ASX 200 finished only down 15 points to 7338 (-0.2%) as BHP fought back as the day wore on. After an initial 2% plus fall, BHP went on the charm offensive and won back the disbelievers, closing down only 0.3%. Resources were back in demand on Mike Henry’s comments on China, lithium stocks bounced hard, PLS up 4.5%, MIN up 3.8% and IGO rising 1.4%. Iron ore miners pushed higher as commodities strengthened in Asia, RIO up 0.8% and FMG picking up the baton up 3.2%. Rare earths and base metals also in demand, LYC up 1.2% and ARU up 9.1%. Gold miners were mixed, NST fell 2.0% and NCM up 0.6%. Oil and gas stocks better, WDS up 0.9% and STO rising 0.6%. Coal stocks eased. Industrials were flat, staples eased, WES down 1.2%, WOW down 0.2% and BXB falling 1.2%. Tech fell, CPU down 1.6% and WTC off 1.2%. The All–Tech index fell 0.8%. Healthcare down too, FPH down 1.2% and RHC off 1.3% ahead of numbers. Banks were soft with CBA down 0.7%, NAB off 0.7% and WBC down 0.7%. The Big Bank Basket falling to $179.08 (-0.7%).  Financials mixed, MFG fell 5.0% and MQG eased 0.2%. Insurers were modestly mixed. Big day for results, BHP talked of optimistic outlook after some misses on the numbers. JLG had a cracker on results and an earnings upgrade, up 13.2%. HUB spoke well on results and rallied 7.7%. CXL signed a MoU with DAC and released results rallying 6.1%. INA fell hard down 13.4%, MND -8.8% talked cost pressures and falling staff. SGP dropped hard on results. COL down 0.9% on results and new female CEO. On the economic front, RBA minutes showed how close the board came to a 50bps rise. Consumer confidence rose slightly. Asian markets – Japan down slightly 0.1%, China unchanged, HK down 1%. 10-year yields steady around 3.83%. DOW futures down 130 points. NASDAQ futures down 45 points.

HEADLINES

• Winners: JLG, ARU, AGY, HUB, RNU, CXL, GRR, INR
• Losers:  IPH, SGP, MCY, GEM, RIC, VEA, SM1
• Positive sectors:  Iron ore. Lithium. Base metals. Oil and gas.
• Negative sectors: Banks. Healthcare. REITs. Tech. Staples.
• High 7341 Low 7297
• Big Bank Basket: Up to $179.08 down 0.7%
• All-Tech index: Down 0.8%
• Gold slips to $2666
• Bitcoin: Rises to US$24977
• Aussie Dollar: Steady at 68.92c
• 10-Year Yield: Steady at 3.83%.
• Asian markets: Japan down slightly 0.1%, China unchanged, HK down 1%.
• US Futures: Dow down 130  Nasdaq down 45. US markets back online
• European markets expected to open slightly lower.

MAJOR MOVERS

• JLG +13.21% positive numbers and upgrade.
• HUB +9.09% results deliver record 1HFY23 numbers.
• AGY +8.82% lithium not so depressed.
• ARU +9.09% pops higher.
• BSL +4.37% bargain hunting
• CXL +6.1% MOU with DAC.
• PLS +4.52% good rebound on research.
• CXO +3.80% even this one rallies.
• NCZ +42.21% Sibanye bids 110c.
• A2B +14.60% taxi – positive results.
• PMT +7.69% speculation of M&A.
• WR1 +8.95% lithium back for at least a day.
• CGS -14.47% trading halt on price query.
• INA -13.42% results disappoint.
• MND -8.81% results underwhelm. Forecast to remain steady. Capacity restrained.
• MFG -4.95% some short term profit taking.
• ALU -5.78% broker downgrades.
• BGL -5.86% Steve Parsons sells 17m shares at 105c.
• PWH -4.18% cooling off.
• SPECULATIVE STOCK OF THE DAY:  Connexion (CXZ) +90.00% on a market update. Its cornerstone OEM customer has agreed to extend the supply of Connexion Platforms to its courtesy transport programs.
• Above Average Volumes (this can be up or down): CXZ, NCZ, MTH, PUA, BLX, ASO

COMPANY NEWS

• BHP Group Ltd (BHP) -0.33% total revenue for the half year was down by 24% to $25.7bn, with revenue from continuing operations down 16% to $25.7bn and profit after taxation from continuing operations down by 24% to $6.5bn. The company’s interim dividend for the current period is US90c fully franked, compared to US150c fully franked for the pcp. EBITA and NPAT expectations missed.
• Austin Engineering (ANG) +1.33% Reported revenue increased by 43% to $114.1m, while net profit rose by 3%, driven by increased demand in the first half of FY23. The company’s improved margins were attributed to the bulk purchase of steel and investment in its Indonesian manufacturing hub.
• Seek (SEK) -1.73% has forecast lower-end full-year guidance for 2023 with $1.26bn revenue, $560m EBITDA and $250m net profit, due to gradual moderation in labour market indicators and job ad volumes.
• Johns Lyng Group (JLG) +13.21% has upgraded its FY23 revenue guidance by 11.2% and EBITDA guidance by 5.5% after strong earnings growth in H1, with forecast sales revenue of $1.146bn and EBITDA of $111.1m due to a record volume of business as usual and catastrophe work.
• G8 Education Ltd (GEM) -3.11% reported a 4.0% growth in revenue to $901.3m for the full-year, thanks to a strong recovery in H2 and disciplined cost management that delivered a 0.2% increase in Operating EBIT to $80.3m and Operating EBITDA up 5.2% to $106.5m. Statutory NPAT down 19.9% to $36.6m due to non-operating expenses. Despite these figures, G8 Education has a positive outlook, with a strong balance sheet, increasing quality standards, and dividends declared.
• Coles Group Ltd (COL) -0.93% has released its financial 1H23 results. Total sales revenue up 3.9% to $20.8bn in the first half, EBIT up 9.9% to $1.1bn. NPAT up 17.1% to $643m. The group also declared an interim dividend of 36cps, up 9.1% compared to pcp. Coles Group maintains a strong, flexible balance sheet with net debt (excluding lease liabilities) of $362m. The company has appointed Leah Weckert as the new CEO to take over from Steven Cain in May. Ms Weckert will be the first female CEO in Coles 109-year history.
• Costa Group Holdings Ltd (CGC) -1.11% announced strong financial results for the full year, with revenue of $1.357bn, NPAT of $30.2m, EBITDA of $214.8m, and a statutory NPAT of $47m. The net debt was $351.7m, with leverage of 2.46x at end Dec ’22, and a final dividend of 5cps, 40% franked, was announced. Costa anticipates an improved weather outlook in 2023, and a recovery in citrus category performance, which is expected to lead to improved performance in 2023, with a strong growth profile in CY24 and CY25.
• HUB24 Ltd (HUB) +7.74% reported a record half-yearly profit for 1HFY23 with underlying NPAT of $26.6m and underlying EBITDA of $49.9m, up 87% and 68%, respectively, from pcp. The company’s total FUA grew to $73.0bn with platform FUA increasing to $55.8bn and PARS FUA of $17.2bn, while platform net inflows for the period from continuing operations were $5.8bn. EPS up 59% to 18.9c and a fully franked interim dividend of 14c, up 87% on pcp, which will be paid on 18th April 2023.
• Calix Ltd (CXL) +6.10% has reported its financial performance. Total revenue and other income up 21% to $12.7m, including a sales gross margin of 30%. The company’s balance sheet and cash position of $88.8m continues to support the acceleration of its commercialisation strategy.
• Judo Capital Holdings (JDO) +4.51% 1H23 profit surged by more than 300% to reach $53.2m, with the underlying NIM up 72bps to 3.56%. This growth was supported by enhanced term deposit margins and rates leverage. The bank also reported gross loans and advances are up to $7.5bn, up by 23%, and a rise in net interest income to $163m, up by 69%. Judo is still on target to meet its FY23 guidance.
• New Century Resources (NCZ) +42.21%  19.9% shareholder Sibanye has bid 110c cash for the company and is buying another 10% in the market at that level. The company has recommended that its shareholders take no action in relation to the unsolicited takeover bid from Sibanye Stillwater.
• CSL -unchanged – European Commission has granted conditional marketing authorisation of Hemgenix for the first gene therapy option for the treatment of severe and moderately severe Hemophilia B in adults without a history of Factor IX inhibitors by a single infusion.

ECONOMIC & OTHER NEWS

ANZ- Roy Morgan Consumer Confidence

• Consumer confidence increased 2.3pts last week to 80.4 after a cumulative fall of 8.7pts over the previous two weeks. Confidence lifted across all five mainland states.

• ‘Weekly inflation expectations’ fell 0.4ppt to 5.1%. Its four-week moving average fell 0.1ppt to 5.3%

• Judo Bank’s Australia’s Manufacturing PMI up to 50.1 in February 2023, indicating a slight expansion. Lower domestic and global new orders led to decreased demand for factory goods, resulting in output decline and easing selling price inflation. Despite this, business confidence increased to a five-month high, and employment grew at an above-average pace as firms remained optimistic about future output expansion.
• Judo Bank’s Australia Services PMI rose to 49.2 in February, marking the fifth month of service contraction but the slowest since October. While Australian service demand declined, international demand and hiring continued, and input cost inflation decreased.

RBA MEETING MINUTES SUMMARY

For the full report click here.

• The RBA considered raising the cash rate by 0.5% at its meeting earlier this month due to concerns about persistent high inflation, but ultimately decided on a 0.25% increase. The RBA reiterated its commitment to returning inflation to the target range while keeping the economy stable.
• Central banks in advanced economies have slowed the pace of policy rate increases due to signs of moderation in inflation and economic activity, as well as the risk of over-tightening.
• Market expectations for policy rates in most advanced economies for the year ahead have remained unchanged since the previous meeting.
• Longer-term government bond yields have declined in most major advanced economies, reflecting declines in longer-term expectations for central bank policy rates and inflation.
• The US dollar has depreciated further on a trade-weighted basis, while the Australian dollar has been supported by positive risk sentiment and higher prices for key commodity exports.
• Domestic monetary policy tightening has not resulted in an exchange rate appreciation due to other central banks also tightening policy, but it will result in lower global inflation than otherwise.
• Housing credit has continued to slow, and housing prices have declined further.
• Business credit growth has also slowed recently, and new loan commitments have declined, indicating a further slowing in both housing and business credit growth in the months ahead.
• The full effects of the interest rate increase are yet to be felt in mortgage payments.
• The RBA noted that the cash rate was lower than policy rates in many other comparable economies. While wages growth remained lower here than elsewhere
• The Board noted that the forecasts for output and inflation had been prepared on the technical assumption of the cash rate reaching around 3.75%.
• The Board is seeking to return inflation to the 2–3% target range while keeping the economy on an even keel.

ASIAN MARKETS

• HSBC reports 4Q pre tax profit of US$5.2bn. Beats estimates.For the full year, reported revenue was $51.73bn, up from $49.55bn in 2021.
• Traffic jumps in major Chinese cities. Congestion in major cities last week was the worst since at least the start of 2022

US AND EUROPEAN HEADLINES

• US markets resume.
• European markets set to open modestly lower.
• Biden heads to Poland.
• Financial leaders of the G7 will meet on Feb. 23 to discuss measures against Russia that will put pressure on it to end the Ukraine war.
• Biden pledges unwavering support for Ukraine.
• Seems he is going to walk alone after all. Liverpool FC owner John Henry calls off sale.

And finally…

The location of your mailbox shows you how far away from your house
you can be in a robe before you start looking like a mental patient.

I think it’s pretty cool how Chinese people
made a language entirely out of tattoos.

Money can’t buy happiness, but it keeps the kids in touch !

Clarence

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