The Match Out: RBA ignites ASX, Tyro (TYR) has a suitor, Life360 (360) talks to profitability

James Gerrish

Market Matters

A quick turnaround today as the ASX rebounded more than 100 points to earn back yesterday’s slump. Early strength came from strong leads from overseas markets before RBA Governor Lowe fired up the buyers even more after saying the ‘outsized interest rate hikes’ had likely come to an end. Tech was the main winner as a result, along with real estate and discretionary stocks, while a bounce in iron ore helped support the materials sector.

  • The ASX 200 finished up 119pts/ 1.77% at 6848
  • The IT sector was best on ground (+3.19%) while Real Estate (+2.87%), Materials (+2.66%) Consumer Discretionary (+2.58%) were also strong
  • Energy (-2.76%) was the only sector in the red today, though Woodside (WDS) went ex-dividend today which stretched the move.
  • The RBA Governor was painting a more dovish tone, suggesting the ‘neutral’ rate is 2.5%, just 15bps away after this weeks’ hike. The market was pleasantly surprised, though still pricing in a 25bp hike in October.
  • Tyro Payments (TYR) +27.92%, rallied to a 5-month high after a bid from a group led by Potentia. The $1.27/sh offer was highly conditional and the Tyro board rejected the approach saying it was opportunistic. The market didn’t seem to mind through with shares spending much of the session above the bid price. Potentia is also courting Nitro (NTO) which turned away their initial offer as well.
  • Link Admin (LNK) +6.26%, the Dye & Durham takeover offer took another step forward today after the ACCC gave their stamp of approval, conditional on the Banking and Capital Management sale, as well as the sale of Link’s 42% stake in Pexa (PXA).
  • Life360 (360) +16.36%, rallied after a bullish presentation to a tech conference today. More on that below.
  • QANTAS (QAN) +3.75%, was strong following news the baggage handling strike had been averted. Softer oil prices also helped support the airline.
  • Iron Ore rose 2.85% in Asia today, supporting the bulk miners. Fortescue (FMG) rallied nearly 5% today.
  • Gold is marginally higher, $1720/oz, up just $US1
  • Asian stocks were mixed, Nikkei rallied 2.3% buy Hang Send (-0.7%) and Shanghai (-0.25%) were soft.
  • US Futures are all up as well, Nasdaq (+0.44%) leading the way, S&P500 Futures are currently +0.30%

ASX 200 Chart

Life360 (360) $5.69

360 +16.36%: while the rally in tech stocks helped, Life360 was also boosted by strong guidance into the 2H. The digital safety company presented at a technology conference today and painted a rosy picture for the rest of the year and beyond. They guided to an EBITDA loss of $3-6m in the second half before targeting profitability and positive cashflow by CY24 on the back of scale, slowing headcount growth and a strong uplift in subscriptions with the push for bundled memberships. They had $79m in cash the end of the first half providing plenty of balance sheet headroom as they look to breakeven at some point next year.

Broker Moves

  • Resolute Mining Rated New Buy at Barclay Pearce Capital
  • Countplus Rated New Buy at Barclay Pearce Capital
  • Macquarie Telecom Cut to Sector Perform at RBC; PT A$68
  • Medibank Private Cut to Equal-Weight at Morgan Stanley
  • Cochlear Cut to Underweight at Morgan Stanley; PT A$190

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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