The ASX 200 gave up early gains to close up 19 points at 7381 on a late surge. NZ CPI data saw 10-year yields spike higher and Chinese GDP miss both weighing on investors’ minds. Banks did well in this environment with CBA up 1.6% and the Big Bank Basket up to $186.55 %. MQG put on 0.5% after a broker upgrade and insurers also did ok, QBE up 1.0%. REITS though under pressure on the rate rise, SYD fell 0.4% on an update on bid and TCL flat on bond push. Healthcare stocks under pressure, CSL down 1.1% and RMD down 0.9%. Industrials under a little pressure, ALL suspended as it raises funds for a large UK acquisition. Resources were the place to be. BHP rose 0.9%, FMG up 1.0% but base metals doing very well, OZL up 4.6% and SFR rising 0.5% on higher commodity prices. Oil prices continue to head higher and a bid for SXY from POSCO saw some rerating in the sector. STO up 1.4%, WPL up 0.3%. Tech stocks under pressure on the yield increase, APT down 1.4% and Z1P updated the market falling 1.5%. The All–Tech Index dropped 1.4%. Travel stocks slightly positive as the economy remains on track to reopen despite high numbers still in Victoria. In corporate news, SLC rose 22.2% after the sale of some of its Singaporean assets, CL1 up 61.3% on a bid from HUB -0.9%. In economic news, NZ CPI hit 4.9% annually and Chinese GDP dropped to 4.9% too.
- Winners: SXY, MYX, JRV, BOE, VUL, LKE, PDN, PPS, TUA..
- Losers: IFM, AD8, HDN, WAF, SZL, ASM, KGN, SWM
- Positive sectors: Banks. Resources.
- Negative sectors: REITs. Tech. Industrials. Healthcare.
- Hi 7394 Lo 7354
- Big Bank Basket: Rises slightly to $186.55 (1.3%)
- All-Tech index: Down 1.4% APT down 1.4% Z1P down 1.4%
- Gold: Down to AUD2388
- Bitcoin: Rallies to US$62094.
- Aussie Dollar: Lower at 74.02c 10-YEAR YIELD: Soars on NZ CPI to 1.75%
- Asian Markets: Japan down 0.3% Hong Kong down 0.3%. China down 1.4%
- US Futures: Dow futures down 17 NASDAQ futures down 45.
STOCKS ON THE MOVE
- SXY +14.92% POSCO bid. Maybe more to come.
- BOE +9.26% PDN +7.41% uranium bounces back.
- PPS +6.87% solid update and CL1 bid helps.
- ICQ +4.04% scheme of arrangement at 53c.
- NIC +5.08% agreement signed to supply limonite ire.
- 29M +3.62% quarterly report.
- ORE +4.85% lithium majors waking uyp.
- CL1 +61.33% HUB 24 bid.
- SLC +22.16% sale of Asian assets.
- AGY +18.60% lithium marches higher.
- AOP +14.29% bid from RMS.
- LYC +4.75% rare earths finding favour.
- CVN +1.56% quarterly activities report.
- BCB +10.81% coal still rumbling around.
- NWE -15.38% operational update.
- RTR -13.27% further high-grade zinc.
- PNR -2.27% becoming a substantial holder.
- IFM -15.24% CEO and MD resigns.
- HDN -6.85% merger with KMC.
- AD8 -8.67% Q1 trading update.
- SYD -0.36% proposal update.
- Speculative Stock of the Day: Montem Resources (MR1) +95.56% Transition of its Tent Mountain in Canada to renewable energy aiming to produce green hydrogen.
IN THE NEWS
- Aristocrat Leisure (ALL) makes an offer to acquire Playtech at 680p a share or $3.9bn. Will fund part of the deal via an underwritten 1 for 20.56 entitlement offer at 4185c. Trading update: FY21 NPATA $864m vs consensus $843.3m. Revenue $4.73bn vs year-ago $4.14bn and EBITDA $1.54bn vs consensus $1.52bn.
- HUB24 (HUB) has bid for Class (CL1) this morning. They are bidding one HUB for 11 CL1 plus 10c a share cash. The bid is unanimously approved by the CL1 Board. HUB expects it to be 8% earnings accretive (excluding the one-off costs of the deal). It values CL1 at 310.5c. The bid is not expected to be completed until mid to late February. Scheme of arrangements (a bidding structure) take time.
- Ramelius Resources (RMS) to acquire Apollo Consolidated (AOP) for an implied price of 56.2c.
- Senex Energy (SXY) confirms takeover talks with POSCO International at 440c.
- Transurban Group (TCL) unchanged, upgraded to add from hold at Morgans.
- Temple & Webster Group (TPW) expects full-year EBITDA growth to be within the 2-4% range.
- Monadelphous Group (MND) repeats outlook in its annual report. FY22 revenue is likely to be lower due to the timing of new major projects.
- Australian Ethical Investment (AEF) September FUM $6.54bn vs quarter-ago $6.07bn.
- Superloop (SLC) up 20%, sells its Hong Kong operations and select Singapore assets to Columbia Capital and DigitalBridge for US$140m, a 30% premium to carrying value.
- Home Consortium (HMC) proposes to restructure and merger with Home Consortium Developments (HDN).
- Praemium (PPS) Q1 funds under administration $45.63bn vs quarter-ago $41.68bn an increase of 46% in the past 12 months. Posted record quarterly inflows of $1.66bn. CEO said its international business divestment is continuing to plan. Added it is now in the due diligence phase with short-listed parties. The market responding well to the update, up more than 9% early.
- iCar Asia (ICQ) enters scheme implementation deed with Carsome Group. Shareholders to receive 53c in cash, valuing iCar’s equity at ~$238m
ECONOMIC NEWS/ BOND MARKETS
- New Zealand’s consumer price index surged to a new decade high. CPI rose 2.2% in the quarter ended September 30, from 1.3% in the previous three months. Annual inflation accelerated to 4.9%, from 3.3% in the previous period. Rates and housing related costs the main drivers.
- Nothing much is heard on this, but UK CV19 case rates are stubbornly high and up to 800 people a week are dying from it. The U.K. reported the highest daily jump in new cases on Sunday since mid-July. To date, the U.K. has recorded almost 140,000 Covid-related fatalities.
- The Chinese economy expanded 4.9% year-on-year in Q3, down from 7.9% in Q2 and below market estimates of 5.2%. The slowest growth since the third quarter last year. Property sector headwinds, energy crisis, supply bottlenecks and rising producer prices weighing. The pressure is on policymakers to support growth with calls to maintain liquidity and make changes to credit and real estate policies becoming louder. One NBS spokesperson said, “the domestic economic recovery is still unstable and uneven.” China’s economic growth is likely to slow to 5.5% in 2022 from an expected expansion of 8.2% this year, according to Reuters. On Friday, a PBOC official said the spillover effect of Evergrande’s debt problems on the banking system were controllable and individual financial institutions’ risk exposures were not big.
- China has tested a new hypersonic missile that whooshed around the world and took the CIA by compete surprise. And its nuclear capable. The test failed a little bit as it missed its target by 28 miles. Still with a nuclear war head that is not a huge issue.
US AND EUROPEAN NEWS
- European markets openly flat and quiet.
- Skoda will produce 250,000 fewer cars due to a chip shortage.
- Consumers in Europe and the U.S. aren’t rushing to spend more than US$2.7 trillion in savings amassed during CV19 lockdowns. Reasons for hanging on to money include resurgent outbreaks, the pace of recovery and job prospects.
- The Biden economic plan is being challenged by Democrat states reliant on coal.
- BOE governor says inflation may not be that transitory after all. Lagarde says Merde, bien sur, ils sont transitoires
- UK says it is happy for China to invest in non-strategic industries.
- ‘You’ is the new Netflix #1 toppling Squid Games from the top spot.
An primary School Teacher had twenty-six students in her class. She presented each child
in her classroom the 1st half of a well-known proverb and asked them to come up with the remainder of the proverb. It’s hard to believe these were actually done by primary school kids.