The ASX 200 rose 73 points to 7370 (1.0%) with a sigh of Evergrande relief as the sun came up after all. Banks were dominant despite a rise of around 14% in iron ore. The Big Bank Basket rose to $180.32 with MQG up 2.6% and even MFG up 2.0%. Top bank CEOs were in Canberra talking about the problems with rampant house prices. Industrials firmed with NWS leading the way after a buy-back was announced, the stock rose 8.4%, TLS also doing well up 0.8% and SEK 2.1% to the good. TCL returned from its mammoth near $3bn raising and barely budged. Tech stocks fared well after APT rose 4.2% on Square’s move, Z1P continued the run from its Indian adventure announcement yesterday, up 4.9%. CPU also stirring up 3.7% and the All-Tech Index showing a solid 2.9% gain. In miners, things were slightly muted given the commodity price rises. Uranium stocks slipped, Iron ore stocks improved modestly with FMG up 1.0% and RIO better by 0.6% with MGX up another 2.1%. BHP though failed to launch closing down 0.7%. Action in base metals were dominated by the news from SFR that they had agreed to acquire a Spanish project, Minas de Aguas Teñidas S.A, for a company making or shaking, number of US$1.85bn. Oil and gas firmed with STO up 2.9% and WPL up 1.7%. Travel stocks firmed, after the speech from Dan Tehan yesterday, promising international travel by Xmas. WEB up 5.6% FLT up 5.2% and QAN took off 4.6%. In economic news, we had household wealth numbers and all eyes were on Hong Kong as Evergrande rallied 18% as liquidity issues sorted perhaps. At least for now.
- Winners: NVX, INR, LTR, NWS, AVZ, ABR, WHC, DGL
- Losers: TLX, BOE, LKE, HCW, KED, OPH, PDN
- Positive sectors: Banks, Financials, Telcos, Techs, REITs.
- Negative sectors: Gold miners.
- Hi 7387 Lo 7309
- Big Bank Basket: Rallies to $180.32
- All-Tech index: Up 2.9% APT up 4.2%
- Gold: Slips to AUD2437.
- Bitcoin: Rises to US$44046.
- Aussie Dollar: Falls to 72.40c 10-YEAR YIELD: Slips to 1.24%
- Asian Markets: Japan closed for yet another holiday. China up 0.6% and HK up 0.7%.
- US Futures: Dow futures up 105 NASDAQ futures up 43.
STOCKS ON THE MOVE
- NVX +9.78% continues its run.
- NWS +8.42% market likes buy back.
- DGL +6.74% broker research.
- INR +8.80% heading in the right direction.
- AGL +5.28% broker upgrades. A rare thing in this one.
- BAP +4.85% broker upgrade.
- CTD +6.56% travel is on again. Maybe.
- LOV +5.54% catches the PMV bug.
- KCN +43.90% Thailand update on compensation.
- RF1 +10.00% bounces back on webinar.
- BCB +7.41% good pop higher on better coal prices.
- PDI +10.34% more strong results from Bankan in Guinea.
- HLO +6.58% travel bounce.
- CXO +3.70% mining contractor appointed.
- SPT +10.84% director share purchase.
- MTC +19.05% significant visible gold in UGA -18 Phase II
- OPY +0.39% Kogan signs up.
- GMD -16.67% rethink on Raleigh Finlayson investment.
- TLX -5.59% trial gets pushed out.
- PDN -2.86% BOE -5.26% uranium stocks cool.
- LKE -4.92% partner raises $150m.
- KED -4.19% continues to slide lower.
- Speculative Stock of the Day: Aura Energy (AEE) +500.02% returns to trade after very lengthy suspension with a uranium project no less. Presentation too.
IN THE NEWS
- Regal Funds (RF1) – Presentation this morning and all is forgiven with the stock.
- Insurance Australia Group (IAG) received 435 claims across its brands following yesterday’s earthquake. Good news for building services company Johns Lyng Group (JLG). JLG’s core business centres around the restoration of properties that have been damaged by insured events like floods, fire and of course, earthquakes. The stock is up ~120% since this time last year.
- APN Industria REIT (ADI) and Dexus (DXS) to acquire interests in a portfolio of 51 industrial properties for $1.5bn. ADI to undertake a $350m capital raising at 345c/security to fund the purchases.
- Centuria Industrial REIT (CIP) to acquire four industrial freehold assets for $351.3m. Announces $325m equity raise at 380c. Reaffirms FY22 funds from operations guidance of no less than 18.1c.
- Sandfire (SFR) – Trading halt – Acquisition of Spanish group Matsa Mining for US$1.865bn ($2.572bn. Big acquisition and will see the company fund it through a combination of a US$650m ($897m) syndicated and underwritten debt facility secured by MATSA, an $1.248bn (US$905m) equity issue and $297m (US$215m) from existing cash reserves plus the drawdown of a $200m (US$145m) corporate debt facility. The Equity Raising is fully underwritten and consists of a Placement and the Entitlement Offer of 1 for 1 at 540c. This is a ‘company maker’ and is a huge deal for SFR. MATSA is a World-class polymetallic mine with ~100-120ktpa CuEq production. Tier-1 asset with three underground mines and a modern 4.7Mtpa processing plant.
- Transurban (TCL) – Ex Rights today after raising $2.9bn with strong demand from institutions at 1390c. 93% of entitlements were taken up. Looks like it was very strongly supported and the instos like the WestConnex deal.
- Brickworks (BKW) full-year underlying profit $285m vs consensus $248.9m. The statutory result was weighed down by costs related to its stake in Washington H. Soul Pattinson. Final dividend of 40c, fully franked. Trading statement upbeat noting unprecedented activity within the Property Trust. Its Building Products segment also experiencing strong demand although revenue numbers from its Australian and North American divisions missed expectations. North America sales momentum building.
- Premier Investments (PMV) full-year EBIT $351.9m vs company guidance $340-360m. Revenue $1.46bn vs consensus $1.46bn. Final dividend 46.0c, fully franked. Earnings before financing and taxes expenses within the expected range. Revenue in line. Full-year dividend up 14% vs year ago. Online sales up more than a third to above $300m contributing to a fifth of the group’s total sales.
- Westpac (WBC) understood to have halted the sale of its $1bn BT Panorama wealth management business, mulling a possible IPO or demerger. PNG’s consumer watchdog blocked the sale of its Pacific business to Kina yesterday.
- News Corp (NWS) announces US$1bn buy back program, which will replace a US$500m buy-back program approved by the board back in May 2013. The buy back is expected to start in early November.
ECONOMIC NEWS/ BOND MARKETS
- Total household wealth increased 5.8% ($735.0b) in the June quarter 2021 reaching a record $13,433.7bn. Growth in property which recorded the strongest quarterly growth on record (6.7%) followed by superannuation balances and shares were the main drivers.
Total financial assets of pension (superannuation) funds increased 6.2%($163.5bn). Positive conditions in the domestic and overseas share markets drove valuation gains of $131.8bn.
- $151.1bn increase in shares and other equity
- $7.1bn increase in deposits
- Evergrande has jumped on hopes that it can avoid a default with a US$83.5m interest payment due today. Part of a larger US$669m due to the end of the year.
- The People’s Bank of China pumped in 110 billion yuan (US$17 billion) of cash with seven- and 14-day reverse repurchase agreements.
- Fitch Ratings lowered China’s economic growth projections for 2021 and 2022. Gross domestic product is forecast to expand 8.1% this year, down from a previous projection of 8.4%, while the forecast for 2022 was cut to 5.2% from 5.5%.
- China has warned on the impact of soaring energy prices and its bearing on food security through fertiliser prices. Urea futures in Zhengzhou hit a new high Thursday.
US AND EUROPEAN NEWS
- European markets expected to open around 0.4% higher.
- Boeing expects the demand for its planes take off as China will need 8700 new planes. It is likely to account for 20% of the demand for wide-bodied jets.
- Biden and Boris try to calm Macron down. French President phone going straight through to voicemail for ScoMo.
- Taiwan looks to join trade pact CPTPP.
- FB tech officer steps down. Like.
- Netflix pays GBP500m for Roald Dahl’s entire works.
- Germany is going to the polls in three days. Some warning this time.
The lady at school asks Johnny who he wants to become in the future.
Johnny says: – Ma’am, I want to be a bum.
– Johnny, a bum? How is that? How do you intend to make a living?
– Ma’am, I would be standing in front of the shop with my friends, and that in itself is nice. Besides, I do not have to bother about rent, Insurance, Medicare levy, Superannuation, taxes etc. and they would not be interested in me either. In summer I will sleep in the open air, in winter in a shelter, people will take care of me, because people are good by nature. I will be a happy, free man.
The lady was disappointed with this idea as Johnny was quite intelligent boy.
Thirty years later, Johnny looks from the 80th floor of his Dubai hotel to a number of properties, looks at the helicopter that is about to take him to his island, looks at his yacht swinging in his marina, and says:
– Bugger! Where did I go wrong !?