ASX 200 dropped 29 points to 7286 (0.4%), which once again was not too bad considering BHP hit a seven-week low down 3.4% and RIO fell 1.7%. Resources generally were mixed, FMG only modestly lower, lithium stocks rallied slightly, PLS up 5.2% ahead of results tomorrow, and gold miners continued to lose their lustre. Oil and gas stocks slid as crude fell, WDS off 0.6% and STO down 1.3%. Coal miners were mixed WHC down 2.0%. In the industrials green across most sectors, Healthcare doing well, CSL bouncing back, RMD up 1.3% and FPH rallying 1.2%. REITs mixed, SCG up 1.0% and SGP off 1.6%, Tech better, WTC up 4.2% as brokers fell back in love, XRO slipped 1.1%, and the All–Tech Index up 0.6%. Banks fell, CBA rallied 0.7% after ex-dividend yesterday. The Big Bank Basket unchanged at $177.08. MQG off 0.8%, and fund managers down, PPT off 2.8% and MFG falling another 1.3%. Insurers mixed. Utilities pushing up with ORG and APA better. In corporate news, QAN fell 6.8% as record profits and angry customers collided. Plenty of angst but people still flying as have no Joyce.  SGR launched a rescue deeply discounted rights issue and placement to raise $800m. Buys some time. TLG returned after placement falling 14.4%, with SLX tapping shareholders for a cool $100m. In results, Super Thursday saw MPL reveal that customers are sticky and lazy to switch, rising 6.5%, PTM tried hard to sneak in their results last night after hours but fell 16.9% on lack of fees. OBL dropped 6.4% on results and management changes, BGA was creamed falling 7.8% on results, and BKL revealed that customers are spending less on vitamins, dropping 6.8%. APE kicked the lights out again up 9.0% with TLC beating expectations and offered a special dividend. KLS caught the express bus up 5.4%. On the economic front, private capital expenditure rose by 2.2%. Asian markets quiet, Japan closed for the Emperor’s birthday. HK up 0.5%, and China unchanged. Dow futures up 99 points and Nasdaq futures up 107 points. 

HEADLINES

• Winners: APE, QUB, WBT, SIQ, SYA, MPL, MAQ, KLS, PLS
• Losers: PTM, TLG, BGA, QAN, BKL, OBL, JBH, SDR
• Positive sectors: Healthcare. Tech. Lithium. Utilities.
• Negative sectors: Iron ore. Gold miners. Oil and gas. Banks. Staples.
• High 7307 Low 7283.
• Big Bank Basket: Unchanged at $177.08
• All-Tech index: Up 0.6%
• Gold eases to $2676
• Bitcoin: Up to US$24475
• Aussie Dollar: Lower at 68.29c
• 10-Year Yield: Steady at 3.89%.
• Asian markets: Mixed, Japan closed for the Emperor’s birthday. HK up 0.5% and China unchanged.
• US Futures: Dow up 99 Nasdaq up 107. Nvidia results cheers.

MAJOR MOVERS

• APE +8.97% motors show continued strength.
• QUB +8.70% results.
• WBT +7.50% just keeps heading higher.
• MPL +6.49% customers are stickier than some thought.
• CXL +4.23% broker research.
• PLS +5.16% lithium rebound. Results tomorrow.
• SSM +8.46% broker upgrades.
• UNI +8.10% powering ahead.
• HUM -9.68% rattled.
• RED -22.86% completes equity raising.
• ZIP -6.19% comes undone.
• SHJ -18.03% loses its shine.
• PTM -16.89% big bonuses but no fees.
• TLG -14.44% indigestion on placement at 155c.
• BGA -7.78% creamed.
• BKL -6.61% low volume but results weigh.
• QAN -6.80% run hard bit disappointing as fares coming off top.
• OBL -6.44% MD and CEO succession and presentation.
• JBH -5.67% consumer concerns.
• SPECULATIVE STOCK OF THE DAY: Mt Monger Resources (MTM) +47% secures advanced carbonate–hosted REE Nb project in Quebec.
• Above Average Volumes (this can be up or down): MTM, NOR, VEE, ICG, ALO.

COMPANY NEWS

• Rio Tinto (RIO) – The share price has surged over 40% since October despite its 2022 underlying profit dropping by 36%. Production records were broken in its Pilbara iron ore business. See HT for more details on RIO.
• Qantas Airways Limited (QAN) – Underlying PBT of $1.43bn. Net debt declined to $2.4bn. On market $500m buyback announced. Group Domestic delivered underlying EBIT of $915m with flying up 86% of pre-CV19 capacity. International saw an underlying EBIT of $511m. Capacity almost doubled from 31% to 60% of pre-CV19 capacity. Outlook – travel demand is expected to remain strong through FY23 and into FY24. Fares are expected to moderate during 2H23 as capacity increases. Fuel costs FY23 $4.8bn with hedging in pace. No interim dividend. The headline earnings may be a little bit disappointing but buyback may counter that.
• Platinum Asset Management (PTM) – Reported an interim profit that fell short of analyst forecasts, partly because higher bonuses were paid out after strong returns but no performance fees were earned. The asset management firm’s net profit after tax was $37.6m, well below the $46.7m consensus estimate.
• Auckland International Airport (AIA) – Underlying profit has surged 690% YoY to NZ$68m as travel rebounds from the pandemic, with total passengers up to 7.6m, accounting for 71% of the same period pre-COVID. The company has lifted its earnings guidance to between NZ$125m and NZ$145m, with total passenger numbers expected to recover to pre-pandemic levels by 2025.
• Gold Road Resources (GOR) has reported a full-year net profit of $63.7m, up 73.1% YoY due to higher gold prices and better performance from Gruyere. It will pay a final dividend of 0.5c fully franked.
• Qube Holdings (QUB) – Half-yearly NPAT rose 98% to $111.3m, thanks to the contribution from discontinued operations. Excluding that, the net profit was $105.1m, up 45% YoY.
• The Reject Shop (TRS) H1 sales rose 3.5% to $439.7m, with comparable store sales up 2.4%. The board plans to resume paying dividends if second-half trading meets expectations.
• Medibank Private (MPL) – Reported a 5.9% rise in H1 net profit to $233.3m and declared a 6.3c interim dividend; the Medibank hack cost the company $26.2m in non-recurring costs.They have provided $45m for the hack attack.
• IDP Education (IEL) – NPAT increased by 62% to $82m due to a strong rebound in the international education sector, with revenue growing by 26%. As a result, the company declared an interim dividend of 21c, up 56% from pcp.
• Zip Co Ltd (ZIP)- Half-year loss to $242.5m. Sales up 19% to $350.9m. ZIP said it has sufficient cash to reach its target of positive cash EBDTA during financial 2024. Active customers climbed 4% on pcp half to 7.3m on total transaction value up 10% to $4.9bn. Expects an up to 50% improvement in Core Cash EBITDA in H2 vs H1. Importantly group credit losses fell to 1.93% of TTV down from 2.4% in HY22 and is now inside target range.The company will take action to divest or restructure non-core operations. US and ANZ are the focus.
• Atlas Arteria (ALX) reaffirmed its distribution guidance of 20c for H2 2022 and 40c for 2023. The company’s net profit after tax rose to $241m, and it cited an increase in mobility, improved operating conditions, and the acquisition of the Chicago Skyway and the A79 as contributing factors.
• Eagers Automotive (APE) has announced a record underlying operating profit before tax of $405.2m and a statutory profit before tax of $442.2m. The company declared a record fully franked final dividend of 49c and expects strong demand for new vehicles to continue to outstrip supply.
• Regis Resources (RRL) reported a half-year statutory net loss of $30m, citing industry-wide inflationary cost pressures as the reason for underlying EBITDA falling to $197m from $221m. The gold miner expects improved profit and cash flows in the second half of FY23.
• Maas Group (MGH) has reaffirmed its full-year pro forma EBITDA guidance of $150m to $180m after posting $66.1m in the first half. The company’s core markets remain strong, although residential real estate faces headwinds due to interest rate increases. Maas Group declared an interim dividend of 3c fully franked and posted a 62.3% improvement in statutory net profit to $23.7m.
• Nine Entertainment (NEC) – Unsurprisingly challenging advertising markets and rising costs have hurt NEC. Profits fell 11% to $189.5m against a $70m rise in revenue. Half-yearly revenue of $1.411bn, up 5% and a fraction below consensus analyst estimates of $1.412bn. Profits were well below consensus forecasts of $296m. Expenses rose $98.7m across the company. Interim dividend 6c Ex-div 3^rd March. Strong audience and share performance across all businesses both subscription and advertising.
• Blackmores Group (BKL) reported an underlying net profit up 17% to $24.4m, and interim dividend of 87c, up 38%. The company delivered a solid first half result, with sales and earnings growth momentum continuing in Australia/New Zealand and China, offsetting the decline in revenue from the International segment. Underlying EPS up 17% to 125.4c, and Statutory NPAT up 19.6% to $24.3m on pcp. CEO says customers are only spending on vitamins they consider crucial as cost of living pressures bite.
• HMC Capital Ltd (HMU) achieved operating earnings of $24.9m in 1H23 or 8.3cps, with funds management revenues up 54% on pcp, and reaffirmed its FY23 dividend per share guidance of 12 cents, while progressing new fund strategies to drive growth.
• Insignia Financial Ltd (IFL) NPAT was $45.1m, up 67.1% on the pcp, primarily driven by the sale of Australian Executor Trustees Limited. Underlying NPAT down 17.1%, impacted by negative market performance. Dividend of 10.5cps declared franked at 50% paid on 3 April.
• Star Entertainment Group (SGR) reported a loss of $1.26bn due to massive write-downs and regulatory interventions and announced an $800m capital raising to secure financial flexibility and meet anticipated cashflow requirements. The capital raising will include an equity raising of $685m at a deep discount (21%) with a 3 for 5 rights issue at 120c.
• The Lottery Corporation Ltd (LTC) reported revenue of $1,920.2m, up 7.7% on the pcp on a comparable basis, EBITA up 15.8% to $409.4m, and interim dividend declared of 8cps fully franked. NPAT including significant items down 12.8% to $172.9m and EPS of 8.9cps.
• Cleanaway Waste Management Limited (CWY) has reported a statutory net profit of $49m, down 6.7% on the pcp. Underlying net profit of $66.9m. Cleanaway’s net revenue of $1,471m was up 19.6% on the pcp with the full period contribution from SRN and initial four-month contribution from GRL (recent acquisitions). An interim dividend of 2.45cps has been declared.
• MA Financial Group Ltd (MAF) reported record full-year financial results. Underlying revenue up 41% and underlying EPS up 29% on pcp. The group’s AUM is up 13%, and the company’s Finsure managed loans increased by 37% to $91bn. The dividend up 18% to 20cps for the year.
• Nitro Software (NTO) -Potentia Capital has come back with a $2.17coffer for Nitro Software, which it is willing to kick up to $2.20c or $2.25c a share, depending on how much of the register it can win over. Price kickers in play when 75% accept the offer.
• Mineral Resources (MIN) – the company will pay close to $1bn for a share of a lithium hydroxide plant in China. It still has ambitions to build a plant here but its partner Albemarle is concerned about cost blow outs.
• EML Payments (EML) – Trading halt after a letter from the Central Bank of Ireland.

ECONOMIC & OTHER NEWS

Average Weekly Earnings – Key statistics

• Estimates for average weekly ordinary time earnings for full-time adults (seasonally adjusted):
• Increased by 3.4% to $1,807.70 annually to November 2022.
• For males were $2,091.20 (public), and $1,874.40 (private).
• For females were $1,857.50 (public), and $1,573.00 (private).

Private New Capital Expenditure and Expected Expenditure –Key Statistics

• Total new capital expenditure rose by 2.2%
• Buildings and structures rose by 3.6%
• Equipment, plant and machinery rose by 0.6%
• Estimate 1 for 2023-24 is $129.7b. This is 11.1% higher than Estimate 1 for 2022-23

ASIAN MARKETS

• The Bank of Korea paused interest-rate increases for the first time in a year. The central bank kept its seven-day repurchase rate at 3.5%.
• G20 host India does not call a war a war.
• Chinese EV car company Anhui Jianghuai is tasking HiNa Battery Tech to create a new short range sodium ion battery. Sodium-ion batteries, which have a lower energy density than lithium-ion batteries, are generally considered safer because they’re non-flammable and less susceptible to temperature changes. Part of the reason is the high lithium prices but these have come off the top substantially recently.

US AND EUROPEAN HEADLINES

• The value of the US housing market shrunk by the most since the 2008 as the pandemic boom fizzled out. Remember though that in December, the total value of US houses was still 6.5% higher than it was a year earlier.

• Google claims breakthrough in quantum computer error correction.
• Russia and China vow to strengthen ties despite international ‘pressure’
• Nvidia shows quality in results pushing inro AI and the cloud. Data centre is the growth engine up 11% YoY.
• Google is asking cloud employees and partners to share their desks and alternate days with their desk mates starting next quarter.
• Mike Pence says GOP voters will have better choices than Trump in 2024.
• Harry and Meghan will not be suing South Park for the latest episode making fun of them.

And finally….

Clarence

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