The Match Out: ASX jumps most in 2 months, M&A in focus with bids for LTR & UMG

The daily Match Out for Tuesday 28 March with Market Matters' James Gerrish.
James Gerrish

Market Matters

Markets @ Midday: Listen Here each morning
The local market had its best day in two months thanks to buying support across both banks and resources. Financials got a boost following news First Bank would buy SVB, creating a bit of stability in the space. A fuse was also lit under resources thanks to strength in oil overnight while a bid for a junior lithium miner created frenzied buying in the beaten-up space. It wasn’t all good news though as Healthcare & Tech underperformed on the back of weakness from sector heavyweights.
  • The ASX 200 finished up +72pts/ +1.04% at 7034
  • The Energy sector was best on ground (+4.14%) while Materials (+2.19%) & Financials (+1.11%) were also strong.
  • Healthcare (-0.94%) and Tech (-0.61%) the weakest links.
  • United Malt Group (ASX: UMG) +30.81% traded to 12-month highs after receiving a bid. UMG has entered into exclusive due diligence with Malteries Soufflet after their $5/sh cash bid was announced.
  • Liontown Resources (ASX: LTR) +68.52% was also in the crosshairs of a deal today which caused lithium names to rip higher. More on that below
  • SRG Global (ASX: SRG) +2.07% won another contract, this time a $55m deal with Fortescue (ASX: FMG). We recently added SRG to the Emerging Companies portfolio with today’s announcement taking them over the $1b mark in contract wins this financial year already.
  • Premier Investments (ASX: PMV) +5.63% bounced after a number of brokers upgraded numbers following a strong 1H result. Portfolio Manager Harry Watt joined Ausbiz yesterday to talk retail – click here to watch
  • Local Retail Sales data was also out midmorning, up +0.2% for February which was in line with expectations. CPI will be released tomorrow with a wide range of expectations in the market – anywhere from 7% to 7.6% compared to last month’s 7.4%
  • Coal stocks caught a bid with improving energy prices, Whitehaven Coal (ASX: WHC) +6.11% and New Hope (ASX: NHC) +4.24%
  • Iron Ore added +1.75% in Asia today with all three bulk miners up as a result. BHP (ASX: BHP) saw the best of it, up 1.95%.
  • Gold was up marginally in Asia, nothing too significant, sitting at ~US$1958 at our close. Gold stocks were mostly lower though, Evolution (ASX: EVN) fell 1.35%
  • Asian stocks were mixed, Japan’s Nikkei flat, Hong Kong and China both up 0.6%.
  • US Futures are all up, around +0.15%.


Liontown Resources (ASX: LTR) $2.57

LTR +68.52%: the junior lithium company disclosed that it had received 3 takeover offers from global giant Albemarle, sending shares to a new all-time high. The $2.50/sh all-cash bid values Liontown at over $5b and was a 63% premium to yesterday’s close. Liontown rejected the deal saying it undervalues the opportunity in front of the company which expects to start production at its Kathleen Valley project in mid-2024, a view the market agreed with as the stock closed above the bid today. Lithium has been under pressure over the last 3 months as battery manufacturers draw down inventory, however, today’s bid highlights the long-term opportunity in the space and supported a number of lithium stocks as a result.

Liontown Resources 

Broker Moves

  • Ingenia (ASX: INA) Rated New Buy at Citi; PT A$4.40
  • a2 Milk (ASX: A2M) Cut to Hold at Bell Potter; PT NZ$7.30
  • Synlait Milk (ASX: SM1) Raised to Accumulate at CLSA
  • Premier Investments (ASX: PMV) Raised to Accumulate at CLSA; PT A$28.50
  • Beach Energy (ASX: BPT) Raised to Overweight at JPMorgan; PT A$1.65

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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