ASX 200 down 38 to 7465 – Super Thursday results

  • HIGH 7479 LOW 7429.Iron ore weighs.

MAJOR MOVERS:

Winners: RBL NWH CNU WSA DTL PPK CEN SXL

Losers: CDA SGM MIN BHP CRN FMG IGO

  • POSITIVE SECTORS: Healthcare Industrials Tech
  • NEGATIVE SECTORS: BHP/RIOResources Base metal Miners Banks.
  • BIG BANK BASKET: Down to $180.91
  • ALL -TECH INDEX: Up 0.9%% APT unchanged.
  • GOLD: Rallies to AUD $2475
  • BITCOIN: US$44320 Drifting lower.
  • AUD: Eases to 71.81.
  • 10-YEAR YIELD: Drops to 1.09%
  • ASIAN MARKETS: Tokyo down 1.39%, Hong Kong down 1.75%, China down 0.39%.
  • US FUTURES: Dow futures down 137. NASDAQ down 8.

ASX recovers to close only 38 points down at 7465. It was the best of time and the worst of times. Miners were savaged with the iron ore price adding to BHP woes and commodities generally under pressure. RIO dropped 5.7%, FMG down 6.2% and MIN falling 6.6%. The big Aussie may be regretting its transformation already falling 6.3% again. Industrials and results stole the show and tried valiantly to rescue the index but failed. BHP accounted for 28 index points alone. Banks held the line with the Big Bank Basket dropping to $180.91. CSL rose 3.2% after brokers pronounced judgement. Defensives rose led by WES up 1.7%, BXB up 1.4% and JHX gaining 2.0%. Reports dominated with RBL inflating by 19.0% after an early loss. WSA confirmed media reports that IGO was interested, running 13.0%. On the economic front, the unemployment rate decreased to 4.6%, better than market estimates of a flat reading. 2,200 jobs were added vs estimates of -43,000.

FUTURES AND HIGHS AND LOWS

STOCKS ON THE MOVE

  • RBL +18.95% rethink on results. Huge volume.
  • WSA +12.90% IGO showing interest.
  • DTL +12.30% record results as company said a while ago.
  • ASM +7.82% punters back in.
  • NWL +8.01% broker upgrades.
  • AKP +4.05% tiny volumes as usual.
  • CDA -8.28% going down again on results.
  • FMG -6.15% MIN -6.61% iron ore price drop.
  • JMS -5.26% manganese falls.
  • KAR -4.98% oil price falls.
  • BCI -15.69% iron ore casualty.
  • VMS +19.28% first shipment from Riley.
  • FZO +14.18% singing in the valleys on Welsh deal.
  • IOU +3.77% back with a BNPL bang on offering update.
  • TRS +16.67% results.
  • SXL +8.29% broker upgrades.
  • Speculative Stock of the Day: Whitehawk (WHK) +13.33% US cyber security contract renewed.

ANNOUNCEMENTS

  • HomeCo Daily Needs REIT (HDN) +1.03% Full-year funds from operations 4.1c vs consensus 4c.Revenue $45.2m vs consensus $34.4m. NTA $1.36/unit. Reaffirms FFO of 8.3c and distribution guidance of 8c for FY22.
  • Senex Energy (SXY) -0.98% Full-year underlying profit $5.4m vs consensus $9.3m. Revenue $109.6m vs consensus $115.1m. Underlying EBITDA $64.5m vs consensus $56.4m. Final dividend 5c. The final dividend, coupled with the interim dividend of 4c and the special dividend of 4c (re-based for share consolidation) takes total dividend payments for FY21 to 13c. In FY22 sees underlying EBITDA between $75-85m, production between 21-23 PJ (3.6 – 4.0 mmboe) and capex of $70-80m.
  • Treasury Wine Estates (TWE) -1.50% Full-year EBITS $510.3m vs company guidance $495-515m.Revenue $2.57bn vs consensus $2.50bn. Final dividend 13c, fully franked. In F22, TWE is positive on its outlook across key markets outside of Mainland China. COGS per case are expected to remain elevated in F22
  • IRESS (IRE) +0.27% First half profit $42.3m vs consensus $39.3m.Revenue $298.7m vs consensus $304.5m. EBITDA $79.0m vs consensus $71.5m. Interim dividend 16c/share (80% franked). Earnings in H2 are expected to accelerate. Guidance assumes 16-21% growth in segment profit compared to the first half result. FY21 guidance affirmed – segment profit growth, in constant currency of 7-10% vs pcp.
  • Beacon Lighting Group (BLX) +3.95% Full-year underlying profit $37.7m vs guidance of $35.5-37.5m.Revenue $288.7m vs year-ago $251.7m. EBITDA $86.0m vs year-ago $62.6m. Final dividend 4.60c/share, fully franked. Will continue to target growth both in Australia and in international markets. Considers itself very well placed in 2022 to take advantage of the working from home trend, increased housing churn, home office upgrades and move to more online shopping.
  • Star Entertainment Group (SGR) +6.78% Full-year normalised EBITDA $429.7m vs consensus $428m. Revenue $1.55bn vs consensus $1.58bn. No dividend. Early 1H FY2022 trading has been negatively impacted by property shutdowns and operating restrictions upon re-opening of the Queensland properties. The group has been pursuing a strategy of releasing capital from non-core or low-yielding assets and to re-invest the proceeds in higher growth and more productive areas. The Star sees potential to unlock value from property assets from a sale and leaseback or similar transaction. Formal process for the sale and leaseback (or similar transaction) of The Star Sydney property has been initiated.
  • Redbubble (RBL) +18.95% Reports Full-year net profit $31.2m vs consensus $39.7m. Gross transaction volume of $701m, +48% on the year, Marketplace revenue of $553m vs consensus $583.8m. EBITDA $53 vs consensus $58.9m. FY22 outlook:”Marketplace Revenue to be slightly above FY21 underlying Marketplace Revenue. Targeted investments will continue to be made and will affect gross margin, marketing and OPEX lines. EBITDA margin as a percent of marketplace revenue is expected to be in the mid single digit range for FY22.”
  • HT&E (HT1) +6.83% Reports First-half net profit attributable to shareholders of $14.5m vs year-ago $2.4m. Revenue $109.9m vs year-ago $93.0m, Underlying EBITDA $30.4m vs year-ago $19.5m. Announced an interim dividend reinstated at 3.5c/share, fully franked. Outlook: “ARN – In July, ARN revenues grew +19% vs previous period. August has seen a slight easing of bookings, but pacing suggests a similar result for the month. Extended lockdowns, particularly in Sydney and Melbourne, may impact FY21 performance mainly due to some uncertainty of the SME. Total people and operating costs for FY21 now expected to finish ~A$2-3M above FY19 levels. Cody – Trading conditions continue to improve with July revenues finishing +56% vs pcp. Should current COVID settings be maintained, forward bookings suggest a continuation of this trend for the remainder of Q3.”
  • Origin Energy (ORE) -4.12% Reports Full-year underlying net profit $318m vs consensus $277.2m. Revenue $12.10bn vs consensus $12.07bn, adjusted EBITDA $2.05bn vs consensus $1.98bn. Final announced a final dividend of 7.5 cps. FY Guidance (Jun 2022): Underlying EBITDA $1.85-2.15bn, Capex from – $370m to -$410m, Investments from – $210m to – $220m, APLNG production (100%) 685-710PJ.
  • Evolution Mining (EVN) +1.77% Full-year underlying profit $354.3m vs consensus $352.1m. Revenue $1.86bn vs consensus $1.87bn. EBITDA $914.2m vs $883.4m. Final fully franked dividend of 5c.
  • South32 (S32) -0.69% Full-year underlying profit $489.0m vs consensus US$501.4m; expands capital management program by US$120m to US$2bn.Revenue US$6.34bn vs consensus US$6.32bn. Final dividend US3.5c, and special dividend US2c, both fully franked
  • Airtasker (ART) +1.00% Full-year underlying EBITDA $0.0m vs consensus -$2.0m.Revenue $26.6m vs prospectus guidance of $24.5m. Gross marketplace volume $153.1m, in line with July 4 announcement. In the US, Airtasker’s acquisition and integration of Zaarly is progressing well with planned market launches in Kansas City, Dallas and Miami in H1 FY22. With positive operating cash flow and a strong cash balance of $45.9m, Airtasker is now well-positioned to invest in international expansion.
  • Orora (ORA) -3.28% Full-year underlying profit $156.7m vs consensus $155.3m. Revenue $3.54bn vs consensus $3.41bn. EBITDA $369.3m vs consensus $356.9m. Final dividend 7.5c. Australasia EBIT is expected to be broadly in line with FY21.

ECONOMIC NEWS/ BOND MARKETS

Estimates for average weekly ordinary time earnings for full-time adults (seasonally adjusted):

  • Increased by 1.4% to $1,737.10 annually to May 2021.
  • Males: $1,996.60 (public), and $1,807.40 (private).
  • Females: $1,781.60 (public), and $1,490.70 (private).

ECONOMIC DATA

Employment data

Seasonally adjusted estimates for July 2021:

  • The unemployment rate decreased to 4.6%, better than market estimates of a flat reading.
  • The participation rate decreased to 66.0%, in line with expectations.
  • Employment increased to 13,156,400. 2,200 jobs added vs estimates of -43,000.

CV19 NEWS

  • A UK study has found that the current vaccines are less effective against the Delta Blues.

Vaccine Tracker: In Australia, the latest vaccination rate is 239,750 doses per day, on average. At this pace, it will take another 3 months to cover 75% of the population. Getting there.

  • Nicole Kidman secured an exemption from strict Hong Kong quarantine rules flying in to film a new series called Expats.
  • China’s latest Covid outbreak is almost contained as the daily number of infections continues to come down.

ASIAN MARKETS

  • Alibaba falls to a record low.
  • Jefferies Financial says Chinese birth rates may drop to the lowest levels since 1950.
  • Huarong reveals a US$15bn loss.
  • China’s Xi has called for wealth distribution and a clamp down on the rich. Beginning to sound very much like a communist.

US AND EUROPEAN NEWS

  • European markets pointing to early losses of around 0.7%
  • Biden is digging in with his Afghanistan exit strategy. He had a strategy?
  • Nvidia has admitted its ARM bid may take longer than the 18-months originally thought.
  • CME bidding for CBoE in US$16bn deal.

And finally….

A photographer was crushed to death by a huge block of cheddar. Everybody tried to warn him.

We were on holiday in Scotland and wanted to go to Dundee. Everyone said it was difficult to find but it was piece of cake.

Clarence

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