ASX 200 closed up 43 points to 7246 (+0.6%), supported by a rise in commodity prices, starting the new financial year off in the positive, extending gains from the previous session. At best ASX 200 up 51 points, at worst down 4 points. The Gold sector performed well today supported by the rise in bullion prices a sign market participants are positioning themselves for a potential rate hike from the RBA tomorrow. Australia’s largest gold miner NCM jumped 2.5% marking its best day in more than four weeks. Tech the worst performing sector today, with the All-Tech Index down 0.6%. Banks also posted some gains ahead of tomorrow’s RBA decision, with rate hikes likely to be paused. ANZ leading the charge, up 0.8% and CBA up 0.7%. The Big Bank Basket is at $172.67 (+0.6%). REITs higher as bond yields steadied.. Resources doing well on commodity prices, Iron ore miners gained, BHP up 0.6%, RIO up 0.7% and FMG up 0.4%. Lithium also up today with LRS and LTR up 7.8% and 0.7%. Healthcare having a mixed day as CSL dropped lower, down 0.4% and RHC gained 0.8%. Energy stocks mixed up as oil prices steadied after record losing run, STO +1%, BPT +1.9% while STX fell 1.1%. In corporate news, PSI down 10.4% after responding to ASX’s query. UMG up 8.6% after accepting an offer to be acquired by Malteries Soufflet at 500c. NWH dropped 1.6% despite their subsidiary being awarded a $973m contract by Northern Star. In economic news, Australia’s building permits rebounded sharply in May surging 20.6% MoM, recovering from a 6.8% fall in April. Job ads in Australia fall 2.5% MoM in June, but on an annual basis job ads fell 10% but remain 45% above pre-pandemic levels. Australian home loans rose 4% in May, reversing a 3.8% decline in April. Lastly, China’s manufacturing growth slows less than expected with Caixin China General manufacturing falling to 50.5 in June from 50.9 in May above consensus of 50.2. Asian markets are up, Japan up 1.4% boosted by tech shares, HK up 1.9% reversing losses from the previous two sessions with China up 1.4% despite underwhelming economic data. Australian bond yields dip ahead of the RBA’s interest rate decision tomorrow. 2Y yield down 17bpd to 4.17%, and the 10Y yield fell 5bps to 3.97%. Bitcoin up 0.3%. Dow Jones futures down 25 points and Nasdaq futures up 8 points.

HIGHLIGHTS

  • Winners: TIE, WGX, CGC, UMG, PRN, LRS, SLR, AGY
  • Losers: PSI, CDA, QAL, INR, IDX, RDX, AZS
  • Positive sectors: Banks. REITs. Oil and gas. Iron ore. Lithium.
  • Negative sectors: Tech.
  • High 7252 Low 7200
  • Big Bank Basket: Better at $172.67 (0.6%)
  • All-Tech index: Down 0.6%
  • Gold Steady at $2879
  • Bitcoin: Better to US$30,701
  • Aussie Dollar:  Better at 66.68c
  • 10-Year Yield: Eases to 3.97%
  • Asian markets: Japan up 1.4% HK up 1.9% and China up 1.4%
  • US Futures: Dow down 25 Nasdaq up 8.
  • European markets expected to open slightly higher around 0.3%

MAJOR MOVERS

  • LRS +7.8% Samba time.
  • UMG +8.6% Kane slots home from close range.
  • WGX +9.4% outbid on MGV.
  • AGY +7.7% Rincon update.
  • LLL +4.2% roaring ahead.
  • ESS +18.1% DVP makes scrip bid.
  • MGV +15.8% scrip bid from RMS.
  • GAL +11.6% follow-up drilling program.
  • MNS +10.7% increases ownership iM3NY.
  • POS +8.11% assay results.
  • MEI +12.2% blasting off.
  • TLS +0.5% JV with Musk’s Starlink for bush internet.
  • PSI -10.4% pulls a Schultz.
  • AZS -5.0% profit taking.
  • SLX -2.0% profit taking.
  • CAT -9.6% eight lives gone.
  • JRV -10.3% completes the institutional offer.
  • IPO of the Day:Redox (RDX) – Fails on first day -5.1%
  • Speculative Stock of the Day: Lumos (LDX) +563.6% US FDA clearance for FebrriDX. The approvals allow LCX to market its Point of Care test in the US.

COMPANY NEWS

  • Cromwell Property Group (CMW) – Sold its 50% stake in its Italy Urban Logistics Fund assets to Value Partners as part of a VC, sale proceeds of $20.5m.
  • Centuria Office REIT (COF) – External portfolio valuations are 70% complete. Value decline of 4.4%, remaining valuations will be undertaken with FY23 results.
  • United Malt Group (UMG) – Agreed to be acquired by Malteries Soufflet for $5 per share, which is a 14% premium to United Malt’s closing share price of $4.40 on Friday.
  • Ramelius Resources (RMS) – Made an off-market offer to acquire Musgrave Minerals (MGV) at a price of 34c per share. Musgrave’s board has unanimously recommended that its shareholders accept the offer. This comes after Westgold Resources (WGX) previous interest in acquiring MGV at a lower offer of 30c per share.
  • Xero Ltd (XRO) – Rod Drury, the founder of Xero, is leaving the company’s board as a non-executive director after 17 years.
  • Kelsian Group (KLS) – Appointed Clint Feuerherdt, its chief executive, as a member of the board in addition to his CEO role.
  • NRW Holdings Limited (NWH) – Announced that its subsidiary Primero Group Limited has been awarded a contract by Northern Star Resources (NST) for the KCGM Growth Project in Kalgoorlie, Western Australia. The contract is valued at approximately $973m, with a scheduled completion date in Q3 2026.
  • Strike Energy (STX) – Due to delays and weather conditions the implementation of Walyering will not occur till Q3/23
  • Telstra (TLS) – Announced a partnership with Elon Musk’s satellite service, Starlink, to offer bundled home phone and broadband services to regional Australians. The collaboration aims to provide unique pricing, plan details, and a modem that supports basic voice calls, with the service expected to be available by the end of 2023.
  • Downer EDI (DOW) – Secured a $540m contract to maintain roads for Hamilton City Council in New Zealand. The contract has an initial term of five years and allows for potential extensions of three years and two years.
  • PSC Insurance Group Ltd (PSI) – Responds to ASX query. Not aware of any information that could explain recent trading activity.
  • Australian Vintage (AVG) – Hired E&P to conduct a strategic review of its $100m business amid challenges in the wine market.
  • European Lithium Ltd (EUR) – Trading halted pending announcing regarding a delay in merger transaction financing.
  • Duxton Water Ltd (D2O) – Launched $44.2m partially underwritten 1-for-4 renounceable entitlement offer at $1.50 per share.
  • Magnis Energy Technology (MNS) – Increased ownership in iM3NY to 73%.

ECONOMIC & OTHER HEADLINES

Building Approvals – The May 2023 seasonally adjusted estimate:

  • Total dwellings approved rose 20.6%.
  • Private sector houses rose 0.9%, while private sector dwellings excluding houses rose 59.4%.
  • The value of non-residential buildings rose 6.6%, while value of new residential building rose 17.1%.
  • The value of total building rose 11.1%.

Housing finance – In May 2023 in seasonally adjusted terms, the value of new loan commitments:

  • for total housing rose 4.8% to $24.9b, after a fall of 1.0% in April. It was 20.5% lower compared to a year ago.
  • for owner-occupier housing rose 4.0% to $16.4b but was 20.2% lower compared to a year ago.
  • for investor housing rose 6.2% to $8.5b but was 20.9% lower compared to a year ago.

ASIAN MARKETS

  • The Caixin/S&P Global manufacturing purchasing managers’ index slipped to 50.5 in June from 50.9 in May.
  • China’s National Bureau of Statistics released data last Friday that showed the country’s official manufacturing PMI coming in at 49.0 in June — compared with 48.8 in May.
  • Business confidence hit an eight-month low, while input prices dropped at their fastest pace in 7½ years.
  • The People’s Bank of China (PBoC) acknowledged the weak demand and sluggish growth that account for the tepid and uneven growth recovery.
  • The au Jibun Bank Japan Manufacturing PMI for June remained unchanged at 49.8, indicating a contraction in factory activity for the fifth time this year.

US AND EUROPEAN HEADLINES

  • Shortened trading day in US. Holiday tomorrow.
  • Apple to make significant cuts to Vision Pro production on complexity issues.
  • European markets are expected to open higher.
  • Yellen heads to China this week.
  • Macron meets ministers to thrash out response to unrest.
  • Netflix to revamp advertising strategy to lure brands and boost revenues.
  • For six years in a row, Finland has ranked No. 1 as the happiest country in the world. The reason for all this happiness. It is called Sisu. It is the determination and fortitude to push forward in the face of adversity and near-impossible odds.

And finally….

Clarence

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