The Match Out: ASX drifts lower today, but higher for the week, Go the Matilda’s!

A tentative end to a week that had a bit of everything, from company results here and overseas, important economic data, RBA testimony to parliament, a loss by Manly at Brookvale to end their season & now the biggest event of the week, the Matilda’s playing France on Saturday afternoon!

• The ASX 200 finished down -17pts/ -0.24% at 7340
• The Consumer Discretionary sector was best on ground (+0.83%) while Healthcare (+0.33%) & real-Estate (+0.10%) were also up.
• Energy (-1.93%) and IT (-0.60%) the weakest links.
• Interesting comments from the RBA’s Dr Phillip Lowe as he faced parliament for the final time, implying he was optimistic about the ability of borrowers shifting off cheap fixed-rate mortgages to much more expensive variable-rate loans to make the transition.
• About 1m have moved so far, another 1m will moved in the next 12 months, with the peak coming this month and next. He cited evidence from the major banks which suggest these borrowers are keeping up with their new loans and maintaining spending levels
• REA Group (ASX: REA) +0.04% reported an in-line FY23 result this morning, with a small fall in earnings despite a slight uptick in revenue
• Nick Scali (ASX: NCK)+13.27% hit 6-month highs on a strong result but flagged a weak start to FY24.
• Newcrest (ASX: NCM) -0.39% ticked lower despite a solid result, the takeover from NEM remains the key driver of shares.
• Star Entertainment (ASX: SGR) +17.95% enjoyed the poker machine tax relief from the NSW Government today, rallying strongly from a low base.
• BlueScope (ASX: BSL) -3.6% fell after signing off on a $415m expansion of its coated metal products factory in Sydney.
• Lendlease (ASX: LLC) +2.66% looked good today after a gentle pullback earlier in the week – they report on Monday. We bought recently.
• Iron Ore was flat in Asia
• Gold added US$4, settled $US1917 at our close.
• Asian stocks were mixed Hong Kong down -0.75%, Japan +0.22% while China was off -1.43%
• US Futures are up a touch- not a lot
• YETI US reported overnight and was up ~20% - we own and thought the result was solid (as did others).
• Local Reporting on Monday: Lendlease (LLC), Carsales (CAR), JB Hi-Fi (JBH), Bendigo Bank (BEN) + more.
• Market Matters Reporting Calendar Here

ASX 200 Intraday

ASX 200 Daily

REA Group (ASX: REA) $158.68

REA +0.04%: FY23 result out this morning was broadly in line with expectations, with a small fall in earnings despite a slight uptick in revenue. Net profit of $372m was slightly above consensus of $366m with cost control being the key driver. Listing volumes were weak during the year as property prices came off the boil, however, REA managed to increase its footprint in the Aussie market to hold revenue steady. International markets continue to show promise, however, their main overseas position in India was slightly disappointing despite seeing 46% revenue growth. CAPEX numbers were slightly higher than expected which weighed on the dividend. Outlook comments from the company were mixed, expecting to see weak YoY listing volumes early in FY24 as they cycle strong numbers, but then expect to see “positive jaws” with margins continuing to improve with scale.

• An ok result, however, the market was positioned for it. We would need to see more before being interested again in REA – we sold recently.

Nick Scali (ASX: NCK) $12.12

NCK +13.27%: the furniture retailer hit 6-month highs today on a strong result but flagged a weak start to FY24. Revenue of $507m was largely in line with consensus however better margins drove a 5% beat at the profit line to $101m. Margins were helped by a full-year contribution from Plush, a business they acquired in 2021 with synergy benefits helping earnings while falling freight costs were also supportive. As we have seen with other retailers, Nick Scali has watered down FY24 with the July order book starting -8.1% below July FY23.

Newcrest Mining (ASX: NCM) $25.85

NCM -0.38%: A solid FY23 result today for Australia’s largest gold company that is currently under takeover from US-listed Newmont (NEM US). Underlying profit of $778 million, was down 11% on the year but above consensus of $703m while they reported a final dividend of 20cps. All-in sustaining cost per ounce $1,093, was up 4.8% YoY while they guided to FY24 gold production of 2-2.3m ounces, copper production 120,000-140,000 tons & Capex of $560-$640 m. Clearly, the biggest influence on NCM share price is the NEM share price, with NCM trading at a 3.76% discount to the implied bit amount based on this afternoon’s close.

Sectors this week

Stocks this week

Broker Moves

• Coronado GDRs Raised to Accumulate at Ord Minnett; PT A$1.70
• Clinuvel Raised to Buy at Moelis & Company; PT A$22.05
• Altium Raised to Accumulate at CLSA; PT A$42

Major Movers Today

Have a great night

The Market Matters Team

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