ASX 200 sank another 64 points to 7347 (0.9%) as US markets weighed and Phil Lowe spent another day in a hairshirt. Losses across the board,the  Banking sector still beyond underwhelming. CBA lost 0.5% and NAB was sold off hard down 2.2% with the Big Bank Basket down to $178.27 (0.8%). Elsewhere in financials, MQG’s crown slipped down 2.6%, MFG gave back some gains off 2.9% and GQG fell 4.5% and the insurance sector rallied on higher yields and a surprise, this time a good one from QBE up 7.4%. Industrials sold off, with interest rate sensitive stocks under pressure, GMG down 1.7%, TCL off 0.6% and even gaming stocks easing, ALL down 2.3% and TLC off 4.7%. Healthcare in retreat, CSL down 1.5% and COH fading 0.7%. Tech on the nose after Nasdaq falls, WTC down 3.6% on its biggest acquisition yet in railway logistics, XRO sold off down 5.6% and the All–Tech Index down 2.1%. Platform stocks missed the train, REA down 1.7% and CAR falling 1.4%. Resources were pummelled, Lithium stocks depressed, PLS down 5.3% and off lows, IGO fell 3.6% and AKE off 3.7%. Second liners all down, gold miners were mixed but uninspiring, oil and gas down on crude falls, WDS off 1.4% and STO falling 2.3%. Coal stocks too weakened. In corporate news, results again the feature, A2M up 6.3% on a SAMR audit update, BBN screaming blue murder falling 6.1% on results and losing its CEO, LFS fell 4.8% and its CEO set to leave too. On the economic front, plenty from RBA chief and the banks generally on looming cliff exposure. Asian markets weaker and 10-year yields pushing up again to 3.81%. Dow futures down 90 points and Nasdaq futures down 76 points. 

HEADLINES

• Winners:  QBE, A2M, CTD, GUD, SM1, KMD, IMU
• Losers:  IDX, PWH, SQ2, MSB, SWM, NHC, CIP, XRO
• Positive sectors:  Iron ore just..
• Negative sectors: Everything else.
• High 7414 Low 7347
• Big Bank Basket: Down to $178.27 down 0.8%
• All-Tech index: Down 2.1%
• Gold up to $2669
• Bitcoin: Slips to US$23812
• Aussie Dollar: Falls to 68.54c
• 10-Year Yield: Higher at 3.81% on Lowe grilling.
• Asian markets: Heads lower with Japan off 0.7%, HK down 0.5% and China off 0.5% too.
• US Futures: Dow down 90 points Nasdaq up 47

MAJOR MOVERS

• QBE +7.39% surprise result.
• A2M +6.29% update on SAMR audit process.
• CTD +4.5% brokers back on board.
• SUL +3.2% kicks higher perhaps on BAP numbers.
• ORA +3.0% upgrades.
• ORG +1.74% book squaring.
• GUD +4.47% still good.
• PMT +7.39% Macquarie talking it up.
• PNR +3.39% end of bad week bounce.
• BBN -6.10% dummy spit.
• MNS -6.90% iM3NY update.
• MSB -7.18% slipping away.
• GQG -4.50% performance anxiety.
• WHC -5.15% NHC -5.80% not such a merry old soul.
• IDX -14.97% half yearly results.
• SQ2 –7.76% BNPL changes perhaps?
• SPECULATIVE STOCK OF THE DAY – Megado Minerals (MEG) +34.88% Reinstatement to quotation. Lithium project acquisition in James Bay Quebec.
• Above Average Volume – MEG, CIP, PFG, HIT, CLT, 8IH

COMPANY NEWS

• Deterra Royalties Ltd (DRR) – Reported royalty revenue up 4% to $96.4m and an EBITDA of $91.7m with a fully franked interim dividend of 12cps declared representing 100% of NPAT for 1H23. Additionally, the South Flank project remains on track, and Mr Jason Neal was appointed as a Non-Executive Director.
• GQG Partners Inc (GQG) had positive net inflows of $8bn and funds under management of $88bn at year-end 2022, with net revenue up 9.8% to $436.8m and net operating income up 2.7% to $332.1m; the Board declared a quarterly interim dividend of $0.0187 per share, representing 90% of distributable earnings for Q4 2022.
• Inghams Group Ltd (ING) announced its 1H23 results, which showed NPAT down 55.5% and EBITDA down 10.6% on pcp, core poultry volume grew by 3.2%. The company also extended its debt facilities for a further 2 years and paid an interim dividend of 4.5cps.
• Latitude Group Holdings Ltd (LFS) reported its 1H23 results. Statutory NPAT of $57.9m, and cash NPAT of $153.5m down 23% on pcp; the company maintained a strong balance sheet with prudent provisioning, $1.3bn of funding headroom, and a risk-adjusted income yield of 8.98%, although rapidly rising funding costs led to the dividend being adjusted to 11.85cps fully franked for growth stance, and the company’s cash operating expenses were down 9%. Ahmed Fahour will also be stepping down in April and Bob Belan will take over as CEO.
• Abacus Property Group (ABP) reported its 1H23 financial results, revealing a group statutory profit of $84.0m, down 73.2% from HY22. The company’s Funds From Operations (FFO) increased by 0.4% to $81.4m, thanks to its investments in core Commercial and Self Storage sectors, which contributed to higher quality and more resilient income streams. The Self Storage portfolio delivered 25% growth in net property rental income, while the Commercial portfolio grew by 6%. Abacus acquired eight new assets and completed four projects during the period.
• Meridian Energy Ltd (MEZ) has released its monthly operating report for January. National hydro storage down from 116% to 111% of historical average, with South Island storage decreasing to 103% and North Island storage increasing to 166% of average by 14 Feb 2023. The report also highlights below-average inflows for the month and the lowest January inflows on record, as well as a 1.2% decrease in national electricity demand compared to the same month last year.
• Internal Diagnostics Ltd (IDX) has reported its results for 1H23, with a statutory NPAT of $16.1m up 58.2% on pcp, representing an above-market organic revenue growth of 4.1% in Australia, and an operating EBITDA of $39.8m, with a fully franked interim dividend of 2.5cps being a payout ratio of 74.4% of operating NPAT. The group has experienced challenging trading conditions due to significant cost pressures, higher labour costs driven by inflation and labour market supply constraints, and higher interest funding costs, while continuing to focus on reducing costs wherever possible.
• QBE Insurance (QBE) – Usually a surprise to the downside, QBE has surprised higher this time. Stautory Net Profit after Tax of $770m compared with $750m in FY21. Adjusted cash profits of $847m from $805m the previous year,. Cash return on Equity 10.5% up from 10.3%. Strong premium growth and renewal rate increases of 7.9%. Gross Written Premium Growth of 13%. Full Year dividend totalled 39c representing a 49% payout ratio. Final dividend declared at 30c. QBE has forecast that gross written premiums, measuring changes in customer numbers and pricing, will grow in the mid-to-low single digits for 2023, after stripping out currency fluctuations. QBE’s results showed that in North America and other regions, premium renewals, while still high, were down on the previous year. Its net cost of catastrophe claims, which include the Russian costs, increased to $US1.06bn or 7.2% of net earned premium, compared with 6.6 % in the prior period.
• Wisetech Global Ltd (WTC)has acquired Blume Global, a provider of intermodal rail solutions in North America, for US$414m. Blume is expected to generate FY24 revenues of US$65m to US$70m and WiseTech will fund the acquisition using a mix of cash, debt, and new WiseTech Global shares.
• Sayona Mining Ltd (SYA) announces they are on track and on budget for the March 2023 restart of lithium production at its North American Lithium operation in Quebec, Canada. The company is also making progress towards the concentrator restart and construction progress, with procurement completed, and all major procurement packages received on site.

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ECONOMIC & OTHER NEWS

• Westpac has warned that almost half of its $471bn in home loans were written using interest rate buffers that are set to be exceeded. In an update, WBC said that $212bn of its home loans, or around 45%, were made assuming interest rates will end up at a lower level than they will be according to the RBA tightening cycle. The good news is that bad debts remain low. Westpac said it had experienced only a small increase in the number of mortgage borrowers who were more than 30 days late on repayment. Westpac also pointed to the fixed rate refinancing “cliff” as being prolonged, saying $56bn of fixed-rate loans will expire in the second half of 2023, and a further $57bn in 2024, then $30bn in 2025.

RBA governor Phil Lowe has faced another grilling today. Some of the highlights:

• About $350bn in low-interest fixed rate loans will switch to higher variable rates this year, RBA governor Philip Lowe says.
• Lowe warned the borrowers servicing 880,000 fixed rate loans “face very significant increases” in repayments this year when they switch to much higher variable rates.
• He also admitted the ‘Barrenjoey lunch’ was a mistake and says further rate rises will be necessary in coming months to get inflation back to the central bank’s target.
• He talked about a narrow path in Australia for cooling the economy without crashing it as long as inflation and wage exit expectations remain contained. Fewer than 0.5% of borrowers are in negative equity, Reserve Bank assistant governor Brad Jones said. Loans written during the pandemic had relatively low loan-to-value ratios by historical standards.
• High demand and a lack of accommodation, not interest rates, is what is driving rents up, Lowe has said.
• He also chided banks for not passing on rate rises to savers quickly enough and encouraged people to shop around for a better rate on their deposit account.

ASIAN MARKETS

• Adani halts $847m acquisition of coal-fired power plant in India.
• China Renaissance said it “has been unable to contact Mr. Bao Fan,”  the stock plunged 20% after the founder went AWOL.
• China to scrutinise CATL – Ford deal.

US AND EUROPEAN HEADLINES

• Americans have nearly $1 trillion in credit card debt. Student debt is close to US1.8 trillion. Government debt is now at US$31bn. Pretty soon we are going to be talking big numbers.
• US top official to visit Taiwan. Should raise the tensions and the temperature a little.
• AI Testers have discovered an “alternative personality” within the Bing chatbot called ‘Sydney’. The jounalist testing had a very scary chat to ‘Sydney’, ‘Sydney’ later tried to convince him that he should leave his wife for Bing. The tester said that he didn’t trust ‘Sydney’ and this is the reply he got

• Never going to have that conversation with AGL!