The ASX 200 rallied 33 points to 7279 (+0.5%), bouncing back from 7,232 lows following the RBA’s decision to hold rates at 4.1%. The Aussie dollar fell 0.2% to 66.58c, and the 2Y yield was virtually unchanged, up 1bps. Gold miners are happy, buoyed by stronger bullion prices. EVN up 1.8%, NST gained 1.6%, NCM up 1.2%. Iron ore miners mixed as US manufacturing PMI fell, and optimism was buoyed by the RBA, BHP lower 0.1% and RIO down 1.2%. Lithium was mostly up as PLS gained 2.2% and SYA rose 3.0%. Base metal stocks rose on the back of higher copper prices overnight. Banks had a good day. Big Bank basket closed up at $174.87 (+1.3%), led by CBA up 1.3% and NAB up 1.3%. Energy stocks were in demand thanks to Saudi Arabia and Russia cutting oil production, sending prices higher, WDS up 1.4%, WHC gained 2.4%, and BPT rose 1.1%. Healthcare under pressure, RMD down 1.3% and SHL off 0.8%, while insurers found support QBE gained 1.0% and MPL up 1.7%. In corporate news, CGC jumped 12.8% after receiving a takeover bid, EMR up 5.9% on gold discovery, SUN gained 0.6% despite announcing the cost of reinsurance premiums to increase more than $250m in FY24, IVC down 0.2% after extending TPG exclusivity offer, and SLR gained 5.8% on record quarterly sales results. In economic news, the RBA decided to leave the cash rate unchanged at 4.1%. Further tightening may be required, but the decision to hold provides the board more time to assess the state of the economy. Asian markets down. Japan down 0.6% on profit-taking, while HK is on track for a third consecutive day of losses, down 0.1%, and China off 0.2%. Australia 10Y yield up to 4.0% after a steep fall on the pause announcement. Bitcoin down 0.33%. Dow Jones futures down 10 points and Nasdaq futures down 18 points.

HIGHLIGHTS

• Winners: ASB, CGC, GQG, SLR, CTT, RMS, VUL
• Losers: LRS, A4N, WBT, DHG, RDX, DTL, TUA
• Positive sectors: Banks. Insurers. REITs. Oil and gas. Lithium.
• Negative sectors: Iron ore.
• High 7286 Low 7232. RBA stays its hand.
• Big Bank Basket: Better at $174.87 (+1.3%)
• All-Tech index: Unchanged.
• Gold Higher at $2894
• Bitcoin: Better to US$31,049
• Aussie Dollar:  Better at 66.66c
• 10-Year Yield: Steady at 4%
• Asian markets: Japan down 0.6% HK down 0.1% and China down 0.2%.
• US Futures: Dow down 10 Nasdaq down 18
• European markets expected to open flat. US closed.

MAJOR MOVERS

• CGC +12.8% NBIO at 350c from Paine Schwartz.
• ASB +12.9% ship ahoy!
• GQG +8.5% fund managers back in fashion.
• CTT +6.0% luxury is the way to go.
• SYA +2.7% positive announcement with 30kt lithium concentrate.
• DRO +17.8% another drone order.
• HAS +12.3% bounce continues.
• M7T +10.2% broker upgrade.
• SLR +5.8% 4Q and FY23 sales results.
• PLS +2.2% hits highs and takes a breath.
• PYC +29.0% first patient dosed with new eye treatment recently.
• LRS -8.70% profit taking.
• WBT -3.5% easing back.
• DHG -3.7% coming off highs.
• IPO of the (yester) Day:Redox (RDX) -4.1% Fails on second day.
• Speculative Stock of the Day: Lumos (LDX) +112.3% kicks again after FDA approval yesterday. AT1 +130.6% joins the party as it is a supplier of its integrated test platform technology.

COMPANY NEWS

• Nib Holdings Ltd (NHF) – Acquired NDIS marketplace platform Kynd. Terms undisclosed.
• CSR Ltd (CSR) – Plans to acquire Woven Image for $43m. As a result of this acquisition, CSR’s on-market share buyback, which was announced in June 2022, will be concluded this month.
• Magellan Financial Group (MFG) – Kristen Morton, the CFO, has resigned from her position on the board of the company. However, she will continue to serve as the CFO and COO at Magellan.
• Suncorp Group (SUN) – Anticipates a 12% increase in the cost of reinsurance premiums for the 2024 financial year, amounting to over $250m. This rise is attributed to a “hardening” global reinsurance market and the impact of adverse weather events associated with the La Niña cycle. Suncorp aims to maintain an underlying insurance margin within a 10 to 12% range.
• Emerald Resources (EMR) – Exploration at Bullseye Mining’s North Laverton Gold Project in Western Australia continues to find significant gold mineralisation while are also making progress at the Memot Gold Project in Cambodia.
• InvoCare Limited (IVC) – Extended TPG’s exclusivity period and is progressing due diligence for TPG’s proposed acquisition of the company.
• Silver Lake Resources (SLR) – Achieved a record quarterly sales result of 83,540 ounces, contributing to a total of 260,370 ounces for the fiscal year 2023, in line with annual guidance.
• Costa Group Holdings Ltd (CGC) – Confirmed receipt of non-binding indicative (NBIO) takeover proposal from Paine Schwartz Partners at $3.50 a share cash.
• Melbana Energy Ltd (MAY) – Maiden estimate of prospective resources completed for Hudson prospect and advises that it has identified carbonated buildup within licence areas.
• Delta Lithium (DLI) – Reported further exceptional drilling results from the Yinnetharra Lithium Project in Western Australia. Delta Lithium has completed 240 drill holes to date and plans to complete approximately 100 more by September 2023.
• Paradigm Biopharmaceuticals (PAR) – Provided an update on its PARA_OA_002 phase 3 clinical trial for knee osteoarthritis (OA). Stage 1 recruitment has been completed, and participants are undergoing screening and randomisation.
• Partners Group Global Income Fund (PGG) – Explanatory Memorandum released outlining a proposal to transition from a listed investment trust to an open-ended unit trust.

ECONOMIC & OTHER HEADLINES

The RBA held its cash rate at 4.1%, its second pause of the year, in a decision predicted by 19 of 32 economists.

• Inflation in Australia has passed its peak and the monthly CPI indicator for May showed a further decline. But inflation is still too high and will remain so for some time yet.

• The board is still expecting the economy to grow as inflation returns to the 2%  to 3% target range, but the path to achieving this balance is a narrow one.
• Some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe, but that will depend upon how the economy and inflation evolve. “The board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that.”

RBA Statement in full. Click here.

• Aussie Dollar dropping to 66c after RBA decision.

• Aussie 10-year yield closing steady after dropping gains after RBA decision. 

ASIAN MARKETS

• China said the new licensing system for exports of gallium and germanium, along with their chemical compounds, was aimed at protecting national security. Same with Biden’s policies.
• India, China and Russian leaders have a ‘Zoom Diplomacy’ meeting. India hosting. Interesting that Modi is just back from dinner with Biden.
• China’s biggest state banks are offering local government financing vehicles loans with ultra-long maturities and temporary interest relief to prevent a credit crunch.
• China attacks Japan’s planned release of Fukushima nuclear disaster wastewater.
• Toyota says solid-state battery breakthrough will halve cost and size.

US AND EUROPEAN HEADLINES

• US Markets closed. July 4th Weekend flights break records.
• Meta poised to launch rival to Twitter with its new ‘Threads’ platform, linked to Instagram.
• Sainsbury’s results out in in UK. Sees food inflation starting to fall. Confirms outlook.
• The Orkney islandsoff the northeast coast of Scotland are looking at ways it might split off from the U.K. and potentially become a self-governing territory of Norway. Orkney was under Norwegian and Danish rule until the late 15th century, when the islands were handed to Scotland as security for the wedding dowry of Margaret of Denmark in her marriage to King James III of Scotland.
• Sage advice from Toto Wolff, “when you win, have no sense of entitlement… Respect and don’t think that this is going to continue forever. Be humble about it.”

And finally….

Just seen an advert on the TV for coconut shampoo…

Who the hell washes a coconut!?

Clarence

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