ASX 200 stormed higher by 42 points to 70766 (0.7%) as commodity prices took off again. Volumes not great though. Big miners raced ahead as iron ore bounced, BHP up 1.8% and FMG up 2.0%. Gold is the news crypto it seems, and miners were in demand with NCM up 1.1%, DEG up 4.6% and NST up 2.0%. SBM failed to fire following guiding to higher costs and lower production as WA staff shortages are starting to bite. The stock cratered 9.0%. Base metal stocks were also in demand, OZL rose 6.4% and MIN up 3.4%. Energy stocks too in demand led by STO up 1.5% and WPL up 2.1%. Banks too in demand as MQG bounced back 2.3% and the Big Bank Basket hit $177.29. CBA stalled after pushing towards $100. Industrials did well, WOW up 0.6% and TLS rallying 1.2%. Healthcare was mixed with CSL the only positive up 0.2%. Tech somewhat overlooked, WTC down 0.7% and Z1P up 1.7% with XRO down 0.5%. NXL held an investor day, and the CEO donned a hairshirt, reaffirmed guidance and the stock rose 11.5%. The All -Tech Index flat. In corporate news, BBN unchanged on management changes. APT up 0.1% subsidiary AP Ventures to buy SME business merchants provider for ~$45m. S32 up 2.4% to increase its capital management program by $200m. On the economic front, consumer confidence increased 0.8% last week. ANZ economist David plank believed it was in part due to the federal budget. He added the absence of any additional COVID cases in Sydney also played an important role. RBA minutes as expected. The 10-year bond yield higher at 1.78%. In Asia, Japan up 2.3% and China down 0.2%
- ASX 200 up 42 to 7066. Low volume.
- High 7084 Low 7037. Narrow range.
- Resources rally hard. RBA Minutes as expected. Inflation temporary.
- Big Bank Basket better at $177.29.
- All Tech Index up 0.4%
- Dow futures up 114.
- Australian Gold rallies to $2401.
- 10-year yield up to 1.78%
- AUD rises to 77.89c
- Bitcoin rallies to US$45439
- In Asia, Japan up 2.3% and China down 0.2%
- NXL +11.46% investor day, reaffirms guidance.
- PPK +12.11% Deakin Uni breakthrough.
- PLL +8.28% confirmation of capital structure.
- PLS +7.91% finally a bounce.
- BET +6.38% still pushing higher.
- OZL +6.41% commodity prices.
- POD +26.87% just keeps on.
- LEX +15.56% solid day again.
- RHY +15.62% business update and broker report.
- AVH -10.28% burnt again.
- 4DS -3.03% selling resumes.
- ELO -5.91% operations update.
- AXE -3.50 % no quantum or solace.
- SBM -9.02% more trouble at mill.
- RBL -4.18% sounds like a pop.
- JHX -4.51% dividend outlook disappoints. Warns of inflation pressures.
- MND -6.38% WA job pressure and wages hurting.
- A2M -4.30% creamed again.
- MMM -5.79% failed to deliver.
- Speculative Stock of the Day: Helix Resources (HLX) +64.52% Volume of 212m shares. Capital raising to maintain aggressive copper drilling. Issued at 2.7c to insiders now 5.1c.
- Biggest Winners: PPK, CRN, NXL, PDN, PLL, SWM and PLS.
- Biggest Losers: SBM, MND, CNI, ADO, MMM, IFM, JHX and PWG.
- James Hardie Industries (JHX) –4.51% Full-year adjusted profit US$458m vs consensus US$450.9m. Revenue US$2.91bn vs US$2.91bn. Adjusted EBIT US$629m vs consensus US$625.8m. The company intends to resume its ordinary dividend policy in FY22, beginning with a H1 FY22 dividend to be declared in November 2021. FY22 Guidance: Sees adjusted profit between US$520-570m
- CBA (CBA) –0.03% CBA could emerge as part of the consortium bidding for PEXA. Newswiressuspect PEXA’s other owner Morgan Stanley Infrastructure Partners may also participate in the float. CBA already owns 16% of PEXA and holds a close relationship with KKR.
- Baby Bunting Group (BBN) -unchanged- Chairman Ian Cornell to retire, succeeded by Melanie Wilson.
- Afterpay (APT) +0.07% Subsidiary AP Ventures to buy SME business merchants provider for ~$45m. The article reports that AP Ventures raised $50m from investors including Alex Waislitz last year and purchased a 20% stake in Shanghai startup Happay for US$10m.
- Westpac (WBC) +0.51% TPG is understood to be losing interest in Westpac’s auto loans business as WBC is opting to retain almost all of the existing loans, which means, buyers for the most part, only have the right to generate new business. Reports calculate the valuation of the goodwill for the auto loans business is between $450-700m. Shortlisted bidders include Liberty Financial, Kohlberg Kravis Roberts, Cerberus, Angle Finance and Allied Credit as bids are due middle of next month in a Morgan Stanley run competition.
- South32 (S32) +2.36% To increase capital management program by US$200m. The US$200m increase in the capital management program leaves US$316m to be returned to shareholders by 3-Sep-21, initially by continuing the on-market share buy-back. The company also announced the intention to achieve a 50% reduction in Scope 1 and 2 operational emissions by FY35. Trading update: Production and operating unit costs tracking to plan at all operation
- Hansen Technologies (HSN) +0.76% Repeats FY21 outlook in Capital Markets Day presentation. FY21 Guidance: Revenue $316-326m (constant currency), EBITDA margin 37-39% (underlying). Long-term Financial Targets (FY25): Revenue $500m, EBITDA margin 32-35% (underlying) and dividends of 10c annual base, with any excess cash returned via special dividends (depending on aggregations).
- Newcrest Mining (NCM) +1.09% Sets goal of net zero carbon emissions by 2050.
- Nuix (NXL) +11.46% Publishes presentation for today’s investor meeting; repeats FY guidance. FY21 guidance: Revenue $180-185m, ACV $168-177m and EBITDA $64.6-66.6m.
- St. Barbara (SBM) –9.02% Downgrades gold production guidance, sees 330-360Koz vs prior guidance of 370-380Koz. Group AISC now expected between $1,547-1,695/oz vs prior guidance of $1,440-1,520/oz.
The Board reaffirmed the existing policy settings, namely:
- a target for the cash rate of 0.1%
- an interest rate of zero on Exchange Settlement balances held by financial institutions at the Bank.
- a target of around 0.1% for the yield on the 3-year Australian Government bond
- the expanded Term Funding Facility to support credit to businesses, particularly small and medium-sized businesses, with an interest rate on new drawings until 30 June 2021 of 0.1%
- the purchase of an additional $100 billion of government bonds at the same rate of $5bn per week following completion of the first bond purchase program of $100bn.
- The RBA reiterated that wages growth would need to be “sustainably above 3%, which was well above its current level.”
- Confidence increased 0.8% last week. ANZ economist David plank believed it was in part due to the federal budget. Added the absence of any additional COVID cases in Sydney also played an important role.
- Vaccine Tracker: 1.48bn jabs in 176 countries. 24.5m a day. In the US, 274m doses at 1.83m a day.
- In Australia, 62417 does a day. It will take another 19 months to cover 75% of population.
- Italy is set to phase out a national curfew, currently set at 10 p.m in Italy.
- Authorities have identified 2,323 cases of the Indian strain of coronavirus in the U.K. the Indian variant is now the dominant strain of the virus.
- Japan’s GDP shrankan annualized 5.1% from the prior quarter in the three months through March, ending a two-quarter streak of double-digit growth. Economists had forecast a 4.5% contraction.
- The Taiwan Stock Exchange Weighted Index jumped by as much as 5%, on course for its best day since March 2020.
US AND EUROPEAN HEADLINES
- Michael Burry of The Big Short fame is lock and loaded with Tesla Puts.
- Biden supports Middle East cease fire.
- Elon Musk is due a tweet on Bitcoin as his crown as world richest has slipped. Bernard Arnault is now world’s richest man. His net worth climbing by almost US$47 billion to US$161.2bn this year. AT&T’s Warner Media to join with Disney to become US132bn behemoth.
- Amazon in talks to buy MGM for US$9bn.
- Buffet dumps Wells Fargo and Chevron.