The ASX 200 had a less volatile session closing down 17 points to 6972 (-0.2%) after erasing early falls but nervous ahead of RBA meeting tomorrow. Last day for quarterlies saw analysts busy, ANN earnings warning on cost pressures and margin contraction. The stock tumbled 14.3% but off early lows. Banks were soggy, falling to $167.70 (-2.2%) in the Big Bank Basket. MQG suffering falling 1.8% and REITs finding favour with GMG rising 1.1%. Tech was also in demand as SQ2 rose 8.1% on a good move in Block in US. XRO recovered 2.8% after being oversold. WTC also in demand up 4.9% and the All-Tech Index up 3.0%. Healthcare better with CSL rising 1.1%, RMD up 2.1% on broker upgrades. Industrials were mostly positive, ALL up 1.5%, REH up 3.8% and DMP rose 3.9%. Miners mixed despite iron ore gains, BHP lost 1.2% and RIO off 1.9%. FMG bucked the trend rising 2.2%.  Gold miners mixed but energy stocks doing very well, STO up 1.6% and WPL up 0.9%. In corporate news, it was ANN that dominated with a warning for the sector perhaps, ARB gave a positive update rising 7.9% and today is the last day of the BHP DLC. RBA tomorrow. Asian markets closed for Lunar New Year.

Major Movers:

  • Winners: IAP, TUA, WBT, TLX, SQ2, ARB, Z1P, 360
  • Losers: ANN, DUB, SM1, NHF, HT1, A4N, PBH, SYR
  • Positive sectors: Healthcare. Tech. REITs. Industrials. Oils.
  • Negative sectors: Iron ore. Banks.
  • High 7004 Low 6933. Volatility eases
  • Big Bank Basket: Rallies to $167.70 (-2.2%)
  • Oil up 1.1% in Asian trade
  • All-Tech index: Up 3.0%
  • Gold: Eases to $2552
  • Bitcoin: Eases to US$36948
  • Aussie Dollar:  Holding around 70c
  • 10-Year Yield: Eases back to 1.91%
  • Asian markets closed for holidays
  • US Futures: Dow up 40 points Nasdaq up 44

Stocks on the Move

  • IAP +17.52% non-binding proposal at 190c.
  • TUA +11.34% back in demand.
  • ARB +7.90% trading update.
  • TLX +8.81% SPP booklet despatched.
  • WBT +9.48% Tech bounce.
  • SQ2 +8.13% Block bounce in US.
  • Z1P +7.48% Block helps.
  • CBR +15.50% broker upgrades after quarterly.
  • MAD +14.49% operational update.
  • M7T +18.98% quarterly update.
  • ADO -13.33% quarterly update.
  • ASO -8.33% profit taking.
  • ANN -14.34% bounces off lows.
  • SM1 -6.83% reverses gain from Friday.
  • DUB -6.84% quarterly.
  • A4N -4.29% profit taking.
  • PBH -4.14% competition still hurting in US.
  • Speculative stock of the Day: Firebrick Pharma (FRE) +22.64% recent IPO kicking again. Nasal spray for common cold treatment.

In the News

  • ARB Corporation (ARB) has reported unaudited revenue of $359m for 1HY22, up 26.5% vs 1H21. Unaudited profit before tax is expected within the range of $90-92m. Management maintains a positive outlook given a strong order book and inventory levels. Added it is focused on managing customer expectations, global supply chain pressures and pursuing market opportunities.
  • Liontown Resources (LTR) Q2 net cash from operating activities -$2m. Cash and cash equivalents $171m. Management described the quarter as ‘transformational’.
  • ANZ considering new capital notes issue
  • Novonix (NVX) Q2 net cash from operating activities -$7.6m. December quarter receipts from customers $2.2m. Cash and cash equivalents $259.9m.
  • IGO Limited (IGO) first half profit $90.7m vs year-ago $54.1m but missed consensus of $99.5m. Revenue $378.4m vs year-ago $313.6m and better than consensus of $329.5m. Interim fully franked dividend of 5.0c per share. Sees Nova nickel production of 12,500-13,500t in FY22 and copper production of 5,650-6,250t.
  • CBA has recognised a loss of $85m for insurance claims regarding the hail and storm weather events in the East Coast, South Australia and Tasmania during October 2021. Added the sale of its 55% interest in Colonial First State to KKR has led to a 32bp uplift to its CET1 ratio. Half-year results will be released on 9 February.
  • VGI Partners (VGI) enters exclusivity and signs a merger term sheet with Regal Funds Management (RF1). The proposed merger would lead to total funds under management of over $6bn.
  • Nearmap (NEA) appoints Penny Diamantakiou as CFO.
  • Irongate Group (IAP) receives non-binding offer from Charter Hall managed partnership of 190c, cash.
  • NextDC (NXT) increases its contract utilisation to 81MW, up ~5.5MW since June last year. Sales pipeline remains robust with momentum continuing into the second half of FY22. NXT is on track to bring its third generation hyperscale data centre campuses, M3 and S3, into service at the end of FY22.
  • BHP unification effective. UK investors in BHP will receive one New Limited Share for each Plc share they held on Friday. New Limited Shares will commence trading on the ASX on a deferred settlement basis under BHPN today. Normal trading in New Limited Shares on the ASX under the ticker “BHP” is expected on February 2. Over 2.1bn New Limited Shares have been issued. ~42% of the total number of Limited Shares.
  • Ansell (ANN) has downgraded its guidance for FY22. Supply chain disruption, slowing demand and a soft margin outlook have weighed on its expectations. Sees FY22 EPS to be in the range of 125-145c vs previous guidance of 175-195c.
  • Samuel Terry Asset Management has made a $45m off-market takeover bid for FAR. The offer, worth 45c a share, is at a premium of 23.3% to FAR’s last closing price.
  • Perseus Mining (PRU) has acquired a 15%interest in African gold developer Orca Gold from Resolute Mining (RSG) for $19.6m.
  • Gold Road Resources (GOR) full-year production 246,529oz vs guidance 250-260Koz. 2022 production guidance is for 300-340Koz at an attributable AISC of $1,270 – $1,470 per ounce.

Economic News/Bond Markets

  • The Melbourne Institute Inflation gauge improved 0.4% in January to be up 3% on a year ago. The ‘underlying’ or trimmed mean inflation measure lifted 0.4% in January with the annual rate up from 1.9% to 2.9%.
  • Private sector credit for December was up 0.8% over the month, ahead of estimates of 0.6%, to be up 7.2% on a year ago vs consensus 6.9%. A higher reading implies a level of confidence. Businesses are more likely to borrow when they are confident in their financial position and outlook.

CV19 News

  • NZ Prime Minister Jacinda Ardern has returned a negative test for Covid-19.
  • China reported combined 12 Covid infections among Olympic athletes and team officials.

Asian Markets

  • Closed for Lunar New Year.
  • Beijing Winter Games kick off Friday. 

US and European News

  • Citrix is closing in on a US$13bn buyout by Elliott and Visa.
  • Amy Schneider ended a record-breaking 40-day winning streak on “Jeopardy,” taking home US$1.38m. Now she faces another more jeopardy, the tax liability which could be worth US$630,000. Ken Jennings holds the record of 74 consecutive wins in 2004.
  • World’s largest sovereign wealth fund chief warns that inflation will become permanent.
  • OPEC plus meeting Wednesday. Oil pushing ahead again.

And finally…..