Tuesday 9th March – Australian Market Wrap

ASX 200 up 32 points to 6771 (0.47%). Dow futures up 210 points. Initial splurge once again evaporated as tech stocks fell again and miners saw positives turn negative with BHP falling 0.8% and FMG off 0.1%. Gold miners eased as bullion remains under a cloud, NCM down 1.5% and NST down 1.3%. Energy stocks eased with STO down 1.8% and WPL flat.  Banks were the strength in the market yet again as the Big Bank Basket hit $168.56. MQG going from strength to strength rising 2.4%, Insurers stronger with QBE up 3.8% and SUN up 2.9%. IAG swooned on potential fall out from Greensills but denied in trading halt and rebounded but still off 4.0%. Tech stocks and especially BNPL stocks under serious pressure. APT hit $100 before a bounce back to close down only 3.6%, Z1P fell 1.6%, SPL off 5.5% with a good bounce in NXL up 18.5% following guidance reaffirmed daily. Other high-flyers losing ground, PBH down 3.7%, MP1 off 4.4% and PME down 5.7%. In corporate news, VOC rose 8.6% after a firm bid from MIRA and Aware Super at 550c. WSA in a halt raising $100m. Economic news with the NAB Business survey for February: Conditions: +15, up from +9. Confidence: +16, up from +12. Vaccine rollout helping. ANZ-Roy Morgan Weekly Consumer Sentiment Index up 1.5% to 111.9. 10-year yields at 1.77% steady. AUD eases to 76.58c. Asian markets higher with Japan up 1% and China flatlining.

Today’s Highlights

  • ASX 200 up 32 to 6771.
  • High 6810 Low 6742
  • Big Bank Basket pushes to $168.56.
  • All Tech Index down 1.15%
  • Dow Futures up 210.
  • Gold steady at 2205.
  • 10-year yield steady at 1.77%.
  • AUD slips to 76.58c
  • Bitcoin rallies to 53619.
  • Asian markets higher with Japan up 1% and China flatlining

STOCKS

  • NXL +18.51% positive broker comments for a change.
  • VOC +8.60% agreed takeover by MIRA and Aware.
  • KMD +4.04% Macquarie upgrade.
  • APX +4.96% signs of life.
  • PME -5.66% growth stocks under pressure.
  • PBH -3.75% valuations fall.
  • APT -3.61% off lows but still under pressure.
  • DW8 +28.57% business update.
  • IAG -3.95% swoons and rallies on Greensills update. No exposure.
  • LOT +8.70% corporate presentation.
  • ALQ -0.52% JP Morgan upgrades.
  • AMP +2.45% sells AMP Capital’s global equities funds management.
  • WAF -unchanged- maiden guidance.
  • SXY -2.60% gas deal with CleanCo.
  • IPO of the Day (DDH) -20.91% not a great start to life.
  • Speculative stock of the day: Redflow (RFX) +46.30% largest battery sale in California. RFX has signed an agreement with Rialto Bioenergy Facility, LLC to supply an energy storage system comprising 192 zinc-bromine flow batteries to support two megawatt hours (MWh) of energy and reduce peak energy use at Anaergia’s Rialto Bioenergy Facility. Good volume too.
  • Biggest Winners: NXL, VOC, CTD, PODN, PLL, URW, SYR, CUV and AX1.
  • Biggest Losers: ADH, PME, SPL, AND, MP1, OCL, BBN and IAG.

TODAY

  • Vocus Group (VOC) +8.60% To be acquired by MIRA and Aware Super consortium for 550c/share in cash. Values Vocus equity at $3.5bn and an enterprise value of $4.6bn. Board unanimously recommends Vocus shareholders vote in favour of the offer.
  • Cochlear (COH) +1.41% Receives FDA clearance of Baha 6 Max.
  • Galaxy Resources (GXY) +2.23% Releases preliminary economic assessment for James Bay low-cost spodumene project. Cash operating costs (FOB Montreal) of US$290/t of concentrate. Capital cost estimate of US$244m. Sees average annual production of 330ktpa of spodumene concentrate with 18-year mine life. Pre-tax internal rate of return of 39.6%, with a payback period of 2.2 years. Pre-tax net present value of US$56m at an 8% discount rate. Mineral Resource of 40.3Mt at 1.4% Li2O. The project is on schedule to achieve “construction ready” status by year-end. Galaxy plans to integrate James Bay with a downstream lithium chemicals facility and discussions with a number of prospective partners will be advanced with the release of the preliminary economic assessment (PEA).
  • News Corp. (NWS) +0.63% Executive Chairman Rupert Murdoch discloses purchase of 500K shares.Murdoch beneficially owns 2.7m shares of common stock following the transaction.
  • Sandfire Resources (SFR) +1.51% Reports high-grade gold results from SE Traverse prospect at the Sam’s Creek gold project.
  • Western Areas (WSA) – $100m equity raising at a floor price of 215c/share to complete Odysseus development and advance projects at Forrestania and Cosmos. Fully underwritten placement to raise $85m. Non-underwritten Share Purchase Plan available to eligible shareholders to raise up to $15m at the same price as the placement.
  • AMP (AMP) +2.45%Fiera Capital acquires Global Equities capability from AMP Capital, terms undisclosed.
  • Senex Energy (SXY) -2.60% Agrees further domestic gas sales agreement with CleanCo Queensland for 2.55 PJ of natural gas in 2022. The one-year agreement starting on 1 January 2022 brings Senex’s total contracted volumes with CleanCo to more than 5.1 PJ over the 2020-22 calendar years. Gas will be supplied at the Wallumbilla Gas Hub in Queensland at a fixed price in line with current market levels.

ECONOMIC NEWS

  • NAB monthly survey: Business confidence rose 5 index points in January, to an above-average 10 points. In contrast, business conditions pulled back to +7 index points from the very strong December, to remain just above average and back around November levels.
  • Consumer confidence continues to rise, jumping 1.5% last week as Australia reported stronger-than-expected Q4 economic growth and ANZ Job Ads surged.
  • The seasonally adjusted estimate for total dwellings approved fell 19.4% in January.
  • Private sector houses fell 12.2%, while private sector dwellings excluding houses fell 39.5%, in seasonally adjusted terms.

CV19 NEWS

  • The Covid-19 U.K. variant has spread to 79% of Houston’s wastewater treatment plants.
  • U.S. airlines carried an average of more than 1m passengers a day in the past week, highest number in non-holiday period since pandemic began.
  • The Netherlands will extend its lockdown until the end of March, but slowly ease some restrictions.
  • More than one-third of the U.K. population has received a first dose of the coronavirus vaccine.
  • Indonesia clears AstraZeneca vaccine for emergency use.

BOND MARKETS

ASIAN NEWS

  • Chinese state-backed funds were said to intervene on Tuesday to alleviate declines in the stock market. Champion stocks that drove the market higher are falling the most. Not a great look for the National People’s Congress with a rout in the stockmarket.

Targets coming from NPC.

  • China wants 65% of its population to live in towns and cities by 2025, up from 60.6% in 2019.
  • Beijing is targeting a ratio of 3.2 doctors per 1,000 people by 2025, up from 2.9 today. US$580bn in R&D spending
  • China is backing nuclear power as part of its drive to cut carbon emissions. The government aims to have 70 gigawatts of nuclear generation capacity by 2025 from about 50 gigawatts at the end of last year. That is about 20 new nuclear power plants.
  • China’s plan is for forests to cover 24.1% of the country’s total land area by 2025, up from 23.2% in 2019.
  • Japan’s GDP grew an annualised 11.7% from the prior quarter in the three months through December.

US AND EUROPEAN HEADLINES

  • It’s the first time since 1993 that the Dow rose and closed within 1% of a record, while the tech-heavy gauge was down more than 10% from its high.
  • IPOX SPAC Index — declined 2.6% Monday, its fourth down day out of the last five sessions.
  • Chamath Palihapitiya’s Social Capital Hedosophia Holdings Corp. V, a SPAC — fell as much as 11% at one point before closing Monday down 9%.
  • Apollo Global Management will merge with Athene to create a US$29bn conglomerate.
  • CDC says vaccinated Americans can socialise without masks.
  • New US Treasury auctions could send shockwaves through the market.

And finally…..

Does anyone know how to cancel a bid on eBay, I bid £10 on a cowboy outfit and I’m two hours from owning Newcastle football club.

Clarence

XXXX