. Bounce and hold
  • Dalian Iron ore futures limit up
  • Big Bank Basket: Higher at $174.37(+1.1%) Bond bounce helps
  • All-Tech index: Down 3.1% APT down 5.4%
  • Gold: Weaker at AUD2502
  • Bitcoin: Steady at US$57051
  • Aussie Dollar:  Lower at 72.21c. 10-YEAR YIELD: Higher at 1.87%.
  • Asian Markets: Japan down 0.08%, Hong Kong down 1.01% and China up 0.43%.
  • US Futures: Dow futures up 28 NASDAQ futures down 34.

STOCKS ON THE MOVE

  • FMG +9.81% iron ore on the move.
  • CIA +8.04% ore winner today.
  • GMA +5.96% announces buy back.
  • MIN +4.93% lithium and iron ore exposure.
  • PNI – trading halt – buys 25% stake on Five V Capital.
  • PLS +1.61% increases debt facilities.
  • LNK +0.61% affirms FY22 guidance, updates Carlyle bid.
  • BKW +2.42% trading update
  • 4DX +15.42% first commercial deal.
  • VR1 +7.50% Metaverse release towards Webex integration.
  • JDO +0.44% initiated at neutral by Citi.
  • SWK +7.04% letter to shareholders.
  • TNE -2.86% dividend jumps as profit grow.
  • MYx -3.23% no guidance at AGM.
  • BET -5.00% RAS listing perhaps. PBH plunging too -5.96%
  • VUL -5.96% gloss wears off slightly.
  • KMD -1.33% warning on supply chain issues.
  • BAP -9.58% CEO/MD retires.
  • QPM +7.89% AGM presentation.
  • DUB -8.85% tech sell off.
  • APT -5.37% not so hip to be Square.
  • CAE -21.28% crowd moving on.
  • AMS -7.36% confirms guidance.
  • TNT -7.89% soggy.
  • LBY -9.52% revised FY22 guidance.
  • ABR -5.00% capital raise.
  • STP -3.73% undies are down.
  • WTC -5.63% tech wrecked.
  • IPO of the Day: RAS Technology (RTH) +6.67% provider of premium data, enhanced content, and software as a service solutions to racing and gaming industry.
  • Speculative stock of the Day: Magnis Energy Tech (MNS) +18.81% US trading in MNS begins tonight on OTCQX.

IN THE NEWS

  • Northern Star Resources (NST) has agreed to acquire Newmont’s Australian power business for US$95m. As part of NST’s purchase of 50% of Kalgoorlie Consolidated Gold Mines, NST has paid US$25m for an option to buy the Newmont power business, in which the cost of the option will reduce the final purchase price, leaving a net balance of US$70m. The sale is expected to take place on the 21st of December.
  • Genworth Mortgage (GMA) has announced a $100m share buyback. The buyback will be on-market, and the $100m aggregate value represents 11% of the company’s issues shares, as per yesterday’s closing price of 218c. The buyback is designed to bring GMA’s solvency ratio more in line with the company’s target capital range and will begin on December 8. UBS has been appointed as the transaction broker for the buyback.
  • 4DX – First commercial scans with I-MED to commence in December. Rollout with Australia’s largest diagnostic imaging provider. First revenues from I-MED will begin at commencement. Good sign for the company and it has a strong near term pipeline plus $72m in cash to scale and execute.
  • High flyer Life360 Inc (360) – The company is acquiring Tile for a consideration of $170m plus up to $35m in staff retention payments. Tile was founded in 2012 and is a global leader in finding things and the location of unique items. You have probably seen the ads for putting a Tile on your car keys etc. The acquisition will be funded by $132.4m in cash and up to $37.6m of new 360 shares.. The company is doing an underwritten accelerated non-renounceable entitlement issue of a 1 for 15.64 at 1200c. The Theoretcial Ex Rights Price (TERP) is 1331c.
  • Mayne Pharma Group (MYX) has chosen NOT to provide an update at its AGM today, stating that YTD trading is not a reliable reflection of the expectations it has for this period and the remainder of the financial year. The CEO has said that “one-off supply disruption” slowed the launch of pivotal new products but expects to reverse the disruptions for the remainder of the year.

ECONOMIC NEWS/ BOND MARKETS

CV19 NEWS

  • CV19 cases in some states in the US are as high as they were last November.
  • Chancellor Angela Merkel said the latest surge in Covid-19 infections is worse than anything Germany has experienced so far.

ASIAN MARKETS

  • China’s birth rate dropped to a new low in 2020. There were 8.5 births per 1,000 people last year, the lowest in data back to 1978.
  • Total of 1.41bn people at the end of 2020 in China.
  • Samsung picks Texas. Taylor gets the nod. Near Austin.
  • Alibaba shares continue to slide with broker downgrades weighing now. JD.Com now the flavour of the month it seems.

US AND EUROPEAN NEWS

  • Powell gets nod. Biden says he will run again in 2024.
  • OPEC Plus warns on release of strategic stockpiles. It may reconsider output increases.
  • Theranos founder takes the stand.
  • Chilean conservative has narrow lead in election.
  • Uber Eats will deliver cannabis in Ontario.
  • Brussels not making life easy for UK banks as it looks to curb ‘cross-border’ permissions.
  • ‘No Time to Die” highest grossing film in 2021.
  • 7 out of 10 US Xmas shoppers start before Halloween.

And finally….

Do you like to read a good murder mystery?  Not even Law and Order would attempt to capture this mess.  This is an unbelievable twist of fate! At the 1994 annual awards dinner given for Forensic Science (AAFS), President, Dr. Don Harper Mills astounded his audience with the legal complications of a bizarre death.

Here is the story:

On March 23, 1994, the medical examiner viewed the body of Ronald Opus, and concluded that he died from a shotgun wound to the head.

Mr. Opus had jumped from the top of a ten-story building intending to commit suicide. He left a note to the effect indicating his despondency.  As he fell past the ninth floor, his life was interrupted by a shotgun blast passing through a window, which killed him instantly.

Neither the shooter nor the deceased was aware that a safety net had been installed just below the eighth floor level to protect some building workers, and that Ronald Opus would not have been able to complete his suicide the way he had planned.

The room on the ninth floor, where the shotgun blast emanated, was occupied by an elderly man and his wife.  They were arguing vigorously and he was threatening her with a shotgun!  The man was so upset that when he pulled the trigger, he completely missed his wife, and the pellets went through the window, striking Mr. Opus.

When one intends to kill subject ‘A’ but kills subject ‘B’ in the attempt, one is guilty of the murder of subject ‘B.’

When confronted with the murder charge, the old man and his wife were both adamant, and both said that they thought the shotgun was not loaded.  The old man said it was a long-standing habit to threaten his wife with the unloaded shotgun.  He had no intention to murder her.  Therefore the killing of Mr. Opus appeared to be an accident; that is, assuming the gun had been accidentally loaded.

The continuing investigation turned up a witness who saw the old couple’s son loading the shotgun about six weeks prior to the fatal accident.  It transpired that the old lady had cut off her son’s financial support and the son, knowing the propensity of his father to use the shotgun threateningly, loaded the gun with the expectation that his father would shoot his mother.

Since the loader of the gun was aware of this, he was guilty of the murder even though he didn’t actually pull the trigger.  The case now becomes one of murder on the part of the son for the death of Ronald Opus.
Now comes the exquisite twist…

Further investigation revealed that the son was, in fact, Ronald Opus.  He had become increasingly despondent over the failure of his attempt to engineer his mother’s murder.  This led him to jump off the ten-story building on March 23rd, only to be killed by a shotgun blast passing through the ninth story window.  The son, Ronald Opus, had actually murdered himself.  So the medical examiner closed the case as a suicide.
 

 
A story this good should be true. Alas, it’s not. According to Snopes there never was a suicidal Ronald Opus, a feuding, shotgun-wielding older couple, or an increasingly confused medical examiner trying to get to the bottom of things. But there is some truth to it, for there is a Don Harper Mills, and he did tell this very story at a meeting of the American Academy of Forensic Sciences. Mills explained that he made up the story to present to the meeting for entertainment and illustrate how changing a few small facts can greatly affect the legal consequences.