The Match Out: ASX adds another 1%, Zip offloads loss making arms

James Gerrish

Market Matters

Equities caught a bid today as investors showed a more rational mindset with fears on the back of SVB eased. The local market followed the lead of the US to add ~1% today and around 75% of the ASX200 index closed higher on the session. Banks bounced back from yesterday’s selling helping the index finish more than 1% higher. Tech was the biggest gainer today while Real Estate was the only sector to finish lower.

  • The ASX 200 finished up +72pts/ +1.02% at 7122
  • The Tech sector was best on ground (+1.70%) while Materials (+1.49%) & Financials (+1.48%) battled it out for second spot.
  • Real Estate (-0.16%) was the weakest while both consumer sectors also underperformed.
  • Zip Co (ASX: ZIP) +3.7% sold their loss-making divisions in South Africa (Payflex) and Central and Eastern Europe (Twisto), netting around $20m after the winddown. The move is in line with their plan to focus on the profitable North American & ANZ businesses with their stake in India likely the next to go. They expect to be EBITDA profitable next financial year.
  • Mincor (ASX: MCR-5.67% struggled after saying they had been providing below-specification grades of nickel to their offtake partner BHP. While the ore has been taken by BHP, a price adjustment is likely to follow. Mincor remains under takeover from Andrew Forrest’s Wyloo, on market at $1.40/sh
  • Metcash (ASX: MTS) -1.02% has promoted Grant Ramage from an Executive in the food segment into the Food CEO role. He has big shoes to fill following Marshall’s resignation 2 months ago but it makes sense to us to have an insider get the gig.
  • Coal stocks were strong, outperforming the coal price which is up +0.4% today, Whitehaven Coal (WHC) +2.77% and New Hope (NHC) +1.65%
  • Iron Ore added +0.90% in Asia today with BHP the man beneficiary up 2.40%.
  • Gold was down marginally in Asia, falling -0.16%, sitting at ~US$1961 at our close. Gold stocks were weak as a result, Gold Road (GOR) fell -3.88% to be the worst performer in the index
  • Asian stocks were soft, Japan’s Nikkei -0.75, Hong Kong and China down -0.4% & -0.2% respectively.
  • US Futures are all trading around flat at our close.

ASX 200 Chart

Broker Moves

  • Allkem Raised to Overweight at Morgan Stanley; PT A$13.30
  • 29Metals Raised to Equal-Weight at Morgan Stanley; PT A$1.30
  • Sandfire Cut to Equal-Weight at Morgan Stanley; PT A$5.65
  • Northern Star Raised to Overweight at Morgan Stanley; PT A$12.85
  • Newcrest Cut to Equal-Weight at Morgan Stanley; PT A$26.90
  • Regis Resources Raised to Equal-Weight at Morgan Stanley; PT A$2

Major Movers Today

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James Gerrish
Portfolio Manager
Market Matters

James is Portfolio Manager & Primary Author at Market Matters, a daily investment report with over 2500 subscribers that offers real market insight. He is also Senior Portfolio Manager within Shaw and Partners heading up a team that manages...

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