ASX 200 fought back from early losses to close down 12 points (-0.17%) at 7034. Dow futures up 82 points. Another lacklustre day with quarterly reports and M&A activity driving stock movements. Banks were mixed with the Big Bank Basket at $169.88. Insurers fell slightly led by QBE down 1.6%. Big miners pushed ahead on stronger iron ore and base metal prices. BHP up 1.1% and FMG up 1.1% with a positive trading update from BSL adding 0.5%. Gold miners flat with energy stocks a little higher, STO down 0.7% and WPL up 0.6%. Healthcare stocks slipped, CSL down 1.2% and COH down 0.6%. Industrials sift but no real damage, TCL down 1.7%, WOW off 0.5% and TPG continuing to collapse down %. Tech under pressure with BNPL on the nose, APT down 5.5%, Z1P down 6.3% and SZL down 2.1%. Other techs also falling XRO down 2.2% and NXT down 1.5%. The All–Tech Index fell again down 1.6%. In corporate news, TAH up 4.2% as Ladbrokes ups offer to $3.5bn. BIN adding 6.2% agreed to a takeover from Macquarie Infrastructure & Real Assets (MIRA). CWN up 0.2%, granted three interim liquor licences at its Barangaroo site. BSL adding 0.5% upgrades full-year EBIT guidance. BET rising 0.4% on its quarterly update. NIC fell badly after a disappointing quarterly, dropping 12.1%. In economic news, Weekly consumer confidence down 0.1% to 114.0. AUD brushing up against 78c. Asian markets ease with Japan down 0.76% and China down 0.08%. 

Today’s Highlights

  • ASX 200 down 12 to 7034. Below average volume
  • High 7053 Low 7006. Narrow range drifting
  • Flights from India paused until May 15th
  • Big Bank Basket up to $169.88
  • All Tech Index down 1.6%
  • Dow futures up 70
  • Australian Gold falls to $2284.
  • 10-year yield unchanged at 1.73%
  • AUD pushes ahead to 77.94c
  • Bitcoin higher at US$53786
  • Asian markets ease with Japan down 0.76% and China down 0.08%

END OF DAY PODCAST – ASX 200 fell 12 to 7034 in narrow range trading. Once again quarterlies and M&A activity dominated. TAH saw another bid from Ladbrokes for its wagering business and BIN up 6% on an agreed scheme with Macquarie’ MIRA. Banks flat with big iron ore miners continuing to bubble higher as tech stocks came under some pressure. BNPL especially soft as APT dropped 5.5% and Z1P down 6.3%. European futures pointing to a solid opening as HSBC, UBS and BP report better numbers.

STOCKS

  • BIN +6.2% MIRA Takeover.
  • 360 +13.00% acquisition of Jiobit.
  • VUL +8.14% acquisition
  • TPW +5.19% solid bounce.
  • NIC -12.06% disappointing quarterly.
  • HMC +5.39% just keeps on going higher.
  • AKP -12.85% no volume no revenue still.
  • Z1P -6.31% BNPL on the nose.
  • ALG -13.78% hit hard today. Big volume.
  • PAR -5.44% broker downgrades.
  • TLG -9.01% reverses yesterday’s rise.
  • MCP -0.35% Geminder declares 134c final unless no one else bids.
  • BCK -13.92% more profit taking.
  • CCR -5.67% sell off in thin trade.
  • GRR -0.83% iron ore pellet prices.
  • TAH +4.17% being ‘Ladbroked’. Mark happy.
  • ZNO +19.21% CV19 outbreak brings at least one winner.
  • NOX -7.14% quarterly.
  • RXM +15.25% copper exposure.
  • IPO of the Day: PWR +19.31% new car seller lists.
  • Speculative Stock of the Day: Not much around on any volumes. QPM +28.57% on appointment of Jim Simpson as a Non-Executive director. Biggest spec loser NIC 32m shares trade.
  • Biggest Winners: 360, UNI, VULK, PLL, BIN, HMC, TPW and UMG.
  • Biggest Losers: BCK, AKP, NIC, TLG, MSB, Z1P and PYC

TODAY

  • Dexus (DXS) -1.09% Wholesale Property Fund merger with AMP Capital Diversified Property Fund expected to be approved by unitholders.
  • Cleanaway (CWY) -0.38% Provides update on proposed acquisition of portfolio of strategic post-collection assets in Sydney from Suez for $501m. The agreement with Suez to acquire all of Suez’s Australian recycling and recovery business has now formally been terminated, and Cleanaway has exercised its right to proceed with the binding Sydney Assets Acquisition agreement. Completion of the Sydney Assets Acquisition is expected to occur shortly before completion of the takeover of Suez by Veolia; based on the current timeline Cleanaway expects this will be in Q2 of CY22.
  • Reliance Worldwide Corp. (RWC) +0.82% Reports Q3 consolidated net sales $359.4m, +14% vs year-ago. Q3 trading update: Q3 net sales (constant currency) – Americas +39% vs year-ago, APAC +11% vs year-ago, EMEA +13% vs year-ago. Outlook: Sales to date in April are substantially ahead of the same period last year, with pcp sales having been adversely impacted by COVID. RWC is continuing to implement price rises for products which have seen sustained input cost increases, particularly brass products which have been impacted by higher copper and zinc costs.
  • Life360 (360) +13.00% Proposes acquisition of Jiobit for US$37m plus earnouts. Strategic review: The company will continue to evaluate both strategic and financial opportunities that will accelerate progress towards vision of being the dominant platform for a much broader suite of family services. This includes larger acquisitions that could be funded with vehicles that would simultaneously result in a dual listing on a US exchange, with a focus on companies in the insurance vertical.
  • Telix Pharmaceuticals (TLX) -1.84% Completes strategic manufacturing agreement with Global Medical Solutions.
  • OM Holdings (OMH) -4.17% Receive approval from Bursa Malaysia Securities Berhad for proposed secondary listing on Main Market of Bursa Malaysia.
  • South32 (S32) +0.70% Reports Q3 production; Alumina production 1,218kt vs quarter-ago 1,401kt. Q3 production: Aluminium production 240kt vs quarter-ago 248kt. Energy coal production 4,020kt vs quarter-ago 5,306kt. Corporate update: To 31-Mar-21 the capital management program was 90% complete with US$169m remaining to be returned to shareholders ahead of its extension or expiry on 3-Sep-21. Net cash balance increased by US$242m during the quarter to US$517m at 31-Mar-21. Guidance update: Capital expenditure guidance of US$515m (including EAI) is unchanged. Increased FY21 production guidance at South Africa Manganese by 10% as we continue to respond to market conditions. Increased FY21 production guidance at Cannington by a further 10% with continued strong underground performance supporting the accelerated extraction of a higher-grade mining sequence.
  • Bluescope Steel (BSL) +0.50% Guides H2 EBIT $1.0-1.08bn vs prior guidance $750-830m. Largest change to the expected result is from North Star in the US. Australian Steel Products is also benefitting from improved realised domestic and export steel spreads. Building Products segment is now expected to deliver an improved result over 1H FY2021 earnings.
  • Bingo Industries (BIN) +6.25% Enters into scheme implementation deed with MIRA worth $3.45/share. BINGO shareholders will have the option to receive either $3.45 cash per Bingo share or $1.32 in cash and the remainder in unlisted scrip and a potential earn-out dividend of up to $0.80. Board intends to declare a fully franked special dividend of up to $0.117/share prior to implementation of the scheme. Board unanimously recommends the scheme. Scheme is subject to certain conditions which must be satisfied or waived before the scheme can be implemented.
  • Viva Energy Group (VEA) +1.1% Provides Q1 market update; making strong progress on business recovery program with encouraging Q1 results in all parts of business. Q1 market update: Total Group refinery sales 3,030 -17% vs year-ago. Commentary: Retail business is performing well, with the Alliance reaching above 60M litres per week in March; and together with network additions in other channels, the group delivered an overall strong sales performance despite continued impacts from lockdowns and flooding in some markets earlier in the year. Growth in non-aviation commercial sectors has also contributed to strong diesel sales, and are beginning to see recovery in domestic aviation sales as domestic travel resumes. Refining remains challenging, but production is strong, and are continuing discussions with the Federal Government on the long-term Fuel Security Package.Making good progress on the transformation of site at Geelong into a broader energy hub, and continue to pursue the Gas Terminal Project.
  • Betmakers Technology Group (BET) +0.40% Reports Q3 net cash from / (used in) operating activities -$424K – Appendix 4C. March quarter: Receipts from customers $5.2m Cash and cash equivalents $125.8m. Sportech acquisition completion expected in Q4.
  • Atlas Arteria Group (ALX) -3.10% SCC releases ruling on toll increases at Atlas Arteria’s Dulles Greenway; weighted average toll increase of +3.4%/yr over 2021-2022. Off-peak toll increases approved for +5.3% in 2021 and +5.0% in 2022. No increases approved for peak tolls vs submission of +6.0% in 2021 and +6.5% in 2022.
  • Nickel Mines (NIC) -12.06% Reports RKEF Q1 production of 10,067.5t of nickel metal -12.7% on the quarter. March quarter: Sales US$138.2m vs quarter-ago US$158.8m. EBITDA US$50.7m vs quarter-ago US$71.6m. Cash costs: Hengjaya $8,725/t, +14.6% vs last quarter, Ranger $8,641/t, +16.1% vs last quarter. Cash and cash equivalents US$129.5m.

ECONOMIC NEWS

  • Weekly consumer confidence down 0.1% to 114.0. 35.4% higher than a year ago. Economist David Plank had this to say, “a drop of unemployment rate to 5.6% and underemployment below 8%, didn’t provide the boost to sentiment we might have expected. Confidence did, however, remain above its long-run average, and perhaps the good news on employment offset any fallout from the vaccine disappointment.

CV19 NEWS

  • US says it will send 60m doses to India. US mass vaccination campaign begining to fade.
  • The Philippines’ Covid-19 case count breached 1m on Monday.
  • Turkish President Erdogan imposed an almost 3-week lockdown starting Thursday.
  • Vaccine Tracker: 1.04bn doses across 172 countries. 19.2m a day. In US, 231m doses at 2.74m a day.

BOND MARKETS

ASIAN NEWS

  • HSBC Adjusted pre-tax profit rose to US$6.4bn in the three months through March, beating a consensus estimate of US$4.3bn.
  • Singapore is now the safest place to be during CV19. Displaces NZ from top spot on vaccine rollout.
  • The Bank of Japan left its main policy levers unchanged.
  •  A new forecast for fiscal 2023 also confirmed that Governor Haruhiko Kuroda will fail to reach his goal of stable 2% price growth during his current term.

US AND EUROPEAN HEADLINES

  • UBS Q1 Pre-tax profit up 14% Y/Y to US$2.3bn. Pre-tax profit up 79%.US$434m hit from Archegos. well ahead of forecasts.
  • European futures show strong open.
  • Tesla results disappoint. Elon sells US$101m of bitcoin. Margins slip and supply chain under pressure. Chip shortage bites.
  • Standard Life Aberdeen have rebranded to ‘Abrdn’. Yup really.  Just ignore vowels and be a ‘hipster’ company.
  • Thomas Bravo agrees US$12.3bn deal to buy cyber security company Proofpoint.
  • Maersk upgrades guidance. Container costs are up 35%. 
  • BP Q1 profit US$4.7bn. Net debt reduced to US$33.3bn. Strong results. Buybacks back.
  • JP Morgan to launch an actively managed bitcoin fund.

And finally…

Clarence

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