ASX News Live | ASX 200 Opens Down in Another Choppy Day of Trading; Wall St Breaks Losing Streak; Air NZ, SUN, PME Feature

The ASX 200 closed down 0.54% at 7,038.2 at its lowest value since the 11th of July this year, as markets struggled to regain ground after the Fed’s decision to keep rates in the US ‘higher for longer’ last week has undercut market sentiment.

The CPI data due out tomorrow will also be affecting the ASX today, as well as high fuel prices that have raised fears about a resurgence of headline inflation.

Health Care (+1.08%) and Financials(+0.14%) were the only two sectors that remained in the green today, while the worst hit were the interest rate sensitive Tech (-1.93%) and Materials (-1.66%).

In company news, Qantas shares fell again today, down -1.43% and -17.39% this month alone, after the company warned yesterday that higher fuel costs were likely to push costs and ticket prices up in the future.

Air New Zealand was also down -1.43% today with a similar warning about fuel costs.

Pro Medicus saw its share price leap today, up by 11.81% after it announced it had signed a 10-year contract with a major Texas healthcare provider to provide its cloud-based image software platform.

The materials sector saw big losses today. In mining, Megaport was down 1.15%, Chalice Mining fell 5.17%, and Syrah Resources continued it’s slide falling 5.32%.

 

The debt-ridden Chinese property developer giant Evergrande’s woes got a lot worse overnight.

The company shed 25% of its value yesterday, bringing its total losses to 87% in less than a month.

The developer has been in a death spiral for some time now after first missing its dollar bond interest payment and then announcing its debt restructuring plan.

Evergrande then relieved investors after saying it had ‘resolved’ a coupon payment for an onshore bond but then missed the September 23rd deadline.

Since then, the former CFO and CEO have allegedly been detained by the police and face a likely probe for the default.

But the troubles have not finished at Evergrande. In what has been dubbed the Evergrande contagion, the fall of one developer giant has led to huge price drops across the sector, with other giants, such as Country Garden, also struggling to pay their debts and remaining on the brink of default.

Country Garden was given a temporary reprieve from paying Chinese creditors last week after an approved extension on repayments for a set of bonds.

Now, it seems the political class is fed up trying to protect the giant developers, with raids occurring across many of the large developers and widespread allegations of fraud beginning to come to light.

Evergrande’s wealth management unit in Shenzhen, southern China, was raided at the weekend. Several of its staff have been detained on suspicion of ‘illegal fundraising’.

‘Recently, public security organs took criminal compulsory measures against (general manager) Du (Liang) and other suspected criminals at Evergrande Financial Wealth Management Co,’ Shenzhen Nanshan District Police Bureau said on Saturday.

Ultimately, the housing sector is a failure of the centralised planning occurring in Shanghai. Looking at research done by Carnegie, we can see that government over-support pushed the property sector into becoming 25-30% of the country’s GDP. Compare that to the US’s 5%, and you can see that China simply built more houses (of dubious quality as well) than the population was able to absorb.

 

 

Coal miner Coronado Global Resources [ASX:CRN] saw its shares jump by 3% today after it announced it had signed an agreement with Prague-based Sev.en Global Investments.

Sev.en will buy a 51% stake in the Brisbane-based miner from the Energy & Minerals Group (EMG).

‘We believe that Coronado has established a successful business strategy and we will support the company in continuation of its business strategy to grow and strengthen its position both in the U.S. and Australia,’ Sev.en chief executive Alan Svoboda said in a statement.

Coronado was founded in 2011 by EMG and currently produces over 16 million tonnes of coal from several mines located in both Australia and the United States.

The acquisition is still subject to customary closing conditions, including regulatory approval from the US and Australia.

 

Dan Andrews announced his resignation today, saying his time in office was the ‘honour and privilege of his life’.

The resignation will come into effect at 5pm tomorrow. He commented on the decision today, saying:

‘To have been premier for nine years and the leader of my party for 13 years is a greater set of opportunities than I ever thought would be afforded to me, a kid from the country with only really an aspiration to do good, to work hard, to work with teams of people to perhaps make things better.’

Dan Andrews said that the Labor caucus will meet at midday tomorrow to decide his successor but refused to speculate on who that would be.

The latest from the ANZ-Roy Morgan Consumer Confidence survey shows general consumer confidence fell 3.4pts, with all subindexes down.

It seems petrol prices have weighed on consumers who are expecting the latest CPI data to show inflation back on the rise.

The average price of regular unleaded in Melbourne yesterday was $2.2 per litre, which is a record high.

Motorists have been warned that prices are likely to remain high until the end of the year.

The issues are a compounding one for Australians as supply cuts from OPEC+ (mainly Russia and Saudia Arabia) have been extended until the end of December.

On top of this, there have been issues at refineries in Singapore and Malaysia, which have meant that our supply will likely see shortages and higher prices until the end of the year.

For a full breakdown of prices across the major cities, click here.

ANZ-Roy Morgan Consumer Confidence fell 3.4pts. Each subindex was down. Inflation expectations rose to 5.4%, reversing the falls of the last 2 wks. This is likely to be of interest to the RBA, given petrol prices have averaged over $2/L for 6 wks. #ausecon @madelinedunk pic.twitter.com/uuKcExFiNr

— ANZ_Research (@ANZ_Research) September 25, 2023

The ASX 200 has slipped down 0.5% this morning but has begun to recover slightly. The ASX 200 is currently down 0.35% at 7,051.

The ASX 200 is trading near its lowest level in 10 weeks, with Real Estate (-1.82%) and Tech (1.64%) the biggest sector losses this morning.

In company news, Qantas continues to slide, down 1.72% after signalling higher costs. The airline has a long list of big expenses coming up, including new planes, potentially record-breaking fines, and $200 million more in fuel costs for the remainder of this year.

Liontown Resources is down 2.67% after news of Gina Rinehart’s increased stake in the company, which is seen as a large complication in the Albermarle takeover.

Talon Energy is up by 4% on news it has started exporting gas from its WA-based Waylering gas field, which it shares with joint venture partner Strike Energy, which also rose 0.5%.

The Healthcare sector is one of the few bright spots today, with Pro Medicus up 9.4% after signing a $140 million 10-year deal with Baylor Scott & White.

Air New Zealand is down 1.4% after the company echoed Qantas’s announcement yesterday, expecting higher fuel costs in the coming year.

Gina Rinehart has increased her stake in Liontown Resources [ASX:LTR], complicating Albemarle’s $6.6 billion takeover bid. Rinehart’s Hancock Prospecting now holds a 10.69% stake in Liontown, up from 7.72% on September 11, just after the Liontown board accepted Albemarle’s $3-a-share offer.

Mrs Rinehard, Australia’s richest person, has been buying Liontown shares at $3 since September 11, and yesterday alone spent more than $132 million for about 44 million shares. The share market raid came just hours before Hancock delivered a stinging assessment of Liontown’s ability to hit targets and successfully operate.

Hancock said late on Monday that it wanted a big say in the future of Liontown while spelling out concerns about Liontown’s flagship Kathleen Valley project in the northern goldfields of Western Australia. Hancock said it had not bought any shares above the Albemarle asking price of $3 in acquiring its stake over a period when lithium prices have slumped.

Hancock cast doubt on whether Kathleen Valley could be delivered on time and budget and operated successfully without its help. Hancock does not operate underground mines but said it had “demonstrated project development and operations ramp-up capability”, chiefly through the successful delivery of the $10 billion Roy Hill iron ore project.

Hancock has signalled it would seek a seat on Liontown’s board, depending on what happens in the Albermarle takeover offer.

Whatever happens, things got a lot harder for Liontown to execute.

Suncorp Bank [ASX:SUN] CEO Clive van Horen has announced his departure just before the annual general meeting was set to begin in Brisbane.

The announcement comes amidst the contentious sale of the banking arm of Suncorp to ANZ, worth approximately $4.9 billion.

Mr van Horen, who has been a vocal advocate of the sale, appears to be frustrated as the ACCC blocked the sale, citing competition reasons in its judgement.

The decision is now under appeal, but it appears it will not happen soon enough for Mr van Horen, who some had thought was hoping to join ANZ after the sale.

This is not the first time Suncorp has faced an unexpected CEO jump, with his predecessor Lee Hatton leaving the role back in 2020 after only two months to join Afterpay.

Suncorp has said they still hope the deal will progress after the appeal, with expectations of the deal completing mid-CY24.

 

 

Australia’s Federal Court has fined ANZ $15 million for misleading customers over the funds available in credit card accounts.

The Australian Securities and Investment Commission (ASIC) filed the case in 2022, alleging that almost 166,000 ANZ customers were charged cash advance fees and interest for withdrawing money they believed they had in accounts based on incorrect account balances.

The ASIC said some customers were charged thousands of dollars in fees as a result, with the total averaging around $47 per customer.