Did you miss me?

ASX 200 closed down 22 points at 6976 (-0.3%) off the lows as Pelosi’s visit fears calm slightly. Banks slipped lower, with the Big Bank Basket down to $175.71 (-1%). MQG down 1.4%, and ASX slipping 3.4% on yet more delays to CHESS replacement. Insurers slightly higher, QBE up 1.1%. Healthcare fell away, with CSL leading the sector flat after early losses, SHL off 1.5% and COH off 0.6%. Industrials eased back with WOW and COL easier by 1.3%, WES down 1.1% and ALL off 1.6%. REITs steady and Tech better. WTC up 3.3%, and XRO pushing ahead by 3.6%. The AllTech Index up 1.8%. In resources, miners staged a comeback with BHP up 0.1%, FMG doing better up 0.7% and base metal stocks in favour. S32 up 0.8% and LYC rallying 7.6% on Mt Weld expansion plans. Lithium stocks better led by PLS and CXO, up 2.2% and 4.0%, respectively. Gold miners eased off slightly with oil and gas stocks under pressure, WDS down 0.3% and STO off 2.1%.  In corporate news, ORI in a halt with a $650m capital raise and an acquisition. RAP rose 50% on an increased offer from Pfizer. In economic news, we had retail trade volumes up 1.4%, which gave some hope to the sector. Asian markets being cautious on Pelosi’s visit, with Japan up 0.4%, China flat and HK up 0.6%. 10 -year yields steady at 3.06% after the drop yesterday in RBA news.

Headlines 

  • Winners: ASM, PNI, LKE, JRV, INR, ZIP, NVX, SYA
  • Losers: RMC, FCL, OPH, IDX, COF, SM1
  • Positive sectors: Base metals. Lithium.
  • Negative sectors: Banks. Consumer stocks. Oil and gas. Gold miners.
  • High 6988 Low 6918 Good recovery from Pelosi panic.
  • Big Bank Basket: Easier at $175.71 down 1%.  ANZ Rights down 2.3%
  • All-Tech index: Higher by 1.8%.
  • Gold: Higher at $2549
  • Bitcoin: Slipped to US$22854
  • Aussie Dollar: Eases to 69.35c
  • 10-Year Yield:  Back up to 3.07%.
  • Asian markets: Japan up 0.4%, China flat and HK up 0.6%.
  • US Futures: Dow up 106 Nasdaq up 16 European markets opening unchanged.

Major Movers

  • CHN +6.25% kicking on.
  • PNI +12.21% fund inflows positive.
  • INR +9.43% ringing the bell in NYC.
  • ZIP +8.61% slight warming of sentiment continuing.
  • LKE +10.56% bounce continues.
  • NEU +6.46% buyers back.
  • LYC +7.55% D&D presentation and Mt Weld expansion.
  • PNV +8.23% chairman’s webcast.
  • AVH +21.05% following PNV higher.
  • PAR +14.39% good bounce continuing after solid quarterly.
  • SRX +8.20% finding a level.
  • GAL -2.67% drill results underwhelm perhaps.
  • DMP -3.33% sellers back on soft retail in pizza segment.
  • CIA -3.18% iron ore stocks under pressure
  • ASX -3.39% another two years of no CHESS replacement.
  • ARL -10.96% profit taking continues.
  • CCP -1.82% broker downgrades.
  • Speculative Stock of the Day: ResApp (RAP) +50.00% another bid from Pfizer. 20.8c cash.

In the News

  • Pinnacle Investments (PNI) announce funds under management (FUM) fell over the financial year for the first time in a decade, with the fall in market value of holdings outweighing $600m of inflows. The company said that H2 inflows were below expectations, following record inflows in H1, and reported a 14% increase in FY net profit, up to $76.4m. Total affiliates FUM fell 6% to $83.7bn vs $89.4bn last year.
  • Pilbara Minerals (PLS) received 67 bids at the auction of its cargo of 5,000dmt at a target grade of around 5.5% lithia. The company said it intends to accept the highest bid of US$6,350/dmt, which on a pro-rate basis for lithia content (including freight) results in a price of around US$7,012/dmt.
  • BWP Trust (BWP) announced it will pay a final distribution of 9.27c, taking its full-year distribution to 18.29c (the same as last year). Its annual profit for FY22 rose 0.6% on last year’s number, up to 114.7m. The company reported like-for-like rental growth of 3.3% for the 12-months to June 2022, accounting for the average inflation on CPI linked leases of 3.3%, with net revaluation gains of $371.9m. Net tangible assets rose 17.6% to $3.87 per unit. Looking forward, BWP’s focus for FY23 is on filling vacancies and extending Bunnings leases though the exercise of options, and the company expects the 2023 distribution will be similar to 2022, with the possibility that capital profits will contribute to the payout.
  • Orica (ORI) is in a trading halt pending a $650m capital raising to acquire Axis Mining Technology for $260m in upfront cash and a deferred earn-out payment of up to $90m. ORI will do an underwritten $650m institutional share placement. Orica will also offer a non-underwritten SPP capped at $75m to shareholders. The rest of the proceeds will fund working capital requirements.
  • GQG Partners (GQG) – Rajiv Jain and Tim Carver will not sell any of their GQG Partners stakes when their shares emerge from voluntary lock-up on Friday August 12. The two have more than 2m shares combined, worth almost $3.4bn at today’s market prices.
  • ANZ – launched the 10-year tier 2 wholesale subordinated debt deal. Initial price guidance was for 280bps above swaps, in line with the margins NAB’s similar transaction fetched last week.
  • Charter Hall (CHC) – increased its exposure to fuel retailers, acquiring a portfolio of 18 Gull service stations in New Zealand and deepening its relationship with Ampol.
  • Macquarie Group (MQG) – the first bank to move on interest rates passing on the 50bps in full.
  • Genworth Mortgage (GMA) – buying back up to $100min shares, representing 9.2% of the shares.
  • Arafura Resources (ARU) – launches a $32m equity raising. Priced at 26.5c a share, a 17.2% discount to Arafura’s 32c last close and a 22% discount to the 10-day volume weighted average price. It included a one-for-two option with a 34c strike price and 18-month expiry.

Economic News/Bond Markets

  • Retail sales volumes up 1.4% in the June quarter to a new record level. EOFY enthusiasm likely contributed to the reading. Ben Dorber, head of retail statistics, said: “Sales volumes continued to rise into the June quarter, despite the largest rises in retail prices since the introduction of the GST in 2000, with price rises of 1.7% in June and 1.8% in March.”
  • New Zealand’s jobless rate surprisingly rose to 3.3% in the June quarter, from 3.2% in the first quarter of the year. The country’s unemployment rate was expected to fall to 3.1% in the second quarter.

Asian Markets

  • Pelosi says ‘US will not abandon Taiwan’.
  • China’s General Administration of Customs said in a statement Wednesday that some fish and fruit imports were suspended due to excessive pesticide residue detected “multiple times” on products. The Ministry of Commerce said in a separate statement it banned natural sand exports based on provisions of related law, but gave no further details.

US and European Headlines

  • European stocks are expected to open lower Wednesday.
  • Earnings in Europe in focus, with Commerzbank (unexpected profit swing), SocGen, BMW, Banco BPM, Siemens Healthineers and Veolia and Wolters Kluwer among those companies reporting.
  • Ferrari increased its guidance for 2022 after a record quarterly result. The CEO said its net order intake also hit a record in the quarter. Ferrari shipped 3,455 vehicles in the quarter, up 29% from a year ago, on strong demand for its V8-powered Portofino M convertible and F8 mid-engine sports car.
  • People who get the fourth dose of the Pfizer vaccine were far less likely to get Covid than triple-vaccinated peers in a study.
  • Robinhood to slash headcount by 23% as retail trading bubble bursts.

And finally….

Clarence

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