The ASX 200 drops 72 points to 7161 (-1.0%) as Russian moves on Ukraine once again spook the market. Off lows at close. Broad base losses with only gold and oil escaping from the carnage. Results once again in focus with some good numbers from some and impressive moves higher against the trend. Banks fell hard with the Big Bank Basket down to $177.76 (-1.7%). MQG slid another 1.8% with NWL off another 2.6%. Healthcare proved resilient, CSL up 1.3% and COH rallied 9.0% on its results. SHL continued to slip by another 2.1%. Industrials soggy, WES down 3.7%, TLS down 1.0% and travel stocks flopping post the reopening of tourism. QAN down 3.0%, WEB off 6.1% and FLT down 5.4%. Tech stocks were mauled, XRO down 3.1%, WTC off 4.0% and SQ2 collapsing another 4.3%. Z1P sold off heavily down 9.7% as were SZL as a capital raising looms. In the miners, Iron ore stocks fell BHP off 0.9% and FMG down 1.5%, base metals fell, and lithium depressed again, PLS down 4.8% and MIN off 3.8%. Gold was a safe haven as NCM rose 2.3% and NST up 4.6%. Oils also in demand as crude prices picked up on Ukraine issues. WPL up 3.8% and STO up 3.2%. In corporate news, COL followed the EDV results with gains today on better than expected numbers. COH rallied 9.0%, CGC did well as international business was firm rising 8.7%. HUB bucked the recent trend in platform stocks rising 4.8% on its numbers and SLC, NAN and UWL all fell hard on the numbers. On the economic front, ANZ consumer confidence slipped 1.4% as higher petrol prices took their toll. Asian markets were soggy on macro issues and a further Chinese clampdown on Tech. 10-year yields steady at 2.20%.
End of Day Podcast – Tuesday, February 22
- Winners: MND, COH, CGC, MCR, STX, GEM, MCR, HUB, NST
- Losers: NAN, RNU, LTR, SLC, 88E, TYR, Z1P, FCL, CTT
- Positive sectors: Gold. Healthcare. Energy
- Negative sectors: Banks. Industrials. Tech. Miners
- High 7223 Low 7109
- Big Bank Basket: Down to $177.76 (-1.7%)
- All-Tech index: Down 2.9%
- Gold: Rises to $2651.
- Bitcoin: Falls to US$36725
- Aussie Dollar: Steady at 71.95c
- 10-Year Yield: Steady at 2.20%
- Asian markets weaker Japan down 1.6%, China down 1.3% and HK down 3.0%.
- US Futures: Dow down 429 (-1.3%)
Stocks on the Move
- MND +10.56% results surprise.
- COH +9.00% results beat forecasts.
- LLC +4.46% positive broker comments.
- RED +1.67% high-grade results at Darlot.
- GEM +5.37% occupancy rises and buyback.
- MCR +6.44% nickel price rises.
- EDV +3.20% brokers warm to results.
- BST +8.58% half-yearly results.
- PWR +1.89% results announcement.
- CTT -9.48% drop continues.
- NAN -13.14% results underwhelm.
- UWL -9.16% results.
- Z1P -9.70% capital raising potential.
- TYR -10.22% just gets worse.
- LTR -10.77% lithium sell down.
- CRR -20.83% lithium assays results.
- Speculative stock of the Day: Carawine Resources (CWX) +30.3% good volume as QGold bids 21c on market.
In the News
- Coles (COL) – despite COVID impacts COL managed to maintain its 33c dividend from a year ago. Basic EPS down 1.9%. The share price is up from January lows. Heading into results expectations for sales and margins were depressed. Normalisation post-COVID the silver lining in the distance for the big supermarkets.
- Johns Lyng Group (JLG) – first-half operating EBITDA $36.5m vs year-ago $27.7m and consensus $37.6m. Revenue $371.3m vs year-ago $277.8m and consensus $357.2m. Interim dividend 2.7c, up 22.7%. On initial inspection, the numbers look ok. ROE has dropped back from 31.6% to 18.3% but on a PE basis, the stock has actually become cheaper, sitting on 48.7x vs 91.9x in FY21.
- Cochlear (COH) – first-half underlying profit of $157.5m was ahead of consensus. Revenue was also ahead of consensus at $815m. Interim dividend 155c up 35%. Reaffirmed profit guidance for FY22. Trading to date is in line with the first half. The share price is down ~20% since August. Strong sales growth, gross margin improvement and lower than expected operating expenses tailwinds for the result.
- HUB24 (HUB) – Underlying profit in first half up 103% to $14.2m. FUA up 128% to $50bn. Solid flows in the period of $6.7bn. Recently acquired Class, management optimistic about the acquisition. Interim dividend of 7.5c, 67% higher than last year. Upgraded guidance – FY24 platform FUA target $83-92bn vs prior target $63-70bn.
- Perenti Global (PRN) – Diversified mining services business. Underlying profit down 22%. No dividend and doesn’t expect to pay one in FY22. Confirmed full-year guidance for higher revenue and EBITDA.
- Monadelphous (MDN) – suffered a similar fate, down more than 40% since May 2018. MND results this morning look to have beaten consensus estimates. Interim dividend of 24c above what the market had expected. Construction activity is expected to decline in the second of FY22 before increasing again in FY23. Shortage of skilled labour is expected to continue to be a major challenge for operations, particularly in Australia.
- West African Resources (WAF) – expects 2022 unhedged gold production 220-240Koz at AISC US$1040-1100/oz.
- ARB Corporation (ARB) – has lifted its interim dividend 34.5% to 39c on earnings of 84.5¢ a share, with sales revenue up 26.5% to $359.2m for the six months to December 31.
- Deterra (DRR) – nearly doubled its net profit to $61.7m on royalty revenues of $92.8m for the half-year to December 31, 2021.
- Uniti Group (UWL) – first-half revenue increased 98.4% to $109.5m, and underlying pre-tax profit hit $58.4m, up 137% from $24.7m in a period of record earnings of $70.5m.
- Superloop (SLC) – has narrowed its H1 FY 2022 net loss to $21.3m, versus $18.9m in the prior half-year period. Revenue for the period climbed 142.9%to $113m.
Economic News/Bond Markets
- RBNZ set to raise rates to 1% this week with another 25bps rates.
- ANZ Roy Morgan weekly consumer confidence fell 1.4% to 101.8 points last week.
- HSBC results 18c dividend. US$4bn misses estimates slightly. FY Pre-tax US$18.91bn. US1bn buyback.
- PBOC injects 100 billion yuan via reverse repo operation. China’s 7-day repo rate rises to highest since January 30th.
- Chinese tech crackdown seems to be far from over as Ant Group is now in the spotlight.
US and European News
- UN Security council completes emergency meeting. Words. Few sanctions.
- No more CV19 rules in UK.
- Trump’s Truth launches. New logo is pretty similar to a UK company called TRAILAR, a Fleet Telematics & Fuel Efficiency company. Lawyers have been advised.
- NBC sees the lowest Winter Olympics audience ever. Down 42% on last Winter Games.
- Tesla still struggling to secure permissions to increase and sell vehicles from European Giga factory.
- Weather has delayed the rescue of all the Bentleys on fire on a ship off the Azores. Still burning and too hot to board. Those lithium batteries burn nicely. Happy to own a smoke affected 911 if they are going cheap.
- Goldman Sachs says outright Ukrainian conflict could knock S&P another 6%.
Vladimir Putin in order to get on the good side of voters, goes to visit a school in Moscow to have a chat with the kids.
He talks to them about how Russia is a powerful nation and how he wants the best for the people.
At the end of the talk there is a section for questions.
Little Sasha puts her hand up and says, “I have two questions. Why did the Russians take Crimea and why are we sending troops to the Ukraine?”
Putin says, “Good questions”. But just as he is about to answer the bell goes and the kids go to lunch.
When they come back, they sit down and there is room for some more questions.
Another girl, Misha, puts her hand up and says “I have four questions. Why did the Russians invade Crimea, why are we sending troops to the Ukraine, why did the bell go 20 minutes early and where the heck is Sasha?”