The Match Out: Market edges up and looks poised to rally, Energy and Materials lead the line today

James Gerrish

Market Matters

Most stocks rallied today, pushing the index higher as we edge towards the four day Easter break. Materials and Energy did the heavy lifting, more than offsetting weakness amongst the property stocks. 

While the traditional April rally has so far been elusive, March was up around 7%, so it’s understandable that stocks have consolidated that move. But the index now looks well-positioned for an assault higher, we think.

  • The ASX 200 finished up +25pts/+0.34% at 7479.
  • The Energy sector was best on the ground (+0.98%) while Materials (+0.64%) & Consumer Discretionary (+0.52%) were also strong.
  • Real Estate (-0.41%) was the only real drag, IT was flat.
  • US inflation data, the hottest in 40 years, got a lot of airtime in the media today, but it was built-in, bond yields tracked lower in the US with that trend being mirrored locally.
  • The RBNZ hiked rates by 50bps today versus expectations for 25bps, it’s the fourth consecutive hike, taking benchmark rates to 1.5%.
  • Canada is likely to do the same tonight when they meet taking rates up to 1% – the RBA clearly dragging their feet.
  • EML Payments (EML) +10.53% rallied after confirming private equity interest, sort of, but not anymore!
  • Asian coal shares rallied after European futures rose to the highest in more than a month, curbs on imports from Russia tighten the market again, Whitehaven (WHC) +3.18%, Coronado (CRN) +7.14%.
  • Morgan Stanley thinks demand for building products could be hit by recent wet weather, Adri (ABC) fell -4.64% on a broker downgrade.
  • Iron Ore was flat in Asia today.
  • Gold was up overnight to around US$1969 but largely flat today.
  • Asian stocks were mixed Hong Kong up +0.41%, Japan +2.13% while China was off -0.41%.
  • US Futures are all up, S&P +0.60%, Nasdaq +0.82%.

ASX 200 chart

EML Payments (EML) $2.92

EML +10.53%: News reports started to come through overnight that a private equity outfit was looking at a takeover of EML. EML confirmed Bain Capital was eyeing a buyout of the prepaid cards business earlier in the year, to the point the company gave them an exclusive look at the books. That period wrapped up last month without a deal being struck and Bain has walked from the table at this point. It was seemingly a disappointing update, Bain essentially taking the view that it was too expensive to start with, however, the corporate interest sent shares higher today. EML had nearly 10% of the stock on issue short sold as at last Thursday, likely contributing to the squeeze higher today.

EML Payments

Blackstone Minerals (BSX) 40.5 cents

BSX +9.46%: The Nickel/Cobalt hopeful rallied today after obtaining approvals to commence drilling at their Chim Van target in Vietnam, a key step in the development of their integrated battery metals processing business in Vietnam. Capped at just $173m this is a small, speculative mining stock with an interesting future if they execute well. Our analyst has a $1.50 TP on it.

Blackstone Minerals

Broker moves

  • Medibank Private Raised to Overweight at JPMorgan; PT A$3.50
  • Adbri Cut to Equal-Weight at Morgan Stanley; PT A$3.40
  • Lynas Reinstated Neutral at Goldman; PT A$9.50
  • Gold Road Cut to Hold at Argonaut Securities; PT A$1.59
  • PXS AU Reinstated Speculative Buy at Morgans Financial Limited
  • Webjet Raised to Buy at Citi; PT A$6.50
  • Western Areas Cut to Hold at Shaw and Partners; PT A$3.87

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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