The Match Out: Inflation data trims ASX gains, Medibank (MPL) tumbles after data breach, Coles (COL) sales update disappoints

Aussie shares followed positive overnight leads to jump to a 5-week high early in the day however higher than expected inflation data tapered the rally before midday. The market gave up 43pts in around half an hour, however, support kicked in with the index never dipping into the red today. Despite the higher-than-expected CPI, it was the yield focussed sectors that outperformed the market as Utilities and Real Estate rallied more than 2%.

• The ASX 200 finished up +12pts/ +0.18% at 6810
• The Utilities sector was best on ground (+2.48%) while Real Estate also jumped +2.41%.
• There were just 3 sectors down today, Staples (-2.39%) the worst, followed by Energy (-1.36%) and a marginal fall by Tech (-0.1%).
• Australian Headline CPI came in at +1.8% QoQ, well above the 1.6% expected, while the Trimmed Mean also smashed expectations of 5.5% YoY, landing at 6.1%. While there was some selling around on the back of the data, by and large, it was a somewhat muted response given how severe the beat was. Yields fell post the announcement, the Australian 10-year seeing the most significant move with a 3.95% fall to 3.19%.
• Coles (ASX: COL) -2.65%, provided a 1Q update that showed sales fell in real terms. Supermarkets saw LFL sales +2.1%, however inflation was running at 7.1%. The liquor business fell -4.1% on a like-for-like basis. While the company said sales growth had improved in the 2Q and COVID costs were continuing to moderate however the update weighed on the Staples sector.
• Costa Group (ASX: CGC) +10.76%, the fruit and veg company jumped to 1 month highs after US PE fund Paine Schwartz took their stake up to 15%, largely through a trade at a 16% premium to yesterday’s close. The fund wont be able to take their 9.9% direct any higher without FIRB approval and said they have no intention of a takeover.
• Medibank (ASX: MPL) -18.12%, returned to usual trading today after almost a week following a cyber security breach. The company said personal information, including Medicare data, of all 3.8m customers was accessed.
• Kogan.com (ASX: KGN) +6.38%, announced their excess inventory is expected to be cleared this half and warehouse costs had moderated as a result. Net cash had climbed to $23.8m at the end of the quarter.
• Bega Cheese (ASX: BGA) +1.85%, traded higher on the departure of long-standing CEO would depart early in 2023. After 6 years at the helm, Paul van Heerwaarden will be replaced by COO Pete Findlay.
• Pilbara (ASX: PLS) -7.09%, gave back some recent gains on a broker downgrade.
• Iron Ore was ~1.2% higher in Asia today though the miners saw mixed fortunes. Rio Tinto (ASX: RIO) was the standout, though only managing a gain of 0.59%
• Gold edged higher by around 0.2% today to $US1657 at our close.
• Asian stocks were strong, Hong Kong and Japan both up around 0.8% while China was up +0.36%
• US Futures are weak, S&P down -0.96% and Nasdaq the worst, currently down -1.95%, weighed on by weak results aftermarket by Microsoft & Alphabet.

ASX 200 Chart

Medibank (ASX: MPL) $2.87

MPL -18.12%: the health insurer was hit hard after shares began trading again. The company said data of its 3.8m customers had been breached, with the hack likely including data of previous clients taking the total over 4m. The data was accessed after the login details of an employee were compromised, with data including names, addresses and Medicare numbers available through the access. Medibank said it would see one off costs associated with the breach of between $25-35m, but may increase if customer remediation is required as a result. In response, Medibank will defer premium rate increases until at least mid-January. The company said claims expense growth was tracking below expectations ahead of the attack, while customer growth was strong however guidance had been withdrawn given the uncertainty around the business backlash as a result of the news. The latest hack puts cybersecurity in the spotlight yet again.

Broker Moves

• OM Holdings Rated New Outperform at Kenanga Investment Bank
• Viva Energy Cut to Accumulate at CLSA; PT A$3.01
• Westpac Cut to Negative at Evans & Partners Pty Ltd; PT A$20
• Capricorn Metals Cut to Neutral at Macquarie; PT A$3.50
• Reliance Worldwide Raised to Buy at Jefferies; PT A$3.50
• Lynas Reinstated Neutral at JPMorgan; PT A$8.30
• Ampol Raised to Outperform at Credit Suisse; PT A$30.49
• Integral Diagnostics Cut to Underperform at Credit Suisse
• Pilbara Minerals Cut to Underweight at JPMorgan; PT A$4.20
• Zip Co. Cut to Hold at Ord Minnett; PT 70 Australian cents
• REA Group Cut to Underperform at Jefferies; PT A$102.36

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