The Match Out: ASX down ahead of a long weekend in the US

James Gerrish

Market Matters

A weaker session today for the ASX with much of the weakness coming late (as the intra-day chart below shows) however given the uncertainty on the geopolitical front, the market falling 1% was a reasonable effort, particularly into the weekend + the US is on Holidays Monday. Gold was the standout however there was also some interesting moves from a stock perspective with two stocks we hold in our Income Portfolio, namely Smart Group (SIQ) and Magellan Financial (MFG) rallying +11.65% and +18.45% respectively. On the sector front, the Materials were relative performers (down only -0.17%) while the Utilities were down -4.07% & Healthcare was off -3.07% after a good week.

  • The ASX 200 finished down -74pts/71.02% at 7221
  • The Materials held up relatively well (down-0.17%) however all sectors finished down on the session as 131 stocks in the ASX 200 fell.
  • A milder day on the reporting front, although there were still some big moves….
  • QBE Insurance (ASX: QBE) -8.7% fell after earnings missed the mark, a profit of $1.04bn up from a loss of $1.5b not enough to overcome an increase in their allowance for natural disasters.
  • Smart Group (ASX: SIQ) +11.65% delivered strong CY21 profit plus a special (30c) dividend, while they said the start of CY22 was positive.
  • Magellan (ASX: MFG) +18.45% was a standout in terms of price, the 1H22 profit was inline while the dividend of $1.10 was a beat, however that was always going to be okay given the bulk of FUM outflows happened after the period. An interesting option deal the driver whereby shareholders will receive 1 free option for every 8 shares held with a strike price of $35 and an expiry in 5 years. Back us, and we’ll back you the message while they also launched a good retention strategy for staff along the same lines. Harry and I discuss in the video below.
  • Whitehaven (ASX: WHC) +3.97% rallied after yesterday’s result, upgrades flowing through this morning and while our analyst ‘Rocky’ at Shaw’s is drinking the WHC cool-aide with a bullish $5 target, he’s not alone, Evans at $4.80, Credit Suisse at $4.70 are also drinking from the same jug – we remain long and bullish.
  • Iron Ore was down in Asia today, around 1.15%
  • Gold was down ~US$7 at $US1891 at our close, after a strong session overseas
  • Asian stocks were mixed, Hong Kong +0.39%, Japan -1% while China was flat.
  • US Futures are higher – between 0.6-0.8%
  • US markets are closed on Monday evening for Presidents Day

ASX 200

Market Matters weekly video update

A busy week = a late video and today Harry and I discuss our learnings from the bunch of property companies that reported this earnings, Magellan (MFG) & Smart Group (SIQ) after todays update and the ‘vibe’ from the reporting period thus far.

Sectors this week – Source: Bloomberg

Stocks this week – Source: Bloomberg

Broker Moves

  • Growthpoint Raised to Outperform at Macquarie; PT A$4.45
  • Growthpoint Raised to Buy at Moelis & Company; PT A$4.56
  • Judo Capital Raised to Buy at Citi; PT A$2.20
  • Netwealth Raised to Buy at Citi; PT A$15.25
  • Origin Energy Cut to Neutral at Credit Suisse; PT A$6
  • Goodman Group Cut to Neutral at JPMorgan; PT A$25
  • Cleanaway Raised to Positive at Evans & Partners Pty Ltd
  • Origin Energy Cut to Underweight at JPMorgan; PT A$5.50

Major Movers Today

Have a great weekend. 

The Market Matters Team

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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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