ASX 200 drops 40 points to 7490 (-0.5%) as results dominate but downgrades continue. Industrials sagged badly with WOW down 0.8%, COL off 0.8% and WES falling 0.6%. REITs stumbling lower on higher 10-year bond yields around 3.66%. GMG down %, CHC off 1.3% and GPT falling 1.6%. Tech eased too as WTC fell 1.6% and XRO down 2.4% with the All–Tech Index down 0.8%. Banks were soggy, the Big Bank Basket unchanged at $191.98. MQG down 0.6% and insurers falling hard, SUN down 2.3% reversing the gains yesterday, QBE down 1.6% and IAG off 3.1%. In resources, not much to cheer about, iron ore stocks held up ok, but coal stocks fell into a black hole despite a ship arriving in China, NHC down 4.9% WHC off 5.9%. Gold miners fell, NCM down 1.5%, NST hit 1.7% and lithium stocks depressed, PLS falling 3.2%, AKE down 4.1% and LYC falling too down 1.7%. Oil and gas stocks mixed, HZN being a winner today, up 3.3% onreerve upgrade. In corporate news, AGL had a power cut, falling 10.3% on dismal numbers, STO resumed WA ops, CHC reaffirmed guidance and MP1 skips a dividend, not unexpected. Nothing on the economic front except for banks raising mortgage rates and sticking with deposit rates, data thin on the ground too. Asian market better still with Japan up modestly and China up 0.7% 10-year yields pushing higher again. Dow Jones futures up 95 points. NASDAQ futures up 40 points.

HEADLINES

  • Winners: MGH, AIS, ASB, DEG, WBT, GEM, MMS
  • Losers: AGL, DDR, TIE, CRN, WHC, SBM, NVX
  • Positive sectors: Not much.
  • Negative sectors: Everything else. REITs, Insurers and Coal hit hard.
  • High 7522 Low 7482. Narrow range again.
  • Big Bank Basket: $191.98 unchanged.
  • All-Tech index: Falls 0.8%
  • Gold steady at $2701
  • Bitcoin: Lower at US$22511
  • Aussie Dollar: Steady at 69.54c
  • 10-Year Yield: Back up to 3.66%
  • Asian markets: Better with Japan up 0.1%, HK up 0.4% and China up 0.7%.
  • US Futures: Dow up 95 Nasdaq up 40

MAJOR MOVERS

  • MGH +6.6% earnings guidance
  • AIS +6.08% looking good.
  • WBT +2.94% resumes push higher.
  • DEG +3.18% plenty of finance options it seems.
  • RWL +9.38% update on Indian progress.
  • MEI +13.04% shooting ahead.
  • HZN +3.33% reserve upgrade.
  • NXL +5.10% Takeover speculation continues.
  • CHN+0.93% chatter on substantial block trade.
  • AGL -10.33% worse day since 2007 on earnings report.
  • DUB -10.81% kicked again.
  • DRE -9.09% profit taking.
  • CU6 -6.63% prostate cancer trial reaches recruitment target.
  • CRN -6.05% WHC -5.85% coal stocks on the nose.
  • DDR -6.66% devil of a broker downgrade.
  • Speculative stock of the Day; Nothing on any volume. GTG gain evaporated.

COMPANY NEWS

  • Charter Hall Long REIT (CLW) reported H1 operating earnings of $101.2m or 14 cents a share and reiterated its fiscal 2023 operating EPS and distribution per security guidance of 28 cents each, representing a 6.1% distribution yield. The REIT’s diversified portfolio is 99.9% occupied.
  • AGL Energy (AGL) reported a 55.2% decrease in H1 2022 underlying profit to $87m, with a bottom-line loss of over $1bn due to a writedown on the closure of a coal power plant. The company lowered its full-year estimate for core net profit to $200m from $280m and declared an interim dividend of 8c per share, down from 16c the previous year.
  • Mirvac Group (MGR) reported a 3% increase in operating profit ($305m) in H1 2022-2023 driven by growth in its investment portfolio. However, statutory profit was down 62% from the previous year due to lower investment property revaluations. The company declared confirmed its target of operating earnings and distributions for the full fiscal year.
  • Maas Group Holdings Limited (MGH) has updated its earnings guidance for 1H23 and the full year (FY23). The company’s 1H23 Pro Forma EBITDA is expected to be in the range of $64m-$66m, an approximate 60% increase from the corresponding period in 2021. MGH reconfirms its full-year guidance, forecasting Pro Forma EBITDA for FY23 to be between $150m-$180m.
  • Arena REIT (ARF) has reported a net operating profit of $29.9m, up 8.6% on pcp, with a statutory net profit of $47.6m, down 74% on pcp. The company’s total assets increased by 4% to $1.5bn, while the Net Asset Value per security increased by 1% to $3.42. The portfolio occupancy rate is 99.6% with 100% of contracted rent received and an average like-for-like rent review increase of 6.45%.
  • De Grey Mining Company (DEG) has received proposals from 14 financial institutions for the debt funding of the Mallina Gold Project, with a majority indicating a capacity of around $800m. The project financing process is expected to be concluded in H2 2023.
  • Worley Limited (WOR) has been awarded a five-year master services agreement by Imperial Oil Resources Limited (Imperial) for construction and fabrication services related to Imperial’s Kearl oil sands processing facility in Alberta, Canada. Worley will provide offsite fabrication, module assembly and construction services, incorporating robotic welding and Microsoft’s HoloLensTM for safe and efficient remote site visits.
  • Anteris Technologies Ltd (AVR) DurAVR™ THV System has been granted expanded approval by the US FDA for a study evaluating the device’s safety and feasibility in treating severe aortic stenosis. The expanded approval will allow the company to accelerate certain activities related to study execution and finalize the reimbursement level under the Category B designation previously granted by the FDA.
  • Horizon Oil Limited (HZN) reports a significant increase in reserves in the Beibu Gulf, China, due to strong production performance of the wells. The updated assessment shows that developed oil recovery has increased over 150% from 1.95 mmbbls to 4.89 mmstb, supported by favourable post-drill mapping, longer horizontal wells, and larger vertical offset from the oil-water contact.
  • EML Payments (EML) – on the hunt for three board directors with international expertise. Maybe should have thought of that before now.

ECONOMIC & OTHER NEWS

  • Seek (SEK) job ads in January increased by 2.8%. Despite this increase, the number of job ads is still 18% below their May peak. However, the number of ads is 39% higher than pre-pandemic December 2019 levels, indicating overall strong labour demand.
  • Commonwealth Bank of Australia (CBA) has announced that it will raise its home loan variable interest rates by 0.25% annually, starting from February 17th, in response to the RBA’s recent increase of the cash rate. CBA will also increase interest rates on some of its savings products by a maximum of 0.75%.
  • ANZ says that China’s reopening will have no effect on inflation around the world.
  • Australia saw a 19% drop in the number of offenders proceeded against by police for illicit drug offences in 2021-22, the sixth straight annual decrease. Must be supply chain issues.

ASIAN MARKETS

  • Adani group shares back in the seller’s sights as MSCI says it is reviewing the amount of freely tradable shares in public markets.
  • The first Australian coal shipment to China in more than two years is on the verge of docking. Now awaiting customs clearance.
  • Hesai,a developer of sensor technologies used in self-driving cars, has raised US$190m in the largest IPO by a Chinese company in the US. It sold 10m American depositary receipts for US$19 each on Wednesday. At the IPO price, the company has a market value of about US$2.4bn

US AND EUROPEAN HEADLINES

  • Global Money managers have cut US$300bn of bearish bets and are now positioned more in line with historic normality.
  • Trading orders from the retail army in stocks and exchange-traded funds accounted for 23% of the market’s total volume in late January, above the previous high of 22% reached during the 2021 meme mania, according to JPMorgan.
  • Disney giving 7000 people marching orders.
  • Robinhood seeking to buy back stock seized from FTX founder Bankman-Fried.
  • Netflix outlined its long-awaited password-sharing guidelines for users in Canada, New Zealand, Portugal and Spain. Users will be asked to set a “primary location” for their Netflix accounts and will be allowed two “sub accounts” for users who don’t live in that household.
  • Credit Suisse announces acquisition of Klein Group.
  • Boris Johnson has made around GBP5m since leaving No 10.
  • President Zelensky heads to Brussels for more EU assistance.UK trying to find a jet fighter to lend them.

And finally….

The pharmacist walks into his pharmacy to start his afternoon shift to find a guy leaning heavily against a wall.

He asks the blonde customer service attendant . . . “What’s with that guy over there by the wall?”

The blonde customer service attendant responded: “Well, he came in here this morning to get something for his cough.

I couldn’t find the cough syrup, so I gave him a bottle of laxative.”

The pharmacist said: “You can’t treat a cough with a laxative!”

The blonde customer service attendant responded, “Of course you can! Look at him, he’s afraid to cough”

Clarence

XXXX

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