The Match Out: ASX meanders into a new week, Defensive sectors solid, Energy not so

Markets @ Midday: Listen Here each morning

A bit of a nothing session today for the ASX, the best of it was seen early with the index up ~30pts at its highs before a lacklustre afternoon session saw the gains evaporate, Energy the biggest drag overall while the banks came off as the day wore on.

• The ASX 200 finished up +6pts/ +0.10% at 6955
• The Utilities sector was best on ground (+2.14%) while Property (+1.11%) & Healthcare (+0.73%) were also strong.
• Energy (-2.30%) and Consumer Discretionary (-0.28%) the weakest links.
• Premier Investments (ASX: PMV) -2.49% lower today despite reporting strong 1H23 results. More on that below.
• AGL Energy (ASX: AGL) +3.22% was a strong mover again today with the stock closing at $7.69, now up ~13% in the last 10 days. The market has transitioned from an uber-bearish stance to a more neutral one.
• Lake Resources (ASX: LKE) -13.54% hit hard as the non-exec chair Stuart Crow sold ~ 8m shares realising just shy of $4m, meeting personal financial obligations to blame!
• Healius (ASX: HLS) +2.06% had its two biggest shareholders (Perpetual & Tanarra Capital) who speak for ~21% of the stock call last weeks bid from Australian Clinical Labs (ACL) as unappealing. HLS retains it’s ‘take no action’ stance.
• Bank of Qld (ASX: BOQ) flat, more changes at the top, Patrick Allaway to relinquish the Chairman’s role to focus on the MD/CEO gig he took on in November last year, with Warwick Negus to take over the Chairman’s role. A search is underway to find Allaway’s replacement.
• Tyro Payments (ASX: TYR) +2.12% moved to reassure investors that talks with potential buyer Potentia remain ongoing despite little news flow since their half-year result a month ago. A binding, non-binding, or transaction of any kind may or may not occur, but it still might. Clear as mud!
• Coal stocks opened higher following strength in the underlying coal price, but sold off by the close, Whitehaven Coal (ASX: WHC) -1.54% and New Hope (ASX: NHC) – 1.28%
• Iron Ore ticked up ~1% higher in Asia today, Fortescue (ASX: FMG) flat while RIO fell -0.59%
• Gold was down a touch, nothing too significant, sitting at ~US$1974 at our close. Newcrest (ASX: NCM) was solid up +1% and hitting its highest level since May 2022.
• Asian stocks were mixed, Hong Kong down -0.96%, Japan +0.30% while China was off -0.75%
• US Futures are all up, around +0.40%

ASX 200 Chart

Premier Investments (ASX: PMV) $24.70

PMV -2.49%: the retail group reported 1H numbers today which were well ahead across most metrics, however, the initial rally in its shares was sold into, ending the session lower. Sales were a ~15% beat to expectations while Retail EBIT was around 5% ahead of the market. The company’s balance sheet is in great shape with ~$400m cash along with significant investments in Myer (MYR) and Breville Group (BRG), giving the company plenty of flexibility to look at further growth through M&A while they continue to execute on their store roll-out and geographical expansion plan. The company will pay a 54cps dividend (inline) and a 16cps special dividend, both fully franked. Trading for the first 6 weeks of the new half was also strong, up 7.7% on pcp. The only issue we had with the result was lower margins, mostly as a result of their FX exposure while manageable costs were controlled well.

Broker Moves

• Syrah Reinstated Outperform at Macquarie; PT A$2.30
• Estia Health Cut to Hold at Jefferies; PT A$3
• Renascor Rated New Outperform at Macquarie
• TPG Telecom Reinstated Reduce at CLSA; PT A$5
• SiteMinder Ltd Rated New Buy at CLSA; PT A$4.05
• Helloworld Rated New Buy at Shaw and Partners; PT A$3

Major Movers Today

Have a great night

The Market Matters Team

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