The Match Out: ASX hit on broad-based selling, more outflows at Magellan (MFG)

A tough day for the Aussie market with broad-based selling knocking shares sharply lower – the higher beta parts of the market felt the brunt of the risk-off attitude while the IT stocks were the only ones to finish up on the day - WiseTech (WT) +0.98% only knows one way!

• The S&P/ASX 200 lost -89pts points / -1.24% to close at 7163
• IT (+0.13%), the only sector to finish in the black, Utilities (-0.27%) & Communications (-0.32%) did better than the weak market.
• Consumer Discretionary (-1.91%), Materials (-1.86%) and Financials (-1.45%) the biggest drags.
• When ~50% of the market comes from sectors that fall more than 1%, it’s always going to be a tough day.
• Looking across our large cap portfolios, the only stocks flicking green were APA Group (ASX: APA) +0.20%, Goodman (ASX: GMG) +0.29%, Xero (ASX: XRO) +0.10%, Worley (ASX: WOR) +0.38% & REA Group (ASX: REA) +0.43% - giving a sense of where money goes on a day like this.
• Magellan (ASX: MFG) – 8.32% on the other hand, was whacked, not a good day to announce further outflows and performance fees that were below expectations. We own this and was expecting FUM to be better, not worse + $11 million in performance fee income was around half what we thought it could be..
• Star Entertainment (ASX: SGR) -8.73% was hit on concerns around their balance sheet and refinancing of debt - making it the worst performer in the 200.
• ARB Corp (ASX: ARB) -4.25% fell on a broker downgrade
• Citi cut forecasts on JB Hi-Fi (ASX: JBH) -1.97% and Super Retail (ASX: SUL) -2.24%
• Australian 10-year yield jumps 11bps to highest level since October, pricing in more rate hikes. Rates traders switched back to fully pricing in two 25bp RBA hikes by year’s end
• Home Affairs Minister Clare O’Neil called Donald Trump Jr a ‘big baby’ after he cancelled his trip down under – this is making international news! She has since deleted.
• Trade data was strong today, +4% on exports due to strength in Coal, Iron Ore & Gold & +2% on imports.
• Iron Ore was down a touch in Asia, but nothing dramatic.
• Gold was up +$US5 to 1921 at our close
• Asian stocks were down, Hang Seng off -2.4%, the Nikkei in Japan fell -1.77%, while China lost -0.81%
• US Futures are flat

ASX 200 Intraday

ASX 200 Daily

Magellan (MFG) $8.92

MFG -8.32%: shares in the fund manager struggled today following a weak Funds Under Administration (FUM) update, coupled with a soft day across the broader market. The company announced a further $2.1 billion of outflows in June with total FUM now at $39.7 billion, the lowest since 2016. Institutional investors pulled $1.7 billion in the month despite signs of improving performance. On that note, Magellan expects to earn $11 million in performance fees for FY23, though this was a little short of expectations. Overall, the business is turning, though perhaps not as fast as we had hoped.

Broker Moves

• Macquarie Downgrades ARB to Underperform From Neutral
• Nanosonics Rated New Sector Perform at RBC; PT A$5.25
• Super Retail Cut to Neutral at Citi; PT A$12
• JB Hi-Fi Cut to Neutral at Citi; PT A$48
• 3P Learning Cut to Equal-Weight at Morgan Stanley; PT A$1.20
• SiteMinder Ltd Rated New Equal-Weight at Morgan Stanley
• Reckon Cut to Underweight at Morgan Stanley

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