Tuesday 4th April – Australian Market Wrap | Beeks Downunder-Because not all financial news is boring!

ASX 200 rose 13 points to 7236 (+0.2%) surging after the RBA paused on rate rises. Banks saw moderate gains with the Big Bank Basket relatively unchanged at $172.12. MQG rose 1.4% and insurers mixed as ACCC concerns on SUN/ANZ deal took focus. Money managers flip-flopped around. REITs bouncing back hard led by GMG up 1.0% and MGR up 2.4%. TLS had a good day up 0.7% and hit prices not seen since last week. Tech better with XRO up 1.8% and WTC up 1.7% with the All-Tech Index up 0.8%. Staples rose, WOW up 0.6% and COL up 0.7% with industrials generally firm. DMP up 3.2% and TAH doing well up 1.9%. In resources, BHP and other iron ore stocks suffering with the big Aussie down 2.2% and FMG off 0.7%. Lithium stocks eased again as LiCO2 prices remain under pressure in China. PLS off 2.9% and MIN down 1.9%. LTR steady as she goes. Gold miners in the green today as bullion hovered around US$2000. NCM up 3.2% and NST up 3.5%. Oil and gas a little dull but coal a merry old soul with WHC up 5.7%. In corporate news, SEK fell 1.0% after a slight downgrade, MCR recommended shareholders accept the Wyloo 140c cash bid. The founder of SUL announced he was retiring. On the economic front, Phil Lowe keeps rates unchanged as worries about the construction industry may have been a factor. Meanwhile in Asia, Japan up 0.3%, HK down 0.8% and China unchanged. China closed tomorrow for Tomb Sweeping Day. Dow futures down 15 points. NASDAQ futures down 32 points.

HEADLINES

Winners: TER, CTT, WGX, WHC, VUL, RMS, GOR
Losers: ERA, SYR, SYA, CXO, A4N, FPR, LKE, MGX
Positive sectors: REITs. Tech. Gold miners. Healthcare. Staples.
Negative sectors: Iron ore. Lithium.
High 7239 Low 7212 Narrow range.
Oil up around 0.4% in European trade.
Big Bank Basket Unchanged at $172.12
All-Tech index: Up 0.7%
Gold unchanged at $2927
Bitcoin: Rises to US$27898
Aussie Dollar: Better at 67.63c
10-Year Yield: yields ease to 3.26%.
Asian markets: Japan up 0.3%, HK down 0.8% and China unchanged.
US Futures: Dow down 15 Nasdaq down 32

MAJOR MOVERS

TER +9.45% coal stocks in demand.
CTT +5.81% another up day.
WGX +5.77% gold in demand.
DMP +3.16% some short covering perhaps.
QPM +23.81% German supplier collaboration.
AEE +14.29% change in directors’ interest.
PAR – 6.27% demonstrates multiple DMOAD signals on Phase 2 study.
ERA -7.32% capital raise for further remediation.
SYR -6.03% quarterly results conference call.
LKE -4.17% sinking again.
CXO -4.73% lithium on the nose.
NWL -3.36% broker downgrades.
MEI -13.79% capital raising.
JRV -12.82% selling resumes.
PPK -6.12% LIS +27.45% 20 layer semi-solid state lithium sulphur battery news
SPECULATIVE STOCK OF THE DAY: Bezra Gold +40.00% Quarterly report. Bekajang drilling program commences.

COMPANY NEWS

Arafure Rare Earths Ltd (ARU) provides an update on activities related to Nolans Neodymium-Praseodymium Project in the NT. Enabling works are now underway including the establishment and rehabilitation of more than 25 kilometres of site access roads, earthworks for the construction camp, and installation of the fly camp.
Slater & Gordan Ltd (SGH) Allegro takeover bid for Slater & Gordon is now free from all unfulfilled conditions, Allegro’s voting power in SGH now 93.8%. The offer period has been extended to Tuesday 11th April.
St Barbara Ltd (SBM) issues update on Genesis merger. The merger remains subject to the satisfaction of several conditions which must be satisfied prior to the end of 11 July 2023. One of the conditions requires St Barbara’s net debt to be no more than $163.2m at the end of the calendar month prior to the date upon which the second Court hearing for the Scheme will occur.
Mincor Resources (MCR) – The Board of Directors recommends that shareholders accept Wyloo’s on-market takeover offer for $1.40 per share, in the absence of a superior proposal, due to ongoing risks associated with the business and the certainty of immediate cash consideration at a premium to recent trading prices.
Energy Resources of Australia (ERA) – Plans to raise up to $369m through a non-underwritten entitlement offer to fund rehabilitation-related expenditure and repay Rio Tinto Credit Facility. The company’s largest shareholders have provided a pre-commitment to take up entitlements.
Seek Ltd (SEK) has lowered its revenue forecast for FY2023 by $15m to $1.245bn, citing softening job ad volumes. SEK said lower operating costs would offset the revenue shortfall and reiterated its guidance for $560m in EBITDA and $250m in net profit.

ECONOMICS & OTHER NEWS

RBA leaves rates unchanged.

The Board decided to leave the cash rate target and interest rate unchanged at 3.60%.
Monetary policy operates with a lag and the full effect of previous interest rate increases is yet to be felt.
Global inflation remains high, and the outlook for the global economy is subdued with below-average growth expected.
The Australian banking system is strong and well-placed to provide credit to the economy.
Inflation in Australia has peaked, but rents and utilities prices are increasing quickly.
Household spending has slowed due to higher interest rates, cost-of-living pressures, and a decline in housing prices.
The labour market remains tight, and wages growth is continuing to increase in response to higher inflation.
The Board’s priority is to return inflation to target and may require further tightening of monetary policy.
The Board will closely monitor developments in the global economy, household spending, inflation, and the labour market.

Signs of stress are emerging in New Zealand’s housing market which may have implications for our own economy. Mortgages in arrears rose 23% in February from a year earlier to 18,900, according to data released Tuesday by Auckland-based credit bureau Centrix. That equates to 1.29% of overall mortgages, the highest since March 2020. 1.29% though doesn’t seem much.

ASIAN MARKETS

The Bank of Japan should review its yield curve control program under its incoming governor.

US AND EUROPEAN HEADLINES

European stocks head for a slightly higher open.
Teck Resources has rejected an unsolicited offer from Glencore worth around $23bn. It will push ahead with the April 26^th vote to separate the metals and coal division.
Big day for Trump.
Credit Suisse to hold in person AGM today. Will not change anything but a chance to vent.
Google said it’s cutting back on fitness classes, staplers, tape and the frequency of laptop replacements for employees. Google employees who are not in engineering roles but require a new laptop will receive a Chromebook by default. Unlucky. Staplers and tape are no longer being provided to print stations companywide as “part of a cost-effectiveness initiative.”
French skincare giant L’Oréal SA has agreed to acquire luxury cosmetics brand Aesop, which was founded in Melbourne before developing a cult global following, for an enterprise value of $2.53bn. Aesop was owned by Brazilian business Natura which acquired a majority stake in 2013.
Blackstone fund hit by $4.5bn in withdrawal requests despite property pitch.