ASX 200 up 2 to 7066 in a quiet start to the week. Early euphoria evaporated as US futures slipped 85 points. Volume again on the low side.  Banks back in favour with the Big Bank Basket up to $169.81, MQG moved 0.7% higher with MPL unchanged after a new CEO named. Materials were mixed, BHP unchanged but FMG up 1.8% and RIO up 1.7%. Energy stocks slipped with STO down 1.3% and WPL down 1.9%. Gold miners found more friends with NST up 2.3% and NCM better by 0.9%. MIN bounced back by 2.3% on broker upgrades after production numbers disappointed. PLS rose 1.9% as ORE/GXY agreed a merger of near equals to create the worlds’ 5th largest lithium producer. Industrials were mixed, WES better by 0.3% and TCL up 0.6% with TLS slipping 1.7% and REITS softer. Tech stocks eased as APT fell 0.9% and XRO dropped 0.9%. The All–Tech Index down 0.55%. In corporate news, SVW launches US$500m placement and $50m share purchase plan at 2250c/share. COE up 5.4% on record production numbers. SGM adding 8.95% after updating guidance. Nothing on the economic front, 10-year yields slipped back to 1.71% and AUD steady. Asian markets better with China up 2.1%, Japan up 0.6%.

Today’s Highlights

  • ASX 200 up 2 to 7066. Below average volume.  
  • High 7095 Low 7066 – Narrow range. Closes on lows.
  • Big Bank Basket higher at $169.81.
  • All Tech Index down 0.55%
  • European futures pointing to modest gains.
  • Dow futures down 85
  • Australian Gold up to $2298.
  • 10-year yield falls to 1.71%.
  • AUD steady at 77.36c.
  • Bitcoin bounces from lows to US$57123.
  • In Asia, Japan up 0.2% and China showing a clean pair of heels up 2.1%.

STOCKS

  • PDN -7.50% uranium gloss wearing off.
  • MYX -6.86% profit taking.
  • NSR -3.62% smashed today.
  • Z1P -4.49% becoming a substantial shareholder.
  • PBH -4.11% more competition.
  • SGM +8.95% trading update.
  • TLT +5.14% update on PowAR acquisition
  • ORE +5.65% GXY +6.09% merger of equals to create lithium powerhouse.
  • BGL +4.35% gold miners’ rally.
  • OIL +28.00% new non-executive appointment.
  • PRL +27.59% MOU with Total Eren.
  • RHC -0.36% more govt support and tariff increase in France.
  • DW8 -9.68% rocket emojis heading down.
  • MNS -9.41% funding deal.
  • MPL unchanged- new CEO appointed.
  • Speculative Stock of the Day:  Nothing on any volume today.
  • Biggest Winners: CTT, OMH, SGM, GXY, ORE, TLT, MNY and APE.
  • Biggest Losers: PDN, VGL, MYX, INR, NHC, OPT, Z1P and JMS.

TODAY

  • Bingo (BIN) -0.30% Macquarie reportedly near deal to take Bingo Industries private. Sources say an announcement is likely sometime this week.
  • Galaxy Resources (GXY) +6.09%Q1 production 46,588 dmt vs quarter-ago 33,344 dmt. In the March quarter shipped 29,917 dmt of spodumene concentrate averaging 5.9% Li2O. The free on board unit cash cost of lithium concentrate produced was $384/dmt, in line with full-year guidance. Expects full-year production of 185-200K @ concentrate grading 5.6-5.8% Li2O. Contracting arrangements for two shipments, 33kt in May and 15kt in June, are progressing well with final pricing to be well in excess of $600/dmt.
  • Orocobre (ORE) and Galaxy Resources (GXY) – Enter into $4bn merger of equals. The proposed merger would create an ASX lithium company with ~40ktpa production capacity and a top 5 lithium company globally. GXY shareholders to receive 0.569 new fully paid ordinary shares in Orocobre for each Galaxy share held.
  • Worley (WOR) -2.23% Awarded contract to provide brownfield solutions to Chevron Gulf of Mexico asset
  • Sims (SGM) +8.95% Expects full-year underlying EBIT between $260-310m vs consensus $163.1m. Higher volumes and margin improvement as well as cost savings named as reasons for the updated guidance.
  • Orocobre (ORE) +5.65% Q3 Olaroz production 3,232t, down 13% vs quarter ago.Sales revenue was +7% vs quarter ago to US$17.7m with the realised average price achieved up 54% to US$5,853/tonne on a free on board basis, helped by stronger lithium market conditions. Olaroz Stage 2 is expected to be completed in H1 CY22 and to commence production the following half. Production will ramp up over two years to full capacity of 25ktpa of primary grade lithium carbonate by H2 CY24. Naraha Lithium Hydroxide Plant construction has continued throughout the period and is now ~94% complete.
  • Medibank Private (MPL) – Appoints David Koczkar as CEO effective 17-May. Current CEO Craig Drummond, who is retiring, will remain with the business until 30-Jun to assist in the handover of responsibilities.
  • Infratil (IFT) -0.46% Gross proceeds from the sale of a 65.5% stake in TLT expected to be ~NZ$2.0bn vs NZ$1.93bn previously.
  • Tilt Renewables (TLT) +5.14% Announces increase in offer from PowAR and Mercury NZ to NZ810c/share vs previous NZ780c.
  • GPT Group (GPT) -3.12% Expects to deliver FY21 funds from operations growth of 8% vs year ago.
  • Cooper Energy (COE) +5.36% Q3 production 0.77MMboe vs quarter-ago 0.53MMboe. Sales volume 0.82MMboe vs quarter-ago 0.53MMboe. Sales Revenue $35.9m vs quarter-ago $24.6m. Incurred capex $7.1m. Cash and cash equivalent $109.1m. FY21 production guidance maintained: Production 2.7 – 2.9 MMboe with sales volume production 2.9 – 3.1 MMboe.
  • Seven Group Holdings (SVW) – Launches US$500m placement and $50m share purchase plan at 2250c/share. The equity raising is being undertaken to reduce net debt from $2.6bn to $2.1bn, to facilitate the retirement of more costly facilities and restore balance sheet flexibility to support growth following the recent investment to acquire 22.98% of Boral. Industrials demand and activity are robust and we expect growth in this segment in FY21.
  • Home Consortium (HMC) -1.04% Reaffirms FY21 funds from operations guidance of no less than $35m (12.9 cps). Reaffirms FY21 dividend guidance of 12.0 cps.
  • HomeCo Daily Needs REIT (HDN) – To acquire seven large-format retail assets from Home Consortium for $266.4m. To launch $264m equity raising. The acquisitions are expected to deliver FFO accretion and reduced gearing.

ECONOMIC NEWS

CV19 NEWS

  • Japan is in the grip of another wave of CV19. Once again the Olympics are under threat, they have already been delayed a year, and 73% of those surveyed over the weekend said they were against the event being held as planned from July.
  • Global covid-19 cases hit a weekly record despite vaccine rollouts, topping 5.2 million worldwide.
  • Vaccine Tracker: 894m doses in 155 countries. 16.6m a day. In US 209m doses and 3.19m a day.

The path to immunity – it will take another 21 months to cover 75% of the population. At current rates 2.1 years in Australia to cover 75%.

BOND MARKETS

ASIAN NEWS

  • Japanese PM Suga visited Joe Biden at the White House on Friday, becoming the first foreign leader to hold an in-person meeting with the U.S. president since he took office.
  • Ant Group denies Reuters report that Jack Ma has considered selling his stake.

US AND EUROPEAN HEADLINES

  • Modest opening for Europe up slightly.
  • A driverless Tesla has crashed in Texas killing its passengers.
  • Indian recovery threatened with CV19 wave taking hold.
  • A dozen top European clubs sign up to the new Super League.
  • UK scientists assessing whether new variants are spreading in the community.
  • Households have amassed a huge cash pile equivalent to 6% of the global output since pandemic began. All up a US$5.4 trillion pile.

And finally…..

The wife said she was mad about my obsession for the band the Monkees. I didn’t believe her but then I saw her face.

Clarence

XXXX