This was published 4 years ago
And that’s it for another day with Markets Live.
Thanks for your comments and time.
The markets team will be back tomorrow.
Goodnight.
Get our wrap of the day on the markets, breaking business news and expert opinion delivered to your inbox each afternoon. Sign up for The Sydney Morning Herald‘s here and The Age’s here.
The ASX 200 broke a three day losing streak with tech and telco stocks taking the lead, while surging commodity prices continued to support pockets of our resource-heavy market.
As the US and UK government’s announced sanctions on Russian oil, Australia’s listed energy sector continued to rise, up 25 per cent so far this year, helping the ASX to repeatedly defy weak leads and outperform global markets.
The benchmark S&P/ASX 200 gained 1 per cent on Wednesday, up 72.7 points to 7053. The S&P/ASX 200 was down 5.3 per cent so far this year, but outperforming a 12.5 per cent decline in the S&P500 and 13.4 per cent decline on the MSCI Global Index.
Head of equities at the RBC Capital Markets institutional trading desk Karen Jorristma, said Wednesday was a bit of a recovery bounce back after Tuesday’s 0.8 per cent decline, but warned the higher commodity prices supporting the ASX would not last.
Westpac Bank has started inviting bids for its wealth management unit BT Panorama, according to
people familiar with the matter, kicking off a sale of the country’s largest investment platform that has been a year and a half in the making.
Australia’s third-largest lender is allowing interested suitors access to confidential information about the business, according to the people, who asked not to be identified as the process remained confidential.
A deal could be worth as much as $1.5 billion, two of the people said. Indicative offers are due at the end of April, one of the people said.
Westpac is narrowing its focus with a plan to exit wealth, pensions, life insurance and auto finance, which were combined into a Specialist Businesses division in May 2020 with a view to sell them.
The bank’s pensions and financial planning operation last year reported technical malfunctions and poor ratings from regulators.
Deliberations are ongoing and details of the sale such as size could still change, the people said. A representative for Westpac’s BT Financial Group declined to comment.
Bloomberg
Nickel Mines went into a trading halt on Tuesday after plunging more than 22 per cent. But it acknowledged the reason for the plunge lies with its major shareholder and Chinese joint venture partner, Tsingshan Holding, which is facing billions of dollars of losses on a nickel short position.
Shares resumed trading at 3.08pm and improved to be 15.9 per cent lower.
In a release to the ASX this afternoon, Nickel Mines said it has talked to Tsingshan executives and said its many joint venture projects “are unaffected” and so is its investment in the SAX listed group.
“Tsingshan’s operations remain robust and unaffected with the group having strong confidence in its ability to manage its current market position,” the Nickel Mines’ announcement said.
Shares in metal recycler Sims Metals hit an 11-year high of $19.55 today following a price target increase by UBS analyst Lee Power on Tuesday from $18.90 to $20.30.
He said UBS retained its ‘buy’ rating on the stock because scrap prices were higher half-on-half and volumes were growing. So far, Sims had managed higher freight prices, and its margins were “supported by increasing focus on non-ferrous”.
“Despite this, consensus is for earnings before interest and tax (EBIT) declines on a half-on-half and year-on-year basis,” he noted.
“We sit 22 per cent ahead of second-half EBIT consensus and expect consensus to lift materially in coming months.”
Mr Power noted that global pig iron prices have increased 20 per cent in the past month to about $US100 per tonne. Supply chains were already tight before Russia invaded Ukraine, which together supply about 60 per cent of US pig iron imports.
This was good news for BlueScope Steel, although it does increase input costs, for which he has a $25.75 price target.
Australian Surfwear company Rip Curl has said it has stopped supplying goods to its network of licensed Russian stores as companies globally seek to distance themselves from the country’s invasion of Ukraine.
A spokeswoman for the ASX-listed Kathmandu Group, Rip Curl’s parent company, told The Age and Sydney Morning Herald on Wednesday that as of last week it had “temporarily ceased supplying its products to Russia”.
“Rip Curl does not operate in Russia with its products sold via a local licensee,” the spokeswoman said.
Kathmandu acquired Rip Curl for $350 million in late 2019, a purchase that included a licensed network of about 50 distributors in Russia. The business also operates three Rip Curl-branded stores in Moscow.
Despite the relatively large number of distributors in the country, Kathmandu said revenues from the licensee’s royalties in recent years were “insignificant”, understood to total just $10,000 for the last financial year.
The S&P/ASX 200 is up 1 per cent in afternoon trade, as the resources-heavy index continues to benefit from soaring commodity prices. US futures are currently negative, with the S&P500 mini down the most at -0.7 per cent.
Brent crude oil has jumped higher during Asian trade, up 2.5 per cent to $US131.23 per barrel and US crude oil is up 2 per cent to $US126.14. This follows announcements from the US and UK governments that they would boycott Russian oil, gas, and coal.
All ASX200 sectors are higher except consumer staples, which is getting dragged down by a 1.2 per cent fall in Coles and 1.5 per cent drop in Elders.
Financials and consumer discretionary are adding the most points, while materials are up 0.5 per cent thanks to gains in BHP, and gold and lithium miners. However, Nickel Mines remains down 22.7 per cent and in a trading pause, while South32 is down 1.6 per cent and Rio Tinto is down 0.8 per cent.
Biggest gains
The founders of regional-Victoria based Aussie Broadband have taken advantage of the stock’s return to the $5 level to sell down a little of their equity.
Aussie Broadband shares are up 2.9 per cent at $5.03 today, below the all-time high of $5.66 reached in late 2021. But the stock is up 402 per cent since floating at $1 in October 2020.
Co-founder Patrick Greene has sold 1.9 million shares at $4.95, taking him below the substantial shareholder threshold. While co-founder and chief technology officer John Reisinger and co-founder and managing director Phil Britt both sold 2 million shares for the same price, netting $9.9 million each and leaving them with 7.1 per cent of stock each, down from holdings of 8.2 per cent.
“The proceeds will be used to fund tax and personal obligations,” the company told the ASX today, adding the shares were acquired by Australian institutional investors.
With oil prices booming, Origin Energy has announced plans for a $250 million on-market share buy-back starting next month.
“Origin is in a strong financial position, with a robust outlook for the business and a capital structure comfortably within our target range,” Origin CEO Frank Calabria says.
“Going forward, we will continue to balance expected increased cash flow available for shareholder distributions with growth investments,” he says.
According to Origin, further capital management initiatives may be considered over time, subject to operating conditions and capital allocation alternatives.
Origin shares were 1 per cent higher at $5.84 this afternoon.
Macquarie Research analysts are preparing for an earnings upgrade for Australian iron ore miners as prices surge above $US160 per tonne as Ukrainian iron ore producers declare Force Majeure on supply contracts.
The analysts believe higher prices could see BHP and Mineral Resources earnings upside of 43 per cent and 60 per cent respectively in 2021-22.
“Benchmark iron ore prices (62 per cent fines) reached $US162.75 per tonne on 7th March, 13 per cent higher week on week,” the equities team wrote in a note to clients on Tuesday.
BHP shares are up 0.3 per cent today to $48.69 and Mineral Resources shares are up 3.7 per cent.