Tuesday 20th April – Australian Market Wrap | Beeks Downunder-Because not all financial news is boring!

ASX 200 dropped 48 points to 7018 as a stronger dollar and higher bond yields took their toll. Dow futures up 85 points. Across the board losses as banks flopped with the Big Bank Basket down to $168.14 after CGF fell hard, down 15.8%, on misreading credit spreads and paying too much for annuity income. MQG slipped slightly but insurers stayed firmish. In big miners, the iron ore price failed to move the dial for BHP down 0.2% and RIO off 0.5% after a quarterly production report. FMG better with a 1.9% gain. Gold miners were slightly lower as NCM fell 0.2% and NST down 0.8%. RSG dropped 2.8% after the Chinese pulled the pin on buying Bibiani. Energy stocks felt little love, STO off 0.6% and WPL down 1.2%. Tech stocks were led lower after a business update from APT failed to inspire, the stock dropped 0.8% with Z1P flat and XRO dropped 1.4% with the All –Tech Index down 0.9%. In corporate news, quarterlies coming thick and fast today, Latitude Financial (LFS) +3.85% debuted with a solid first day. WSA rose 2.7% on it squarely and LYC disappointed with lower production and shipping issue weighing down 8.3%. WOW down 0.9%, lifted its holding in data analytics firm Quantium from 47% to 75% for $223m. SVW off 4.4% completes $500m institutional placement. On the economic front, ANZ-Roy Morgan weekly consumer sentiment fell slightly, down 0.1% to 114.0. RBA minutes uneventful, as expected. 10-year yields rose to 1.77% and the AUD is close to breaking through 78c. Asian markets mixed as Japan down 1.9% and China up 0.6%.

Today’s Highlights

ASX 200 down 48 points to 7018. Quiet day.
High 7067 Low 7009
Big Bank Basket lower at $168.14.
All Tech Index down 0.9%
European futures pointing to modest gains.
Dow futures up 81.
Australian Gold down to $2273.
10-year yield rallies to 1.77%.
AUD pushes hard to 77.94c.
Bitcoin falls back to US$55042.
Asian markets mixed as Japan down 1.9% and China up 0.6%.

STOCKS

CCL +0.08% last day today.
MIN +3.02% Macquarie sees upside.
RSG -2.80% Chifeng Jilong gold terminates deal.
BOQ +2.69% amends figures.
EML +0.73% says GPR is a driver. General Purpose Reloadable cards.
PRL +29.73% delayed reaction to MOU.
WSA +2.69% production report.
DEG +4.31% drill results.
CRN -7.74% quarterly report
CGF -15.76% stuffs up credit spreads.
LYC -8.31% production falls slightly.
SVW -4.40% successful capital raising.
EX1 -11.96% capital raising.
MNS -6.49% profit taking continues.
HM1 +4.00% bargain hunting and Appendix 2A.
IPO of the Day Latitude Financial (LFS) +3.85% Third time lucky for Ahmed Fahour.
Speculative Stock of the Day: QEM (QEM) +28.57% appoints Siecap for Green Hydrogen Development.
Biggest Winners: ADO, OMH, PYC, ADH, PWH and DEG.
Biggest Losers: CGF, LYC, CRN, UNI, ALU, CEN and IMU.

TODAY

CSL (CSL) -1.62% Terumo Blood and Cell Technologies, CSL plasma to collaborate to deliver new plasma collection platform.
Lynas Rare Earths (LYC) -8.31% Reports Q3 NdPr production 1,359t vs quarter-ago 1,367t. Reports Q3: Total Rare Earths Oxides production 4,463t vs quarter-ago 3,410t. Sales revenue $110m vs quarter-ago $119.4m. Average selling price $35.5/kg vs quarter-ago $29.5/kg. Sales receipts $133m vs quarter-ago $68m.
Temple & Webster Group (TPW) +1.49% Provides Q3 trading update; revenue +112% vs year-ago. Q3 Trading Update: Active customers reached ~750k at the end of Q3. April 2021 Revenue up more than +20% vs year-ago. Temple & Webster believes this trading suggests COVID-19 has permanently accelerated online adoption in the Australian furniture and homewares market. Temple & Webster is reaffirming its growth strategy given its online market leadership position, strong balance sheet and scope for significant online market growth and longer-term returns. During this scale up phase, the company will be focused on revenue growth and further expanding its market leadership. Longer term, the company expects higher levels of profitability than have been previously demonstrated due to greater scale benefits.
Senex Energy (SXY) +0.31% Q3 revenue $33.2m vs year-ago $22.0m. Total production (PJ) 4.6 vs year-ago 2.1. Total sales volumes (PJ) 4.8 vs year-ago 2.4. Average realized gas price ($/GJ) 6.8 vs year-ago 8.2. Capital expenditure $7.9m vs year-ago $39.7m. Outlook: Roma North expansion to 24 TJ/day (~9PJ/year) expected to come online in Q1 FY22. New gas sales agreements were secured, including with CleanCo Queensland for 2.55 PJ in 2022. FEED activities progressed for the expansion of Senex’s Surat Basin natural gas production to 96 TJ/day (35 PJ/year), with an end-FY25 production target of more than 60 PJ/year.
Rio Tinto (RIO) -0.54% Q1 Pilbara Iron ore shipments (100% basis) 77.8Mt, down 12% vs quarter ago. Chief Executive Jakob Stausholm, said: “We achieved an overall solid operating performance in the first quarter. We have maintained guidance ranges in all our products, with site teams successfully managing the effects of significant rainfall, in particular at our Australian iron ore assets.
Perseus Mining (PRU) -1.50% Q3 gold production 88,458oz at AISC US$999/oz. Q3 gold sales 87,215oz at average sale price of US$1,544/oz. Gold production 88,458oz at AISC US$999/oz. Net cash position of US$6M at quarter end. FY21 forecast: Gold production 312-3270Koz at an AISC of US$970-1,067/oz.
Sydney Airport (SYD) -1.63% March traffic down 42.6% vs year ago. Domestic down 15.1% to 1,120,000 passengers. International down 95.2% to 33,000 passengers.
Amcor (AMC) -0.33% Announce strategic investment of ~$10-15M in ePac Flexible Packaging.
Coronado Global Resources (CRN) – 7.74%Reports Q1 ROM production 6.8Mt, +0.9% vs pcp. Reports Q1: Saleable production 4.6Mt, +2.5% vs quarter-ago. Sales volumes 4.4Mt, (10.5%) vs quarter-ago. Revenue US$376m, +1% vs quarter-ago. Mining cost $62.2/tonne. Capex US$22.6m. FY guidance: Costs are expected to be within market guidance of US$57.0 – 59.0/tonne.
Gold Road Resources (GOR) -1.15% Reports Q1 gold production of 66,213oz at AISC $1,386/oz. Q1 production: Gold production of 66,213oz vs quarter-ago 70,794oz. Ore tonnes processed totalled 2.1 Mt at a head grade of 1.12 g/t Au and a gold recovery of 91.2%. Gold in circuit increased by 3,127 oz during the quarter. Gold sales 32,100 oz at $1,810/oz. Free cash flow $15.1m. Cash and cash equivalents $149.8m. Outlook: Well positioned to improve on plant utilisation and throughput in line with 2021 guidance (130,000-150,000 oz attributable) and the 3-year outlook that sees production lifting to a sustainable ~350,000 oz per annum by 2023.’
HUB24 (HUB) –2.64% Funds under administration $51.39bn at the end of March vs $31.29bn at the end of December. Q3 net inflows of $1.9bn, +41% on pcp. Development of the private label investment and superannuation offer for IOOF is progressing well and is expected to be launched in the last quarter of FY21. The ClearView Wealth Limited bulk transition (expected to be ~$1.3bn) to the HUB24 platform remains on track for completion in the last quarter of FY21, additionally new inflows are continuing into the previously launched ClearView white label.
Afterpay (APT) -0.77% Q3 underlying sales $5.2bn vs year-ago $2.6bn. Quarterly performance on a constant currency basis was +123% higher than Q3 FY20. Merchant revenue margins remained firm and continued in line with what was achieved in the six months to December 20. Net transaction losses as a percentage of underlying sales likewise remained low for the quarter. Active merchants 85.8K, +77% vs year ago. Active customers 14.6M, +75% vs year ago. Exploring options for a potential US Listing given the US market is now the largest contributor to the business and is expected to continue to grow strongly.
Bapcor (BAP) – FY21 trading update through March. Business performance has continued at similar levels to the first six months of the year. Trade same-store sales (SSS) up +13%. New Zealand SSS up +4%. Autobarn SSS up +35% (Company-owned stores SSS +45%). Specialist wholesale revenue +31% (ex-acquisitions +17%). Market consensus for FY21 NPAT $122-128m. Management comment: Significant opportunities remain within the business to drive operational and financial performance.
AMP (AMP) +1.69% Ares Management expected to press ahead with cash offer for all of AMP’s private markets unit. A bid price for the division would take into account any deterioration in income since negotiations to buy the division began earlier this year.
Challenger (CGF) -15.76% Reports Q3 total life annuity sales $1.57bn vs quarter-ago $958m. Reports Q3: Life annuity flows $879m vs quarter-ago $58m. Life investment assets up +6% vs quarter-ago. Funds Management net inflows +$7.03bn. Total AUM $104.16bn, +9% vs quarter-ago. Adjusts FY guidance: Normalised PBT at bottom of prior guidance range of $390-440. vs consensus $434.3m.
Stockland (SGP) -2.38% Q3 trading update: Communities: Residential settlements of 1,510 lots, supporting a full year target of around 6,300 lots. 1,891 net sales and 4,739 contracts on hand give visibility to strong FY22 Residential settlement volumes. Retirement Living established sales of 190 units, +16.5% vs pcp. Commercial Property: Comparable total retail sales growth of 3.2%. Specialty sales growth of 9.4%. Retail rent collection for the financial year to 14-Apr-21, has risen to 94% of billings, net of abatements. $5.9bn development pipeline is progressing to plan in the Workplace and Logistics portfolios. Confirms FY21 outlook: FFO $0.325-$0.331 vs consensus $0.33, is currently trending towards the top end of the range. DPS at the lower end of target payout ratio of 75% to 85% of FFO.
Western Areas (WSA) +2.69% Confirms Q3 nickel production of 4,236t; unit cash cost of nickel concentrate $4.07/lb, -13% vs pcp. Q3 production: Mill production of 4,267t in concentrate, +21% vs quarter-ago, following a lift in average feed grade and mill recoveries. Nickel sales of 3,962t in concentrate +19% vs quarter-ago. Cash plus nickel sales receivables of $168.6m. Confirms FY21 guidance: Nickel tonnes in Concentrate Production 16-17Kt. Unit Cash Cost of Production (Nickel in Concentrate) A$3.75-4.25/Ib. Mine Development $25-30m. Capital & Growth $7-10m. Cosmos & Odysseus Development $90-110m. Exploration $14-17m.
Woolworths Group (WOW) -0.90% Increases stake in Quantium to 75% from 47% for a purchase price of $223m. Transaction details: Following completion of the transaction, Quantium will form part of Woolworths Group, and a new business unit called Q-Retail will be established. Q-Retail will bring together Quantium and Woolworths Group’s collective data science and advanced analytics capabilities with a focus on delivering against Woolworths Group’s advanced analytics aspirations. Quantium founders and team members retaining 25%. The transaction is expected to complete prior to the end of FY21.

ECONOMIC NEWS

ANZ- Roy Morgan – Consumer confidence remained practically unchanged at 114. 35.4% higher than a year ago.

RBA minutes

$95bn had been drawn from its lending facility that provides cheap funding to banks and a further A$95bn was available until the end of June.

GDP in the March quarter was likely to have recovered further to around its pre-pandemic level, earlier than previously expected.
Growth in household consumption had moderated in the March quarter following strong growth in previous quarters.
Wage growth had slowed and more subdued than elsewhere, the goal of wages growth sustainably above 3% to return inflation to target remains a high hurdle.

National Australia Bank lifted its forecast for dwelling price increases to 14% for 2021

CV19 NEWS

Vaccine Tracker: 910m doses in 156 countries. 16.3m doses a day. In US 212m doses at 3.13m a day.

BOND MARKETS

ASIAN NEWS

China’s one-year loan prime rate remains at 3.85%, in line with consensus. The five-year rate remained at 4.65%.
One country should not set all the rules, China’s leader says. “International affairs should be conducted by way of negotiations and discussions, and the future destiny of the world should be decided by all countries,” Xi said at the Boao Forum on Asia.
U.S. President Joe Biden will host a virtual climate conference on Thursday and Friday with world leaders. Xi will participate in the event,
Shanghai motor show kicks off and EVs are the focus. Many new models from Chinese car companies and US and European.
Japan needs to consider scrapping the Tokyo Olympics and speeding up its vaccine rollout amid growing virus infections, according to former Finance Minister Jun Azum

US AND EUROPEAN HEADLINES