Wednesday 28th April -Australian Market Wrap

ASX 200 opened in a dither, but good CPI numbers boosted it, closing up 31 points to 7065. Dow Futures down 35. Banks jumped on low rates forever as CPI came in below economist’s guesses. The Big Bank Basket rallied hard to $173.32. MQG also joining in the fun up 1.3% with insurers following higher QBE up 3.5% and IAG higher by 2.7%. Industrials also doing well with WES up 1.1%, COL rising 1.5% after sales results and DMP pushing higher by 0.7%. Healthcare up too, CSL ahead by 1.0% with FPH rising 1.5% and RHC up 1.0%. Even tech got the memo today, APT rose 0.4% and KGN up 7.1% after an ASX query and more meat on the business update bones helped, the stock up %. The All–Tech Index rose 0.3%. Miners were the handbrake today, BHP fell 0.3% with FMG off 1.5% and gold miners back in the doghouse led by falls of 3.4% in NCM and NST off 5.2%. Energy stocks better as OPEC plus called off its meeting through lack of interest and will gently move production higher as the world recovers. India is the third largest consumer of oil so that is a concern. In corporate news, ART up 12.5% and ANN up 3.9% after upgrading FY21 expectations. A2M up 1.9% on takeover speculation. SBM losing 7.9% as production falls and costs rise. On the economic front, The Consumer Price Index rose just 0.6% in the March quarter and by 1.1% during the year. Far below analyst forecast and the lowest core inflation number on record. RBA’s job just got much easier. Trade surplus hits $8.4bn on commodity bonanza. 10 -year bonds steady at 1.72%. Asian markets mixed japan up 0.5% and China flat.

Today’s Highlights

ASX 200 up 31 to 7065. Below average volume again.
High 7077 Low 7029. Narrow range heading higher.
Core CPI comes in at record low.
Big Bank Basket up to $173.32
All Tech Index up 0.31%
Dow futures down 30.
Australian Gold steady at $2285.
10-year yield unchanged at 1.73%
AUD slips to 77.42c
Bitcoin higher at US$54644
Asian markets mixed japan up 0.5% and China flat

STOCK

ART +7.81% beats prospectus forecasts.
KGN +7.13% gives more detail in ASX speeding ticket.
STX +10.00% quarterly report
RMS -9.2% DEG -10.0% gold stocks fall.
LNK -6.25% plans for PEXA as consortium withdraws.
NIC -4.87% broker downgrades on quarterly yesterday.
MLX -6.38% quarterly.
TLG -3.83% sell off continues.
88E +35.00% updates draw buyers.
5GN +9.17% quarterly brings buyers back.
CXL +8.09% Appendix 2A.
LRT +3.03% holding in RTR and ZNC.
CXO +9.62% largest shareholder to double LiHO2 output.
HPG +11.61% quarterly cheers.
5GN +9.17% Quarterly report.
APX +3.30% upgraded to neutral by Macquarie.
WBC +1.24% settles Shine Justice class action.
INR -2.53%% secondary listing in US.
Speculative Stock of the Day: Rumble Resources (RTR) +23.64% raise $40m to fast track Earaheedy. See this mornings’ HT.
Biggest Winners: STX, ART, DOW, KGN, RMC, CWY and JLG.
Biggest Losers: DEG, RMS, SBM, AMI, WAF, PRU and LNK.

TODAY

Ansell (ANN) +3.89% Upgrades full-year EPS guidance to US$1.92-2.02 vs previous guidance US$1.60-1.70. Demand for PPE around the world remains elevated. Expect FY21 H2 year on year sales growth to be strong despite the solid performance of the prior comparable period and above 24.5% growth reported in FY21 H1 and above 24.5% growth reported in FY21 H1.
Coles Group (COL) +1.47% Reports Q3 sales $8.76bn vs year-ago $9.23bn, comparable 2-year growth +7.0%. Q3 Sales: Supermarkets $7.72bn vs year-ago $8.23bn, Liquor $759m vs year-ago $740m, Express $275m vs year-ago $256m. Outlook: At the end of Q3 and in the first few weeks of Q4, consumer behaviour has started to normalize. In the first four weeks of Q4, Supermarket sales, adjusted for ANZAC Day timing, increased by ~+4% while two-year growth increased by ~+8%. Expects both capital and operating expenditure investments in strategic initiatives to continue for the remainder of the year.
Suncorp Group (SUN) +0.77% To sell its Australian Wealth business, Suncorp Portfolio Services to LGIAsuper for $45m.
A2 Milk Company (A2M) +1.88% Media has reported on speculation that A2 Milk Co. could become takeover target.
Downer EDI (DOW) – Provides update in Investor Day presentation; Strong performance YTD for FY21 Earnings and cash performance. Trading update: Sale of remaining non-core assets (Mining Open Cut East and Hospitality). Sale process underway for Open Cut East with Information Memorandum for Hospitality currently in the market. FY22 – FY24 Business Planning (underway).
AGL Energy (AGL) -1.15% Chairman says that the planned demerger is on track in spite of CEO exit.
Sandfire Resources (SFR) +3.80% Q3 copper production 16,803t vs quarter-ago 16,390t. Gold production 9,100oz vs quarter-ago 9,660oz. C1 cash costs US$0.87/lb vs quarter-ago US$0.89/lb. Cash on hand $463.6m. FY 21 Guidance: expects production at the upper end of 67-70kt for copper and 36-40koz for gold. Sees C1 costs between US$0.80-0.85/lb, reduced from US$0.85-0.90/lb.
Ramelius Resources (RMS) -9.22% Q4 gold production guidance: 65K-70Koz at an all-in sustaining cost (AISC) between $1,240-1,340/oz.
JB Hi-Fi (JBH) –4.02% CEO Richard Murray has announced he will step down after a massive 18 years with the company, Good Guys CEO Terry Smart to be his replacement. Murray will replace Mark McInnes as the CEO of Premier Retail (PMV). There is talk the high bar set by JBH’s standout performance through covid is unlikely to be beaten in the foreseeable future. His resignation is likely to be viewed as a punctuation mark that the top has come. Last Friday its peer in Kogan displeased the market with its quarterly update, turning the conversation toward the post covid slump for pandemic beneficiaries. JBH Australia reported third-quarter sales growth of 10.4% down on FY20’s 11.6%. Adding that from mid-March it stated cycling elevated sales growth from last year. No guidance for the full year was provided.
Bellevue Gold (BGL) -1.06% Reports Q3 net cash from / (used in) operating activities -$1.1m – Appendix 5B. March quarter: Cash and cash equivalents $116.0m.
IGO Limited (IGO) +0.28% Reports Q3 underlying EBITDA $93m. Reports Q3: Group revenue and other income of $186m. Cash flow from Operations of $71m. Outlook: Nova nickel production in Q4 is expected to be at or above the top end of pro-rata guidance and the full year’s production is expected to be at the top end of guidance. Cash costs are expected to continue to benefit from favourable by-product credit pricing and cash costs for the full year are expected to be materially better than original guidance at $1.80 – $2.10/lb.
St. Barbara (SBM) –7.88% Reports Q3: Gold production 82,303oz at AISC $1,649 vs quarter-ago 89,670oz at AISC $1,517/oz. Gold sales 71,329oz vs quarter-ago 99,461oz. Operational cash contribution $41m vs quarter-ago $83m. Cash at bank $100m. FY guidance: Gold production 370-380Koz vs prior 370-410Koz, AISC $1,440-1,520/oz vs prior $1,360-1,510/oz, Exploration $30-35m, Sustaining capex $97-115m, Growth capex $34-45m vs prior $49-57m.
Link Administration Holdings (LNK) -6.25% PEP, Carlyle consortium withdraw takeover proposal for Link Administration Holdings; Link provides trading and PEXA updates. Trading update: FY financial performance and achievement of outcomes from the Global Transformation Program remain in line with expectations. PEXA update: Trade sale process and exploration of the viability of an IPO continue to progress positively. Link Group has received non-binding indications of interest significantly greater than the consortium proposal’s implied EV of A$1.95B for PEXA. Binding offers are expected during June 2021.
Premier Investments (PMV) +2.24% Appoints Richard Murray as CEO Premier Retail, effective 4-Oct. Outgoing Premier Retail CEO Mark McInnes will commence gardening leave following the completion of the 2021 FY trading period.
Airtasker (ART) +7.81% Q3 trading performed ahead of expectations, with costs below forecast. Metrics for Q3 FY21 are ahead of forecasts resulting in full-year FY21 gross marketplace volume (GMV) and Revenue tracking ahead of forecast. FY21 guidance: Sees GMV of $148-152m instead of the $143.7m prospectus forecast. Revenue expected between $25.5-26m from the prospectus forecast of $24.5m.

ECONOMIC NEWS

Australia’s trade surplus hit $8.4bn as overall metalliferous ores reached a record high in March of $16.4bn, with iron ore up 21%, copper ore up 62%, and coal exports increased $272m, or 9%, according to the Australian Bureau of Statistics. Exports to China leapt 17%or $1.9bn in March largely driven by huge iron ore volumes.

The Consumer Price Index (CPI) rose 0.6% this quarter.

Over the twelve months to the March 2021 quarter, the CPI rose 1.1%.
The most significant price rise was Automotive fuel (+8.7%).
The most significant price fall was Furniture (-3.0%).

Payroll jobs tracked by the Australian Bureau of Statistics fell 1.8 per cent in the two weeks to April 10

CV19 NEWS

Vaccine Tracker: 1.06bn doses in 172 countries. 19.7m a day. In US 232m doses at 2.72m a day. 200m in 100 days – mission accomplished.
Vietnam warns of new threat after first domestic outbreak.
Australia said it will give about 2,050 athletes and support staff bound for the Tokyo Olympics early priority access to Covid-19 vaccines.
BoJo spokesman says Boris never said ‘let it rip’.

BOND MARKETS

ASIAN NEWS

Samsung Group’s heirs will pay US$11bn in death duties in a DNPL plan.The duties and transfer of assets will take place over several years. The family of Lee Kun-hee revealed the size of the bill after the death of the former head of Samsung who had a debilitating heart attack in 2014 and died last year.
The inheritance bill levied on the Lees is one of the largest ever in the country and globally, equivalent to three to four times the Korean government’s total estate-tax revenue last year.
The HKSE has posted a record profit on increased trade and the IPO business this year.
No Gold Medal on an Olympic year for Japan. It has only given enough doses to cover 1.1% of its population, the lowest among the 37 members of the OECD, according to Bloomberg’s vaccine tracker.

Toyota car sales reach record highs – March sales up 44% year-on-year, bouncing back from pandemic.
China is set to report its first drop in population in 50 years.

US AND EUROPEAN HEADLINES

Flat start for European session. Deutsche Bank (Q1 profit EUR1bn) and Lloyds report today.
FOMC meeting finishes today.
UK Labour Party calls for inquiry into BoJo’s reno.
Iterable Inc a US start-up has sacked its CEO for taking acid at work.
JP Morgan calls staff back to office from July.

And finally….