ASX 200 closes flat after a quiet day at index level but a flurry of results provide plenty of fun beneath the surface. Banks slid slightly with the Big Bank Basket down to $176.15 (1.2%). CBA down 1.0%, ANZ off 2.0% and other financials unchanged. MQG flat, insurers flat too. Healthcare suffering with CSL down 1.5% and FPH dropping 5.2% on results. RHC up 1.6% and COH up 2.2% on its results. Industrials firmed to finish the week, WES up 0.7%, TLS doing well up 0.5% as TPG fell hard on disappointing results, down 12.5%. Tech slightly higher although XRO falling 2.0% on negative broker moves. The AllTech Index down 0.3%. REITS struggled led lower by GMG down 2.6%. Resources were better finishing the week in style as IO stocks rallied, BHP up 1.0%, FMG up 0.4% and RIO up 1.5%. Base metals stocks also doing well with S32 up 1.7% as coal stocks fired up yet again, WHC 6.2% TER up 7.8% and NHC rising 4.0%. Lithium stocks still a little becalmed and some profit taking creeping in, LTR down 1.5% but majors better, AKE up 1.5%. Oil and gas stocks doing well as crude rises, WDS up 4.2%, STO up 6.4% and KAR doing very well up 7.3%. Gold miners better as NCM rose 3.6% on better than expected results. In corporate news, plenty going on as we hit the half-way point on results. TPG cratered on mobile wars, AX1 had a great day on better numbers, up 11.0%. ING down 9.4% with LFS off 1.6% as Fahour set to leave in a year. Nothing significant on the economic front. Asian markets mixed but little changed. 10-year yields up to 3.39%, creeping higher.

HEADLINES

  • Winners: AX1, SYA, TER, KAR, STO, WHC, YAL, PWH
  • Losers: TPG, ING, LLL, PBH, OPH, TPW, TYR, PNV
  • Positive sectors: Oil and gas. Coal. Iron ore. Gold.
  • Negative sectors: Banks. Healthcare. REITs.
  • High 7138 Low 7108. Narrow range. Volumes boosted by ETO expiry.
  • ASX 200 up 1.2% for the week.
  • Big Bank Basket: Down to $176.15 (1.2%)
  • All-Tech index: Down 0.3% XRO falls.
  • Gold: A little weaker at $2537.
  • Bitcoin: Weaker at US$22,800
  • Aussie Dollar: Drifts to 69.11c.
  • 10-Year Yield:  Pushes higher to 3.39%.
  • Asian markets: Mixed, Japan flat, China down 0.4% and HK up 0.2%%.
  • US Futures: Dow down 47 Nasdaq down 40
  • European markets opening mixed, UK better.

MAJOR MOVERS

  • AX1 +10.96% shoe fits. Good results.
  • TER +7.82% old king coal just keeps on going higher.
  • KAR +7.34% oil bounce.
  • SYA +8.00% back in demand.
  • BCB +5.80% coal prices.
  • DGL +5.38% squeezed higher.
  • CRN +5.13% coal.
  • LAU +7.84% results announcement.
  • PTB +36.09% enters into scheme of arrangement.
  • TPG -12.39% disappointing results.
  • ING -9.43% no love em.
  • LLL -7.34% the lion sleeps tonight.
  • OPH -6.55% investment update and NAV report.
  • PNV -6.37% profit taking.
  • TYR -6.37% tech sell off.
  • GWA -6.25% ex-dividend.
  • TPW -6.51% Hygge no more.
  • TLX -4.52% broker downgrades.
  • AGL -3.92% results. No friends electric.
  • DEV -3.90% change of director’s interest.
  • SZL -6.47% just a boy giving it all away.
  • Speculative Stock of the Day: Cobre (CBE) +28.57% Botswana renewal approved for an additional two years. Good volume.

IN THE NEWS

  • Indonesia‘s President Joko Widodo confirmed in a speech he’s considering introducing a tax on nickel exports in a bid to refine more at home. Indonesia is the world’s largest producer of the metal.
  • Stockland (SGP) full-year funds from operations (FFO) 35.7c vs guidance 35.1-35.6c and consensus 35c.Revenue $2.85bn vs year-ago $2.64bn. Final dividend 14.6c. In FY23 sees FFO per security guidance set at 36.4 to 37.4c on a pre-tax basis.
  • APA (APA) identifies payment errors to employees over seven year-period. To include provision of $32m in FY22.
  • Mayne Pharma Group (MYX) CEO Scott Richards to retire and return to Australia.
  • Inghams Group (ING) full-year underlying profit $42.4m vs consensus $37.8m. Revenue $2.71bn vs consensus $2.63bn. Final dividend of 0.5c. Observed positive long-term trends in poultry volume growth, leading protein affordability.
  • Cleanaway Waste Management (CWY) to acquire GRL for $168.5m, launches $400m equity raising at 250c.
  • Fisher & Paykel Healthcare (FPH) expects first half profit between NZ$85-95m vs consensus NZ$136.1m. Expects revenue of ~NZ$670m and gross margins for H1 to be ~60%, below the firms long-term target of 65%. Management comments, “the pandemic continues to adversely impact gross margin due to elevated freight and COVID-19 related costs”.
  • Cochlear (COH) full-year underlying profit $277m vs consensus $284.6m. Revenue $1.64bn vs consensus $1.65bn. Cochlear implants (units) 38,182 vs year-ago 36,456. Final dividend $1.45, bringing full-year dividend to $3.00, in line with consensus. In FY23 sees underlying profit $290-305m and to be weighted to H2.
  • Accent Group (AX1) full-year EBITDA $213.6m vs consensus $206.1m. Revenue $1.27bn vs consensus $1.06bn. A final dividend of 4c (fully franked), brings total dividends for the year to 6.50c. Inventory levels in-line with expectations. Trading conditions for the first 7 weeks of FY23 have been positive, with total sales are up 48.9% vs a year ago although last year numbers where disrupted by COVID.
  • AGL Energy (AGL) full-year underlying profit $225m vs consensus $242.7m. Revenue $13.22bn vs consensus $11.17bn. Final dividend of 10c (unfranked), total dividend for FY22 26c (unfranked). On track to deliver $100m of sustaining capital expenditure reductions by the end of FY23. Review of strategic direction underway. Process for a new Chair is well advanced, has also commenced a global search for the Managing Director and CEO. Some good news, coal plant outages experienced in June and July are not expected to be repeated this financial year.
  • Equity Trustees (EQT) had brokers working on fund raising to fund its purchase of Australian Executor Trustees corporate trustee business off Insignia Financial.
  • TPG Telecom (TPG) – Disappointing numbers, flat revenue on the previous corresponding period in its first half at $2.63 billion, compared to consensus estimates of $2.67bn. Earnings before interest, tax, depreciation and amortisation fell 5% to $837m, TPG added about 140,000 new subscribers in the six months ended June 30 as its overseas-facing brands such as Vodafone and Lebara capitalised on the international border reopening.

ECONOMIC NEWS/ BOND MARKETS

Livestock Products – Key statistics

In seasonally adjusted terms for the June 2022 quarter:

  • Red meat production increased 5.5%
  • Chicken meat production decreased 3.4%
  • Wool recievals increased by 11.6%

ASIAN MARKETS

  • Chinese President Xi Jinping and Russian leader Vladimir Putin are both planning to attend a Group of 20 summit in the resort island of Bali later this year.
  • The Japanese tax man is telling young people to drink more alcohol to help revitalise the drinks industry. “Sake Viva”. Japan collected about 1.1 trillion yen ($8 billion) in tax from liquor sales, or around 2% of total tax revenue in fiscal 2020, down 13% from  2016, according to tax agency data.
  • Indonesia‘s President Joko Widodo confirmed in a speech he’s considering introducing a tax on nickel exports in a bid to refine more at home. Indonesia is the world’s largest producer of the metal.
  • The Chinese heatwave “is a quite dire situation,” Dan Wang, the chief economist at Hang Seng Bank China said today. “It will affect those big energy-intensive industries and it will have a knock-on effect throughout the economy and even to the global supply chain,” she said.

US AND EUROPEAN HEADLINES

  • German July PPI up 5.3% v 0.6% forecast. Ouch!
  • UK retail sales for July excluding fuel down 3.0% y/y v 5.9% in June. Down 3.4% v 5.9% in June.
  • UK says it will extend the life of four coal power plants into the winter. UK energy prices will be hiked next Friday.
  • UK sees rails strikes as talks continue with union. 40k workers on strike in London and elsewhere. All very early 80s.
  • Bed Bath & Beyond shares plummet after Ryan Cohen confirms stake sale.
  • Turkey cuts interest rates despite inflation rising to 80%.

And finally….

Clarence

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