ASX LIVE | ASX Opens Flat; CMB Post $10.2b Profit, SUN Cash Profits Up 67%, China CPI Data Waivers Asian Markets

The ASX 200 finished up 0.37%, trading at 7,338.0

The morning’s weaker trading was revived by strong profits from Commbank, lifting the banking sector, which drove momentum in the afternoon.

ASX 200 Sector Top Performance

• Financials +1.21%
• Telecommunication +0.95%
• Information Technology +0.87%

ASX 200 Sector Worst Performance

• Health Care -0.89%
• Real Estate -0.72%
• Utilities -0.27%

The best individual performers:

• Invocare [ASX:IVC], up 5.94%
• Coronado Global Resources [ASX:CRN], up 4.81%
• BSP Financial Group [ASX:BFL], up 4.46%
• Seek Ltd [ASX:SEK], up 2.95%
• Domino’s PIZZA Enterprises [ASX:DMP], up 2.69%

The worst individual performers:

• Resmed [ASX:RMD], down 4.63%
• Lovisa Holdings [ASX:LOV], down 4.34%
• The Star Entertainment Group [ASX:SGR], down 4.04%
• Charter Hall Long Wale REIT [ASX:CLW], down 3.95%
• Meridian Energy [ASX:CHC], down 3.66%

All figures shown are from 4:40pm AEST

Troubled Perth Mint is back in the limelight again as the Diggers & Dealers Mining Forum ends today, where it has become a hotbed issue.

The WA-owned entity has been considered for sale by the state, something which has irritated gold miners.

While at the forum, several gold mining heads have commented, most notably Northern Star Resources Chief Executive Stuart Tonkin, who stood up for the struggling Mint today.

‘Northern Star values a well-functioning [The] Perth Mint that can safely, efficiently and effectively purchase and refine the company’s gold ore.’

‘We also value the WA government’s ownership of The Perth Mint, which provides added security, regulation and accountability that is important to our business.’

The Perth Mint is currently struggling after facing a recall of $9 billion worth of gold bars after selling diluted bullion to China and attempting to cover it up.

In April, WA Mines Minister Bill Johnston announced that the government would spend $1 million on an independent review of The Perth Mint and its Parent entity, Gold Corporation.

‘The review will consider options to reduce the state’s risk, including regulatory, financial, and other risks, and ensure the value in retaining the ownership of the Gold Corporation‘, he explained in April.

S&P Global has announced it will stop giving scores to corporate borrowers on ESG criteria as their merit comes under fire by Republicans in the US, who claim they were being used as a political tool.

ESG stands for Environmental, social, and corporate governance, and each letter was previously given a numerical value by the influential rating agency.

Now S&P says that only text would be given to analyse company’s ESG matters.

‘We have determined that the dedicated analytical narrative paragraphs in our credit rating reports are most effective at providing detail and transparency on EDG credit factors material to our analysis rating’, the firm said.

The change comes at a time with broader concerns about ESG from both sides of the political spectrum.

From the left, ESG has been seen as a method of ‘greenwashing’ by high-polluting companies or companies with questionable labour practices.

From the right, ESG has been seen as a political hatchet that has been wielded by rivals to discredit and disenfranchise companies related to the Republican party, or those they deem misaligned by left-leaning media.

The video communications company Zoom, whose name became synonymous with remote work during the pandemic, has ordered staff back to the office.

In a move of supreme irony that is apparently lost on the leadership there, Zoom has said that a ‘structured hybrid approach’ is now the most effective approach and people living within 80km of an office should work in person at least two times a week.

This is the latest push by a major company to push back on previously flexible work policies.

Famously, this year alone, Disney, Dell, Amazon, and Meta have all ditched remote work policies and forced staff to return to offices.

About 12% of US Zoom staff were fully remote in July, while another 29% had hybrid policies.

Zoom had previously said that staff would be able to work remotely indefinitely.

Zoom has commented, saying that the new policy would put the company in a ‘better position to use our own technologies, continue to innovate, and support our global customers‘.

Research by a Stanford team has found remote work is more common in English-speaking countries, while considerably less common in Asia and Europe.

UBS estimates seem to have missed the mark this month as household spending numbers sink lower than modelled.

We’ve seen this play out in earnings calls this week as Myer [ASX:MYR] sank yesterday on weakening 2H23 retail numbers.

With figures like this, we may have seen the end of interest rate hikes from the RBA for this tightening cycle.

Either UBS needs to retool its AU household consumption volumes model or services demand fell like a stone in Q2. Have to wait another month to find out! #auspol #ausbiz pic.twitter.com/Y9x2sYb3hR

— David Scutt (@Scutty) August 9, 2023

Our small caps expert Callum Newman is diving into the nitty-gritty of the latest earnings report from building products company James Hardie.

Here’s his view on yesterday’s earnings:

‘The latest earnings result came out yesterday for James Hardie Industries. JHX is moving perfectly in accord with where I think the market — and the world — is currently. Expectations last year became incredibly depressed and negative. Now the stage is set for companies to surprise to the upside…’

Bullish sign? Read below.

https://www.moneymorning.com.au/20230809/jhx-storms-highera-bullish-signal.html

InvoCare board has finalised and supported a $1.8 billion takeover offer from TPG Capital.

TPG will buy out the funeral services provider in a cash deal at $12.70 per share.

The deal will include a full-franked dividend of 60 cents per share.

The deal had been previously looking shakey as TPG had threatened to walk from the deal if a lower price had not been struck with InvoCare’s board.

Invocare’s share price is up 5.7% in today’s trading so far.

The ASX 200 remains flat, up 0.07% at 7,315.9

Bank stocks rally on Commbanks report, while Beach Energy falls on news of CEO Morne Engelbrecht’s departure.

Syrah Resources shares have jumped 7.8% after news the miner is in talks with Korea’s Samsung for a potential graphite deal.

ASX 200 Sector Top Performance

• Information Technology +0.70%
• Financials +0.68%
• Telecommunication +0.34%

ASX 200 Sector Worst Performance

• Health Care -1.04%
• Real Estate -0.69%
• Materials-0.33%

The ASX 200 remains flat, up 0.07% at 7,315.9

Bank stocks rally on Commbanks report, while Beach Energy falls on news of CEO Morne Engelbrecht’s departure.

Syrah Resources shares have jumped 7.8% after news the miner is in talks with Korea’s Samsung for a potential graphite deal.

ASX 200 Sector Top Performance

• Information Technology +0.70%
• Financials +0.68%
• Telecommunication +0.34%

ASX 200 Sector Worst Performance

• Health Care -1.04%
• Real Estate -0.69%
• Materials-0.33%

The latest data published by China’s National Bureau of Statistics (NBS) this morning shows the country’s annual Consumer Price Index (CPI) fell 0.3% in July YoY, compared with 0% seen in June.

The market estimates were for a 0.4% drop.

This is the first negative inflation reading since early 2021 in the middle of the Pandemic.

The latest batch of inflation data also shows the nation’s producer prices also fell, dropping 4.4% year-on-year.

Chinese authorities have reportedly put pressure on high-profile local economists to avoid discussing negative terms.

This could mean the beginning of a deflationary period that would be very harmful to the economy as it risks a deflationary spiral.

The latest data published by China’s National Bureau of Statistics (NBS) this morning shows the country’s annual Consumer Price Index (CPI) fell 0.3% in July YoY, compared with 0% seen in June.

The market estimates were for a 0.4% drop.

This is the first negative inflation reading since early 2021 in the middle of the Pandemic.

The latest batch of inflation data also shows the nation’s producer prices also fell, dropping 4.4% year-on-year.

Chinese authorities have reportedly put pressure on high-profile local economists to avoid discussing negative terms.

This could mean the beginning of a deflationary period that would be very harmful to the economy as it risks a deflationary spiral.

In the latest bonus episode of What’s Not Priced In, Greg sits down with Rob Parker, founder of Nuclear for Climate Australia, to talk about the energy transition and what’s missing from the picture.

Australia aims to increase the share of low-carbon power generation to 82% by 2030 — up from 27% today.

What are the steps to get there, and how realistic is this with the current transmission and storage infrastructure?

See below for an enlightening conversation on the realism of the goals and what we can learn from other countries.

The Commonwealth Bank [ASX:CBA] has posted a record profit of $10.2 billion, up 5% on FY22.

CBA said its interest margins were the main driver of the profit growth — which increased by 0.17%.

However, the bank’s loan impairment expense for bad debts rose by $1.47 billion, which it attributed to cost of living pressures and rising interest rates.

CBA chief executive Matt Comyn said the Australian economy had been resilient to rising interest rates to date, but warned that there were ‘downside risks building’ as the cost of living continues to rise.

Suncorp [ASX:SUN] released its FY23 report this morning, showing the Insurance-banking giant’s cash profits rose 67% to $1.25 billion for the year, but its payout ratio fell to 60% from 75% last year.

The lower payout ratio reflects Suncorp’s ‘disciplined approach to managing capital in the context of the current environment,’ according to CEO Steve Johnston.

The environment he is referring to is the higher costs of its own reinsurance disaster protection, and the delay in completing the sale of its bank to ANZ.

Suncorp is still planning to sell the bank to ANZ for $4.9 billion, but the Australian Competition and Consumer Commission (ACCC) has refused to allow the deal.

ANZ has appealed the ACCC’s decision to the Australian Competition Tribunal.

The cost of separating the bank and other costs has also risen from $500 million to $575 million to finally $600 million.

Suncorp also announced an organisational reshuffle and said that it expects insurance costs to continue to rise.

Wall Street was down overnight as Moody’s Rating Agency downgrades credit ratings for 10 US banks, puts six others on notice.

Moody’s also downgraded over two dozen Aussie banks amid growing concerns of a recession.

ASX opened slightly up 0.07% at 7,316.0

• $AUD down -0.57% at 65.34 US cents
• ASX futures flat +0.03% to 7,248.5
• S&P 500 down -0.42%
• NASDAQ down -0.79%
• DOW down -0.45%
• FTSE down -0.36%
• STOXX up 0.40%
• SSE down -0.25%
• Bitcoin up +2.06% to $US 29,795.30
• Spot gold down -0.56% to $US 1,926.02
• Iron ore down -0.43% to $US 104.73
• Brent Crude flat +0.01% to $U6 85.18pb

All figures shown are from 10:10am AEST