The ASX kicked off the week and run into month end in style, up 42 points to 7384 (0.57%) although well off intra day highs. Lacklustre volumes but good support for banks. The Big Bank Basket rose 2% to $185.40. Other financials also moved modestly higher, with MQG up 1.2% and SUN up 0.6%. Miners too, took a positive step this week as iron ore prices stabilised, RIO up 1.1% and FMG up 2.7%. Uranium stocks took a step back, PDN down 7.8% and BOE off 5.5%. ERA announced remediation costs would be higher and fell 8.9%. Gold miners continue to be out of favour but energy stocks continuing to do well as oil and gas prices rise, STO up 2.0% and KAR up 0.2%. Industrials were mostly firmer, WOW slipped 0.6% and REA down 1.5% but TLS rose 0.8%, ALL up 0.5% and REH up 2.7%. Healthcare mixed. SIG lobbed a fresh bid at API up 3.1%, out bidding WES by 2c at 157c but a cash and scrip combo. Tech stocks flat as APT fell 1.95%. The All –Tech Index dropped 0.3%. Nothing on the economic front and corporate news thin on the ground too, except for API bid. NSW laid out the road map to reopening and travel stocks took off, FLT up 7.5% and WEB up 5.2%.
- Winners: PEB, AVZ, VGL, RBL, FLT, SM1, KED
- Losers: ERA,PDN, SFR, LTR, BOE, JRV, LKE.
- Positive sectors: Banks. Iron ore miners. Energy. Industrials
- Negative sectors: Healthcare. Good miners.
- Hi 7416 Lo 7347 Average volume.
- Big Bank Basket: Rallies to $185.40
- All-Tech index: Down 0.3% APT down 1.95%
- Gold: Rises to AUD2413.
- Bitcoin: Steady at US$44052.
- Aussie Dollar: Falls to 72.80c 10-YEAR YIELD: Unchanged at 1.40%
- Asian Markets: unchanged. China up 0.72% and HK up 0.2%
- US Futures: Dow futures up 145 NASDAQ futures up 65.
STOCKS ON THE MOVE
- AVZ +9.38% cornerstone investor secured for Manono project.
- SM1 +7.14% results template.
- FLT +7.48% WEB +5.21% CTD +3.1% travel trade winners.
- LTR -5.6% ex-bonus issue.
- ARU +17.95% ASX response.
- KCN +11.42% optimism builds on Thai
- CYM +6.67% copper exposure through Nifty.
- AVA +5.43% notice of AGM.
- PDN -7.83% BOE -5.45% uranium profit taking.
- ERA -8.86% Rehab costs rise and business update.
- SFR -6.89% ex entitlements.
- INR -3.55% coming off the boil.,
- VTG -3.41% broker downgrade.
- IPO of the Day – Pacific Edge (PEB) +17.56% thin volume. Cancer diagnostic company dual listed with our Kiwi brothers. Two products a test for bladder cancer and the other for better clinical resolution.
- Speculative Stock of the Day: Revolve Resources (RRR) +48.39% becoming a substantial shareholder after last week’s investor webinar. Recently listed with a $12.7m raise.
IN THE NEWS
- Sigma Healthcare (SIG) launches bid for API at 157c/share. API shareholders would receive 35c in cash and 2.05 Sigma shares for each API share representing an implied value of 157c.
- Qantas (QAN) will ground its non-stop Perth-London flights until next April. It will also delay flights from Perth to NSW or Victoria by two months. Looks like WA is in no hurry to open its borders until early next year to international travel of NSW or VIC. QAN has also brought forward international flight projections to November 5th from December 1st.
- M&A Activity has hit an all-time high of $142bn this year. Super funds have already accounted for about $19.2 billion of this year’s total and that will rise to $23.3bn if the SYD bid goes ahead. The total assets of pension funds in Australia have ballooned to $3.3 trillion including investment returns, as they saw about $34bn in net inflows in the year to June 30. More are expected in the coming quarter. The last time it was this frantic was in 2007. Maybe something not to focus on.
- Lithium-sulphur battery play Li-S Energy (LIS) has added a range of institutional investors. LIS will list tomorrow in a hotly anticipated debut.
- Vulcan Energy (VUL) – the company has successfully produced its first battery quality lithium hydroxide monohydrate (LHM) from its pilot plant. Very low impurities and specs are better than required by offtake customers. Phase 1 Production is expected top start in 2024. A good step on the journey, we would expect the market to react positively to this announcement.
- CIMIC Group’s (CIM) UGL has been awarded a contract extension to provide asset management and project-related services at BP fuel terminals across Australia. The extension will generate revenue to UGL of approximately $150m.
- Seven West Media (SVW) has secured a new long-term horse racing broadcast deal. Follows an unsuccessful proposal from Network Ten to buy the free-to-air broadcast rights to key events. Details not disclosed.
ECONOMIC NEWS/ BOND MARKETS
- According to the Singapore finance minister, all is on track for a reopening.
- NSW Premier lays out road map back to normal. October 11th will see many restrictions eased but no travel to Regional NSW until end of October. NSW recorded 787 new cases and 12 deaths.
- Alcohol companies in China rose after a Kweichow Moutai senior executive pledged long -term reforms. At one stage up as much as 10%. The CSI300 Consumer Staple index was up 8.4% with its best day since 2008.
- Material stocks in China though struggled as higher power prices threaten to shut factories and crimp output.
- Several Chinese provinces are already rationing electricity to industries to meet President Xi Jinping’s targets for energy efficiency and pollution reduction.
- In Hong Kong, shares tied to cryptocurrencies also trended lower after China banned transactions and vowed to root out mining of digital assets.
- Nomura’s Chief China Economist Lu Ting said there’s now a chance that its growth projection for 2021, which was cut on Friday to 7.7% from 8.2%, could be lowered further as more lockdowns on power price rises and environmental curbs hinder geowth,.
US AND EUROPEAN NEWS
- Photo finish in German polls. European futures showing a strong start up around 0.8-1%.
- A UK study has found CV19 has caused the biggest fall in life expectancy sine 1945. American men are firmly in the spotlight
- Panic buying in UK petrol stations as the winter of discontent looks set to hit UK.
- Poisonings in the US are rising as conservative commentators recommend anything but vaccines.
- Higher energy prices are feeding into the food chain with higher fertiliser prices which could push inflation much higher and not be so transitory.