The Match Out: ASX up 100pts for a second week in a row lead by Commodities, Pendal (PDL) full year results land

The local market started on the back foot today, but managed to trend higher into the weekend. The banks battled back off their lows but the index was mostly supported by strength from commodities with Energy and Materials the key winners today with the USD coming off. Despite yesterday’s tumble, the ASX had a strong week, finishing up 106pts/+1.57%, carried by strength in Energy while Real Estate and Staples were the only sectors lower.

• The ASX 200 finished up +34pts/ +0.5% at 6892.
• The Energy sector was best on ground (+3.37%), followed by Materials (+1.82%) & Utilities (+1.52%)
• The main drag came from Healthcare (-0.78%), while Telcos were also weak, the sector falling -0.44% today
• Retail sales were up less than expected in September, adding +0.2% versus +0.4% consensus, however, the retail sectors were still in the black today.
• Lots of press around the Perpetual/Pendal & now Regal tussle with Pendal (ASX: PDL)  also reporting a solid full-year result this morning - more on that below.
• CSR Limited (ASX: CSR) +3.53%, reported 1H results today, saying while costs were higher, they’ve been managed well and passed on to customers seeing a 29% increase in EBIT> The company also noted a strong pipeline of demand given the backlog in construction which will help the 2H.
• Block (ASX: SQ2) +10.93%, rallied today after releasing their 3Q update before market. Strength in Cash App, payment terminals and BNPL offset a weaker crypto result.
• GPT Group (ASX: GPT) -0.69%, reconfirmed FY23 guidance today and said retail leasing activity remained strong for the quarter.
• More outflows at Magellan (MFG) -2.35% with another $2.4bn out the door in October, $400m from retail and $2bn from insto. FUM rose marginally though thanks to positive performance.
• James Hardie (ASX: JHX) +-0.24% held their AGM today with little in the way of new news or forward-looking commentary.
• US Non-Farm payrolls out tonight with the market looking for just under 200k jobs added
• Iron Ore was ~4% higher in Asia today, lifting the miners as Fortescue (ASX: FMG) rallied 3.86%.
• Gold was higher today, up ~1%/$US16 to $US1645 at our close.
• Asian stocks were strong today, the Hang Seng rallying 5.7% at our close. Nikkei was the outlier though, -2% after being closed yesterday
• US Futures are all trading higher, S&P up 0.25% and Nasdaq +0.45%.

ASX 200 Chart

Pendal (PDL) $4.51

PDL -0.22%: Putting the three way takeover tussle to one side, Pendal (PDL) reported full year results this morning that were solid, all key metrics were in line to slightly above market expectations with revenue of up 8% to $629.7m and underlying profit up 17%. The dividend of 3.5cps for the half was below 22cps expected however the dividend comes off the cash component of the Perpetual bid so it’s net net neutral, as we suspect they would pay the difference out if the deal falls over. On the earnings call this morning, Pendal CEO Nick Good was stressed multiple times that the deal with Perpetual was a “legally binding contract”, that he didn’t anticipate any problems with the Pendal shareholder vote and both teams were “moving forward with the path laid out”.

Sectors this week – Source Bloomberg

Stocks this week – Source Bloomberg

Broker Moves

• Lendlease Cut to Accumulate at CLSA; PT A$8.77
• Alcidion Group Rated New Outperform at RBC
• Pendal Group Raised to Buy at CLSA; PT A$5.50
• Bravura Cut to Neutral at Macquarie; PT 66 Australian cents
• Bravura Cut to Speculative Buy at Evans & Partners Pty Ltd
• Woolworths Group Raised to Neutral at Credit Suisse; PT A$33.01

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