Monday 17th May – Australian Market Wrap | Beeks Downunder-Because not all financial news is boring!

ASX 200 limped to a 9 point rise to 7024 (0.13%) in a quiet start to the week. A positive lead-in from the US and slightly higher iron ore prices saved the resource sector but lost traction into the close with BHP only up 0.1%, FMG up 1.4% and RIO up 0.5%. Gold miners in demand with NCM leading up 2.6% and NST putting in 6.5%. DEG bounced back 8.8% out of the steep decline Friday. Other resource stocks also doing well, S32 firmed 1.0%, MIN up 0.7% and SYR up 2.0%. Banks drifted off with three out of four in the red, CBA eked out another 1.2% gain whilst the other three slid with the Big Bank Basket up to $176.48. MQG went ex-dividend, but some negative press in NXL saw them catch its disease falling 4.9% and NXL down 9.5% despite a statement from the company. Healthcare mixed CSL off 0.4% but FPH up 2.1%, Industrials generally were firm, ALL upgraded the outlook rising 4.2% and SYD up 1.2% and TCL rose 0.7% on 10-year yields down to 1.75%. Telcos slipped as TLS dropped 0.6% and TPG continued lower by 1.7%. Tech stocks were mixed, APT continues to suffer slightly, Z1P rose 2.8% and XRO up 5.6%. The All–Tech index rose 0.4%. In corporate news, CWN asked for more details from SGR and dismissed the BlackRock takeover approach. CWN improved 0.8% and SGR up 1.0%. Nothing on the economic front with Asian markets mixed with Japan down 0.24% and China up 0.62%. Dow futures down 80 points.

Today’s Highlights

ASX 200 up 9 to 7024. Soft close
High 7066 Low 7024. Narrow range
Iron ore and copper rebound slightly.
Big Bank Basket better at $176.48
All Tech Index up 0.4%
Dow futures down 80
Australian Gold rallies to $2392
10-year yield down to 1.75%
AUD rises to 77.58c
Bitcoin falls to US$42932
Asian markets mixed with Japan down 0.24% and China up 0.62%

FUTURES AND HIGHS AND LOWS

END OF DAY PODCAST – The ASX 200 limped into the close up a mere 9 points at 7024 on its low for the day. MQG ex-dividend hit by NXL issues too with NXL falling 9.5% on media articles. Our two refiners got a lift from government plans to put $2bn into the sector, ALD and VEA up around 6% or more. CWN has asked for more details from SGR and knocked back BlackStone. Gold miners were the standouts today as iron ore rebounded slightly in Asia. NCM up 2.6% and DEG up nearly 9% with FMG up 1.4% the best of the ore miners. CBA saved the banks from blushes today up 1.2%.

STOCKS

NXL –9.51% Response to Fairfax media articles.
POD +21.82% doing well again.
ADT +6.41% polymetallic metal play.
ALG +7.88% Main Event in US update.
CPH -14.29% awarded craft designation with OCS.
AKP -5.05% decent volume for a change.
CAR -10.40% ex entitlement and capital raise.
MQG -4.89% ex dividend and press article.
A2M -3.25% sell off continues.
ELD -3.43% AGM chairman’s comments. Increases dividend.
ADO +10.00% manufacturing agreement with Operon.
DEG +8.78% solid bounce.
ALD +6.09% VEA +7.04% govt support for refinery package.
DW8 +9.52% finding its feet again.
NEA -2.87% ASX price query.
CWN +0.84% asks for more info.
IPL -1.66% profit drops in CV19.
INF -65.26% local Junta pulls licence.
BWX +4.79% embraces vegan platform.
EML – trading halt. Notified significant regulatory concerns by the Central Bank of Ireland
Speculative Stock of the Day: Mindax (MDX) +132.43% again. Punters special but good volume considering.
Biggest Winners: BGL, ADO, DEG, NVX, BET, TLX and RSG.
Biggest Losers: CAR, NXL, OMH, GNE, MQG, MND and GRR.

TODAY

BWX (BWX) +4.79% To acquire Flora & Fauna for $27.9-30.8m.Acquisition to be EPS accretive in FY22, and strongly EPS accretive by FY24 with the realisation of anticipated synergies. Net sales for Flora & Fauna were $12m in FY20 and are forecast to be in the range of between $16.4-$17.1m for FY21.
Ardent Leisure Group (ALG) +7.88% Update for Main Event segment; March and April EBITDA ex-items US$23.7m vs FY19 US$13.2m.Of the 44 centres operating across 16 states, 42 have reopened with the 2 remaining locations to open in May/June.
Ampol (ALD) +6.09% Intends to continue refining operations at Lytton subject to government support package being legislated.
Aristocrat Leisure (ALL) +4.23% Unaudited H1 normalised NPATA $412m, up 12% vs year ago. Normalised EBITDA $750m, up 6% vs year ago. Management comments: “We expect economic conditions across key markets over the full year to remain uncertain, as a result of ongoing COVID-driven volatility. We are closely monitoring key factors including consumer sentiment, gaming venue patronage and currency headwinds.
Pengana Capital Group (PCG) –2.89% Funds under management $3.77bn vs month-ago $3.71bn.
Suncorp Group (SUN) -0.39% Q3 home lending up $102m vs quarter ago. Total impairment losses for quarter $1m.Business lending contracted $16m or (0.1%), due to a reduction in the commercial loan portfolio partially offset by growth in agribusiness lending. Household deposits grew broadly in line with system during the quarter with growth in at-call deposits offset by a strategic reduction in the higher-cost term portfolio. Gross impaired assets increased $20m over the quarter to $205m or 36 bps of gross loans and advances (GLA), mainly due to the impairment of a single commercial borrower group in the hospitality industry. Suncorp’s capital levels remain sound, with a risk-weighted Common Equity Tier 1 ratio of 9.79% (December 2020: 10.05%), above the bank’s target operating range of 9-9.50%.
Home Consortium (HMC) +2.42% Acquires $133.2m of properties for HealthCo, disposes of non-core asset, reaffirms FY guidance. On track to establish HealthCo in 1H FY22 and to raise $1.0bn of equity. Sale of $28.4m non-core large format retail asset in Morayfield, QLD at 3.5% premium to book value. Reaffirms FY guidance: funds from operations of no less than $35m ($0.129/security). Distribution of $0.12.
Incitec Pivot (IPL) -1.66% H1 statutory profit $36.4m vs year-ago $64.6m. Revenue $1.72bn vs year-ago $1.85bn and consensus $1.83bn. EBIT $110.2m vs year-ago $159.2m and consensus $156.0m. Interim dividend of 1cps, fully franked. Outlook: Stronger than normal weighting to 2H earnings and cash flow expected.
Elders (ELD) -3.43% H1 underlying profit $67.0m vs consensus $63.3m. Revenue $1.10bn vs consensus $1.04bn. Underlying EBIT $73.8m vs consensus $67.7m. Interim dividend 20.0c/share, 20% franked. Following ongoing favourable rainfall events, a positive outlook for the winter crop is forecast. Cattle prices are expected to remain strong, although below the record highs seen recently. Demand for farmland real estate is expected to continue to be fuelled by a favourable commodity price outlook, low-interest rates and good seasonal conditions. Costs are expected to increase in H2 in line with footprint growth, continued investment in Elders’ Eight Point Plan strategies, and the first phase of the Systems Modernisation Program.
Nuix (NXL) -9.51% Responds to media articles regarding the company’s performance, says its performance and market position are strong, and remains confident of its long-term prospects. Adds forecasts at the time of its IPO and subsequent updates have been thoroughly explained in the company’s market disclosures, including Nuix’s IPO Prospectus and recent trading updates highlighting post-IPO changes in customer preferences and shifts in industry conditions. As mentioned in the ASX release dated 21 April, the number of new customers and total order value for the nine months ended 31-Mar-21 is higher than the previous comparable period.

ECONOMIC NEWS

CV19 NEWS

Vaccine Tracker: 1.45bn doses in 176 countries. 23.7m a day. In US 274m dosesat 1.98m a day.
India on Monday reported 281,386 new coronavirus infections over the past 24 hours, while deaths rose by 4106.
In Australia, more than 3.11m doses have been administered around the country so far in the rollout, including 436,000 doses last week. So far 17.58m tests have been conducted around the country.
it took 47 days for Australia to get to 1m doses, a further 19 days to get to 2m and a further 17 days to get to 3m.

BOND MARKETS

ASIAN NEWS

China’s factory output growth slowed in April indicating more pressure on the recovery in consumption. Industrial production grew 9.8% in April from a year ago, slower than the 14.1% surge in March.
Retail sales rose 17.7% year-on-year in April, much weaker than a 24.9% uptick expected by analysts and down from the jump of 34.2% seen in March.
Chinese crude steel output in April rose to 97.9m tons to hit monthly and daily run-rate records.
China is vaccinating nearly 14m people a day.

US AND EUROPEAN HEADLINES