Tuesday 23rd May – Australian Market Wrap | Beeks Downunder-Because not all financial news is boring!

ASX 200 closed down 3 points to 7260 (-0.1%) in a narrow day of trade. Financials bounce back, recovering yesterday’s losses. The Big Bank Basket up to $171.34 (+0.6%) MQG, the biggest winner climbing 2.1%, CBA, NAB, ANZ, and WBC all with modest gains +0.6%, +0.4%, +0.8%, and +1.0% respectively. Tech Rally continues, All-Tech Index gained another 0.3%. WTC had a wild day, shares hit a record high of $74.46 today, making WTC the largest listed software company on the ASX before closing down 0.1%, SQ2 gained 4.5%, and XRO up 0.9%, marking the fifth day of consecutive gains. REITS found support, GMG up 0.7%, SCG up 0.4% and MGR stronger 0.9%. Energy stocks did well again today, as oil firms and demand outlook improves, WDS +0.3%, STO +0.3%, and BPT +0.4%. Base metals and Resources were broadly lower, S32 down 0.5%, BHP down 0.9% and FMG off 0.5%. Lithium stocks were mostly down, MIN -1.0%, PLS -0.8%, but AKE rose 0.8%. Travel stocks were hammered, QAN -2.2% triggered a broad sector sell-off, despite forecasting a record underlying pre-tax profit in FY23. Healthcare and Insurers mixed. CSL +0.6%, SHL -3.0%, QBE +1.4%, while NHF fell 0.8%. Gold sector down for the sixth day in a row, falling 1.2%, NCM -1.9%, NST -0.8%, and EVN off 1.3%. In corporate news, NAB lifts mortgage rates up 0.1% on new home loan customers, 29M fell 3.3% on updates to guidance, and OFX surged +20.1% on record results, NOI up 45.6%. In economic news, Judo Bank PMI data out today, the manufacturing PMI reached an eight-month high of 50.8 in May, the services PMI down to 51.8 in May, fell from 53.7 last month, and the Australia Composite PMI was above 50, coming in at 51.2 in May falling from 53 in April. Asian markets eased with Japan down 0.7%, HK down 0.7%, with China off 0.9%. Australia 10Y yield up to 3.65%. Dow Jones futures up 26 points and Nasdaq futures up 27 points.

HEADLINES

Winners: PMT, MAF, PDN, SQ2, NHC, TAH, APM
Losers: BRN, A4N, SYA, WAF, PPC, VUL, ASB
Positive sectors: Banks. Insurers. Oil and gas. REITs
Negative sectors: Iron ore. Base metals. Gold miners. Travel.
High 7288 Low 7260 Low volume and low conviction.
Big Bank Basket: Rallies to $171.34 (+0.6%)
All-Tech index: Up 0.3%
Gold slips to $2950
Bitcoin: Firms to US$27393
Aussie Dollar: Steady at 66.46c
10-Year Yield: Pushing higher to 3.66%.
Asian markets: Japan down 0.7%, HK down 0.7%, with China off 0.9%.
US Futures: Dow up 26 Nasdaq up 27. Earlier rally fades.

MAJOR MOVERS

PMT +6.8% back in favour.
MAF +5.7% good move higher.
PDN +5.3% Uranium stirring.
OFX +20.1% results cheer
ZIP +12.7% nesting higher on regulatory certainty and broker PT.
SLA +12.3% new bidder enters the fray.
HAS -6.6% metals sliding.
BRN –17.7% AGM comments too honest it seems. First strike too.
VUL -4.8% placement weighs.
ELD -4.3% Ex-Dividend
Speculative Stock of the Day: Westar Resources (WSR) +54.0% Resumes after please explain from ASX. Good volume and a good move. The maiden RC program intersects Pegmatites at Olga.

COMPANY NEWS

National Australia Bank (NAB) – Increased variable rates by 0.1% for new home loan customers. This decision follows NAB’s removal of its mortgage cashback offer and is part of an effort to prioritise profits over volume growth.
St Barbara’s (SBM) board says it will not engage with Silver Lake (SLR) on its offer to buy the company’s Leonora assets.
Turners Automotive (TRA) – Reported a 13% increase in revenue, reaching NZ$389.6m, while its NPAT rose 4%.
29Metals (29M) – Revised Capricorn Copper mine forecasts between 514 and 584Kt of ore mined. The company had previously withdrawn its initial 2023 guidance due to extreme weather events and the temporary halt of operations pending recovery planning.
Qantas (QAN) – Anticipates a record underlying pre-tax profit of up to $2.48bn. Plans buyback of an additional $100m in shares. QAN expects flying activity to reach 93% of pre-COVID-19 levels by December but warns of a supply-demand imbalance, leading to elevated airfares on international routes for the foreseeable future.
Regal Partners Ltd (RPL) – FUM up 17% to $5.5bn. NPAT of $18.2m for the six months to December 2022.
Healius Ltd (HLS) – HLS board has reviewed ACL’s Second Supplementary Bidder statement and recommends that shareholders reject ACL’s unsolicited takeover offer.
TechnologyOne (TNE) – Reported a 40% increase in SaaS ARR and a 24% rise in Profit After Tax for H1. TNE aims to surpass $500m in Total ARR by FY26.
OFX Group Ltd (OFX) announced record FY23 results. NOI up 45.6%, driven by revenue growth and good margin management, while underlying EBITDA reached $62.4m, a 40.3% increase.
NUIX Ltd (NXL) – Acquired automation partner Rampiva, a workflow automation and job scheduling software provider.
IDP Education Ltd (IEL) – Acquired The Ambassador Platform, a UK-based technology company that offers a SaaS platform enabling higher education institutions to connect current students with prospective students.
Westgold Resources Ltd (WGX) – Drilling results at the Great Fingall gold deposit in WA have confirmed a revealed the presence of two parallel reefs beneath the historic workings. The assay results from the new positions are outstanding, with significant gold intercepts.
Silk Laser Australia (SLA) – Received a competing non-binding proposal from EC Healthcare to acquire 100% of the shares at an offer price of $3.35 cash per share. WES has until 30th May to respond.
Catapult Group International Ltd (CAT) – Reported 2H EBITA of US$2.2m, a US$15.4m improvement from H1, operating cashflow +40% YoY to US$3.7m, and H2 gross margin rebounds to 81% from 71%.
Energy World Corporation Ltd (EWC) – Completes sales of Sengkang Power Plant to PLN Nusantara. Further information to come once 4D report and half-year accounts are released to the market.

ECONOMIC & OTHER HEADLINES

Redundancies will be offered to up to 4000 Victorian public servants. Cuts would be made by reductions to consultants and contracted labour hire and cuts to marketing and communications, human resources and finance functions. The cuts come after employee expenses rose by more than $7bn, or 27%, during the pandemic.
Judo Bank Australia Composite rose to 51.2 in May, falling from 53 in April, marking the second consecutive month of expansion in the private sector.
Judo Bank Australia Manufacturing PMI remained unchanged at 48 in May 2023, indicating a third consecutive month of deteriorating business conditions in the manufacturing sector.

Judo Bank Australia Services fell to 51.8 in May, down from 53.7 in April, signalling a second consecutive month of expansion of the Australian service sector.

ASIAN MARKETS

Japan’s manufacturing PMI rose to an eight-month high of 50.8 in May, returning to growth, marking the first expansionary activity since last October.
Record unemployment among China’s young people stems partly from a mismatch between their majors and available jobs, Goldman Sachs analysts said.

US AND EUROPEAN HEADLINES

European markets opening down round 0.2%
Biden and McCarthy met for an hour and have acknowledged that a main sticking point in the talks remains the question of ‘mandatory spending caps’.
Biden urges Republicans to ditch ‘extreme’ stance as debt talks resume
JPMorgan plans ‘unmatched’ US$15.7bn spending spree on new initiatives.
Bo Young Lee, the Uber ‘Head of Diversity’ was suspended after an attempt to address staff uproar over a company event about race titled “Don’t Call Me Karen” backfired.
Republican Tim Scott officially joins 2024 presidential race.

And finally….

My French mate doesn’t believe eggs are round.

He’s a member of the flat oeuf society