ASX 200 bounced 56 points to 6818 (0.8%). Dow Futures up 99 points. A strong day today and this time it stuck. Big banks and Big Miners combined to keep the index buoyant. Higher community prices helping push BHP to records up 3.5% and RIO up 2.0% ahead of dividends. FMG rallied 5.7% after a nasty fall yesterday. Gold miners also back in favour if only for a brief window, NCM up 1.6% and NST up 4.2%. Second line golds did especially well with GOR up 6.0% and RMS up 13.7%. Base metal stocks also doing well with OZL up 3.9% and S32 up 4.7%, plus uranium stocks in demand, PDN rising 10.7%. Energy stocks mildly better with STO up 1.5% ahead of the OPEC+ meeting on Thursday. Big Banks in demand as yields rise at the long end. The Basket rose to $163.19 with ANZ the best of the bunch up 2.5%. Industrials mixed, CSL dropped 1.0% and WOW down 1.7%. In the tech space, APT remains under pressure down another 2.2% today with XRO off 2.6% and the Index down 1%. In corporate news, SBM up 0.8%, appointed MAH as underground mining contractor at Gwalia. NEC down 1.0%, names Mike Sneesby as CEO. In economic news, GDP beat estimates and rose 3.1% ahead of 2.5% forecast. 10-year yields still around 1.68% with the AUD slightly higher at 78.25c. In Asia, Japan up 0.2% and China up 1.2% ahead of Communist Party get together.

Today’s Highlights

• ASX 200 up 56 to 6818. Closes on high.
• High 6819 Low 6774. Below average volume.
• Big Bank Basket rockets to $163.19
• All Tech Index down 0.98%
• Dow Futures up 99.
• Gold rises to AUD$2217.
• 10-year yield steady at 1.68%.
• AUD rises to 78.25c.
• Bitcoin slips to US$48957.
• In Asia, Japan up 0.2% and China up 1.2% ahead of Communist Party get together.

STOCKS

• LYC +6.04% 8-year high.
• PDN +10.71% Uranium stirring again.
• RMS +13.69% DEG +10.47% WAF +9.66% gold miners
• PLL +12.77% results of first court hearing.
• APT -2.20% pressure continues as Klarna gears up.
• NXL -3.36% slide continues.
• ERA -2.50% appointment of CFO.
• COH -3.20% falling on deaf ears.
• MFG -2.08% conservative portfolio boas continues.
• VXR -14.13% profit taking.
• RIO +2.02% chair to step down after Heritage destruction.
• WZR +5.26% new warehouse facility.
• NEC -0.98% new CEO.
• IOU -10.34% cleansing statement.
• VML +25.81% US rare earth play.
• MYQ +13.02% going from strength to strength.
• SVL +7.14% bullion bounce helps silver.
• IPO of the Day: EZZ Life Sciences (EZZ) +132.00% great first day debut. Good volume too. No new news.
• Speculative stock of the day: Nothing special today.
• Biggest Winners: PDN, PLL, ABR, PDN, DEG, WAF, BET and PAR.
• Biggest Losers: NVX, BRN, EHE, GRR, NWS, DHG and DRR.

TODAY

• Mesoblast (MSB) +1.28% CEO says that there are no concerns about the company’s cash position.CEO Silviu Itescu told newswires auditors had been concerned about the group’s ability to continue as a going concern. Adding it is the normal course of business for a biotech. Itescu said MSB currently has 18-24 months of cash.
• Bellevue Gold (BGL) – Trading suspended in BGL pending an announcement regarding orders from the Supreme Court of Western Australia. On Monday, the company noted an administrative oversight in relation to the appointment of its previous auditor, Grant Thornton.
• Northern Star Resources (NST) +4.20% On track to achieve FY21 production guidance 1.5-1.7Moz at an AISC $1,390-$1,520/oz. Sees growth from aggressive exploration, FY21 exploration budget $150m. Kalgoorlie Operations: Production target 1.1Mozpa. Yandal Operations: Production target 600kozpa. North American Operations: Production target 300kozpa.
• CIMIC Group (CIM) +0.76% Understood to be looking at IPO for Thiess in 2022. Prior to any IPO, it is understood that Thiess intends to diversify its business via acquisitions, reducing its exposure to coal mining. A the end of 2020, CIMIC completed the sale of a 50% interest in Thiess to Elliott for $2.2bn.
• Nine Entertainment (NEC) -0.98% Chairman Peter Costello has assumed a greater role in the day-to-day running of the company.Costello is reportedly running the show with outgoing CEO Hugh Marks largely absent from key investor meetings following the company’s first-half results. Key negotiations with Google and Facebook over payment for content have been handed to Costello and Chief Digital and Publishing Officer Chris Janz. Nine Entertainment has also moved to appoint Mike Sneesby as CEO effective 1-Apr.
• Warrego Energy (WGO) -2.33% completes acquisition of a 50.1% interest in El Romera. Company statement: The facility is currently exporting electricity to the Spanish grid and the medium-term target at El Romeral is to increase on site gas production, and in turn electricity generation, from the current 22% towards the nameplate capacity. In the medium to long term, gas production can be increased via the drilling of new wells targeting already identified development locations and low risk prospects.
• Energy Resources of Australia (ERA) -2.50% CFO David Blanch resigns to take up role with Rio Tinto. Richard Prest has been appointed CFO, effective 8-Mar.Prest is currently General Manager Finance for Rio Tinto Aluminium’s Pacific Operations business unit.
• Carnarvon Petroleum (CVN) -1.79% secure rig for high impact Pavo & Apus drilling. Highlights: Noble Tom Prosser drilling rig contracted to drill the Pavo-1 and Apus-1 exploration wells. Positive drilling results are capable of materially increasing Carnarvon’s resources in the region. Both exploration targets have the potential to be tied back to Dorado enhancing project economics.
• Freedom Foods Group (FNP) – completes first stage of the sale of its Cereal and Snacks operations to The Arnott’s Group. The completion of the first stage has occurred with ownership of certain fixed and other assets transferring today to The Arnott’s Group. Freedom Foods Group continues to operate the Cereal and Snacks business pending the transfer of the remaining assets and full completion of the sale due to take place by the end of March 2021.
• Adslot (ADS) +7.14% executes agreement with Fyllo for suite of compliance software related to highly regulated industries such as the cannabis industry in the US.
• Pacific Smiles Group (PSQ) -unchanged –  completes $15.0m placement at 260c a share.
• St. Barbara (SBM) +0.76% Appoints Macmahon as underground mining contractor at Gwalia. The initial contract term is five years, with an option for St Barbara to extend for a further three-year period. St Barbara and Macmahon expect to sign the mining services agreement in March 2021.
• Rio Tinto (RIO) +2.02% Chair Simon Thompson will not seek re-election as a non-executive director at the 2022 AGM. Sam Laidlaw, senior independent director of Rio Tinto plc, and Simon McKeon, senior independent director of Rio Tinto Limited, will now jointly lead the search for Simon’s successor as Chair.
• Macmahon Holdings (MAH) -4.55% provides further detail on St Barbara contract; will add ~$500m to order book. Contract will require capital expenditure of ~$40m over FY21 and FY22. Full mobilisation expected in May.
• Piedmont Lithium (PLL) +12.77% announce intent to re-domicile in US via a proposed Scheme of Arrangement; announce new Chairman. Re-Domicile details: To implement the re-domiciliation Piedmont has entered into a Scheme Implementation Deed with Piedmont Lithium. If the Scheme is approved Piedmont will move its primary listing from ASX to the Nasdaq and will retain its ASX listing via Chess Depository Interests. The Board believes that becoming a US company will allow Piedmont to streamline business operations given that all of core assets and management team are currently in US as well as increase access to capital. Piedmont shareholders will be given opportunity to vote on the Scheme at a meeting to be held in Mar-21. and subject to conditions being satisfied the scheme is expected to be implemented in Mar-21. Management changes: As part of re-domiciliation the board has appointed director Jeffrey Armstrong as Chairman to replace Ian Middlemas, effective immediately. Middlemas will also resign as a director.
• PSC Insurance Group (PSI) +2.13% to acquire two UK based commercial (SME) broking businesses. Highlights: Acquisition of Trust Insurance Services for a base consideration of £15.5m ($28m equivalent) and Abaco Insurance Brokers for a base consideration of £21.0M ($38m). Acquisitions expected to generate a combined incremental annual EBITDA of £4.0m ($7.2m). Funding for the acquisitions will be via the Group’s existing cash resources.

ECONOMIC NEWS

• Australian Gross Domestic Product (GDP) rose 3.1% over the December quarter vs estimates of ~2%. Head of National Accounts at the ABS, Michael Smedes said: “The economy has continued to recover with activity increasing 3.1 per cent in the December quarter following the 3.4 per cent rise in September quarter. However, despite the two consecutive quarters of strong growth, economic activity remained 1.1 per cent lower than recorded in the 2019 December quarter.” This is the first time in the over sixty-year history of the National Accounts that GDP has grown by more than 3.0 per cent in two consecutive quarters.

Payroll jobs held steady (0.0%) between the weeks ending 30 January and 13 February 2021. Largest changes:

• the Northern Territory (up 1.4%)
• Education and training (up 2.8%)

Total wages increased by 2.1%. Largest changes:

• New South Wales and South Australia (both up 2.4%)
• Mining (up 7.2%)

• Household spending surged 4.3% from the prior quarter, adding 2.3% to GDP; government spending increased 0.8% Q/q, contributing 0.2%.

• The economy has now recovered 85% of the virus hit.
• Treasurer plays down tax hike to pay for aged care.

CV19 NEWS

• Japan’s government is considering a 2 week extension of the state of emergency for the Tokyo area.
• Brazil hits a record for daily CV19 deaths. 1641 people dies in the last 24 hours with a total now of 257,361 dead.
• Ireland reported the fewest new cases since December. NY could have 5m vaccinated by June.
• Vaccine Tracker: 265m doses in 108 countries. 6.14m a day., US 78.6m with an average of 1.94m.
• Australia’s international border will remain shut for at least another three months, as the government considers the Covid-19 situation overseas an “unacceptable public health risk.”
• President Biden said he hopes the U.S. would be back to normal “by this time next year.”

BOND MARKETS

ASIAN NEWS

• Chinese Caixin services PMI falls to 51.5.
• China fast ctaching up with the US.

• China has big plans in the Chip market. Beijing had set aside at the start of its last five-year plan around 1 trillion yuan ($155bn) for potential investment in semiconductors over five to 10 years. Taiwan looks interesting then. Big M&A option there.

The current landscape:

• President Xi Jinping has promised an estimated US$1.4 trillion through 2025 for technologies ranging from wireless networks to AI. A big chunk of that is geared toward semiconductors.

US AND EUROPEAN HEADLINES

• Biden says US will have enough vaccine to jab everyone by end of May.
• Josh Frydenberg warns that global stimulus threatens financial stability.
• POTUS Biden has withdrawn the nomination of Neera Tanden for the lead of the Office of Management and Budget.
• Weak jobs data and retail pointing to a double dip recession.
• SEC chief Gensler has pledged a review into the market structure after GameStop volatility.
• UK Budget tonight.

And finally….

Clarence

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