The ASX 200 started the week down 21 points to 7079 (-0.3%), hitting 7,054, its lowest level in three months weighed down by losses in banking and mining stocks. Oil and gas stocks mixed despite strength in the oil price, KAR -0.5% and STX -1.1%, while BPT edged higher, up 0.4%. Iron ore giants BHP, RIO and FMG all fell 0.3% each. Gold miners rallied on bullion’s strength and a weaker US dollar. NCM +1.2%, NST +2.0%, and EVN +1.5%. Tech stocks mixed, XRO +1.7% CPU -1.3%, while WTC gained 0.6%. All–Tech Index up 0.1%. All banks closed in the red. NAB the worst performer of the big four, down 0.8%. Big Bank Basket fell to $166.95 (-0.5%). REITS better as bond yields fell. SCG up 1.0%, and VCX up 0.3%. Travel stocks continue their decline as oil prices rose QAN down 2.3%, and AQZ off 1.8%. In corporate news, CTD -0.8% awarded a four-year travel management contract with the federal government, VNT +1.4% secured a five-year maintenance contract with the Department of Defence, APX tumbled 12.3% after CFO Helen Johnson resigned abruptly, MTS +4.7% on good results, LRK fell 16.3% on downgraded sales forecast, and E25 jumped 5.0% after they secured a manganese sulphate supply deal with General Motors. Nothing significant on the economic front. Asian markets down, Japan down 0.2%, HK off 0.3%, and China down 1.4% hitting its lowest levels in over five months. Australian bond yields down, 10Y yield down 4bps to 3.95%, and 2Y yield down 7bps to 4.12%. Bitcoin down 0.63%. Dow Jones futures up 44 points and Nasdaq futures up 19 points.

HIGHLIGHTS

  • Winners: AZS, CTT, WGX, PMT, CMM, RMS, MTS, SLR
  • Losers: PRN, LRS, SYR, LLL, WBT, IMU, MSB
  • Positive sectors: Gold miners. REITs.
  • Negative sectors: Banks. Iron ore. Insurers. Healthcare.
  • High 7100 Low 7055.
  • Big Bank Basket: Lower at $167.86 (-0.5%)
  • All-Tech index: Unchanged.
  • Gold Better at $2883
  • Bitcoin: Steady at US$30,226
  • Aussie Dollar: Slips to 66.83c
  • 10-Year Yield: Steady at 3.96%.
  • Asian markets: Japan down 0.2% HK down 0.3% and China down 1.4%
  • US Futures: Dow up 44 Nasdaq up 19.
  • European markets are expected to open a little higher.

MAJOR MOVERS

  • AZS +12.6% change of director’s interest. Recent high-grade intersections at Andover.
  • WGX +6.7% June corporate update.
  • PMT +5.0% answers media speculation on M&A.
  • RMS +4.9% SLR +4.3% gold miners favoured.
  • CTT +7.1% luxury is continuing to buck trend.
  • MTS +4.7% results cheer.
  • SLA +17.7% WES’API bids 335c.
  • DDH +6.4% bid from PRN -9.8%
  • DRO +11.6% Ukraine boost.
  • LRS -8.9% profit taking.
  • LLL -5.3% profit taking.
  • WBT -4.8% profit taking.
  • LRK -16.3% sales downgrade.
  • APX -12.3% CFO resigns.
  • BET -11.5% sliding again.
  • MSB -4.3% profit taking.
  • Speculative Stock of the Day: Metal Hawk (MHK) +112.6% good volume and thick high-grade rare earths discovered in maiden drilling at Fraser South.

COMPANY NEWS

  • Lark Distilling (LRK) – Revised its sales forecast for the second half of 2023 to $7.4m, down from the previous period’s $9.6m. The company’s full-year sales estimate for FY23 is approximately $17m.
  • Capricorn Metals Limited (CMM) – Reduced its gold hedge book by 51,000 ounces, providing additional exposure to the increase in the A$ gold price. The closure of the hedging contracts eliminates delivery obligations until September 30, 2024.
  • Cromwell Property Group (CMW) – Announced dividend of 1.375cps with Ex data 29/6/2023.
  • SILK Laser Australia (SLA) – Agreed to be acquired by Australian Pharmaceutical Industries (API), part of WES, in a cash deal worth $3.35 per share. SILK’s board unanimously recommends the scheme and highlights the significant premium and certainty of value for shareholders.
  • GR Engineering Services Ltd (GNG) – GR Engineering subsidiary Upstream Production Solutions awarded a 5-year O&M contract for the Moranbah gas plant with estimated revenue of $30m/annum.
  • Westgold Resources Ltd (WGX) – Provided June update. Reiterated benefits of its Musgrave takeover proposal. On track to deliver FY23 production guidance.
  • Pantoro Limited (PNR) – Announced that the High Court in the UK has approved the takeover scheme for the acquisition of Tulla Resources Plc (TUL). Under the scheme, TUL shareholders will receive 4.9578 ordinary shares in PNR for each TUL share held.
  • Galan Lithium Ltd (GLN) – Granted initial 1 HMW development permit. Full construction permits and commencement of Phase 1 construction expected during Q3 CY 2023.
  • Genesis Energy Limited (GNE) – Offering NZ$240m of 30-year unsecured, subordinated green capital bonds to New Zealand investors, with an indicative margin range of 1.95% to 2.15% per annum.
  • Perenti Limited (PRN) – has agreed a scheme of arrangement with DDH1 (DDH). The terms give DDH shareholders 12.38c in cash and 0.7111 Perenti shares.  Shareholders can elect to have more cash or more scrip, up to a cash pool of $50m. DDH will end up with 29% of the combined entity.

ECONOMIC & OTHER HEADLINES

  • Cboe (the artist formerly known as Chi-X) is looking at making more inroads into the ASX territory. The CEO has said the tech transformation meant it could now handle “every share traded on the ASX and more”. Cboe currently has about a 19% share of continuous cash equities trading in Australia across about 50 different stockbrokers registered as market participants.
  • CBA said some customers are experiencing difficulties accessing services digitally.
  • Australia to send Ukraine US$74m package of vehicles and ammunition.

ASIAN MARKETS

  • China’s travel spending during the Dragon Boat festival holiday fell short of pre-Covid levels, underscoring the slowdown in consumption.
  • Domestic tourism revenue reached 37.3bn yuan ($5.2bn) over the period, 94.9% of the amount recorded in 2019 before the pandemic, according to a statement from the Ministry of Culture and Tourism. There were 106m domestic tourism trips made, surpassing the same period in 2019 by 12.8%.

US AND EUROPEAN HEADLINES

  • Relative calm in oil markets after aborted Russian coup contained.
  • Global oil demand will rise to 110m barrels a day in two decades, bringing the world’s energy demand up 23%, said OPEC.
  • OPEC’s secretary general added that underinvestment in the oil industry will only challenge the viability of current energy systems and lead to an “energy chaos.”
  • Kyriakos Mitsotakis wins by a landslide in Greek elections.
  • Corporate defaults rose last month, with 41 in the U.S. so far this year. That’s more than double the same period last year, according to Moody’s Investors Service.

And finally….

Blessed are those who can   
give without remembering
and take without forgetting.

Every morning is the dawn of a new
error.

Clarence

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