The Match Out: ASX down, AUD hits 2-year low, Johns Lyng Group off 14% as CEO sells stock

James Gerrish

Market Matters

The ASX was lower today following a tough session in the US on Friday. SPI Futures were down 61pts Saturday morning however we opened down more than a hundred as more weakness crept into US Futures. Some backbone became obvious around midday with the market grinding higher for the afternoon before late selling took hold - most support coming from Staples however all sectors finished in the red.

  • The ASX 200 finished down -94pts/ -1.40% at 6667
  • The Consumer Staples sector was the best relative performer (-0.33%) while Materials (-0.93%) & Energy (-1.15%) outperformed the broader weakness.
  • Utilities (-3.18%) and IT (-2.59%) the weakest links.
  • The AUD hit a 29-month low today trading at US63.29c at our close – a strong US dollar is deflationary for them while a weaker AUD is inflationary for us.
  • NAB is forecasting the local currency will mostly trade between 62.5 to 67.5 US cents for the rest of this year, before recovering towards 70 US cents by the middle of 2023.
  • Johns Lyng Group (ASX: JLG) -14.63% fell sharply as their influential CEO sold 7.5% of his holding to fund a new house in Colorado and tax liabilities. Still holds nearly ~50m shares. They also reconfirmed FY23 revenue & EBITDA guidance or $1030.9m & $105.3m respectively, which was around 5% below where market consensus was residing – so CEO sells stocks & guidance a touch weaker than mkt = stocks down 14%.
  • Tyro Payments Limited (ASX: TYR) +1.68% upgraded guidance today on the back of a strong start to FY23
  • Gold stocks were under the pump following a strong bounce last week – a higher $US the catalyst.
  • Some weakness crept into the coal stocks today – the ‘buy weakness on open’ trade that has worked all year didn’t work today – Whitehaven Coal (ASX: WHC) -4.65%, although a very small blip in a very strong trend.
  • UBS has upgraded Bendigo Bank (ASX: BEN), Macquarie (ASX: MQG) and Westpac (ASX: WBC) all to “buy” joining ANZ. Their analyst John Storey says that fixed mortgages which make up around 25% of total system residential mortgages, will mature by December 2024 creating a very competitive environment.
  • Iron Ore was ~3% higher in Asia today supporting Fortescue (ASX: FMG) +1.85% & RIO +0.85%
  • Gold was down during the Asian session today to ~US$1687.
  • Asian stocks were lower Hong Kong down -2.8, Japan fell -1.96% while China was off -0.82%
  • US Futures are all down, around -0.40%

ASX 200 Chart

Tyro Payments (TYR) $1.51

TYR +1.68%: the payment software and terminal company upgraded guidance today on the back of a strong start to FY22. EBITDA is now expected in the range of $28-$34m, up around 20% on the previous guidance and over 40% above consensus at the midpoint. The company processed over $10b in transactions in the first quarter, up 59% on the COVID-impacted 1Q of last year. The main driver of the upgrade was expected cost savings with the company targeting $11m/yr in the cost base, as well as a total of $5m this year. The upgrade comes as Jon Davey takes over as CEO, with Rob Cooke departing the business at the end of the year. A positive update and may entice further developments in a rumoured takeover play.

Broker Moves

  • Mineral Resources Rated New Sector Perform at RBC; PT A$77

Major Movers Today

Have a great night

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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