ASX News LIVE | ASX to fall; Bitcoin Surges to Two Year High, South32 Sells $2.5b Mine

The ASX 200 closed up +0.50% at 7,698.7 after an afternoon recovery despite mixed profit results and disappointing retail sales figures for January.

The ABS released the latest retail data for January, showing a rise of 1.1%, after a 2.1% fall in December. The data brings retail numbers back to September levels and shows that consumers focused discretionary spending heavily on Black Friday sales.

10 out of 11 sectors closed in the green, with only Utilities falling at close, down -0.33%.

The top performing sector today was Real Estate, up 1.73% after mega cap’s Goodman Group gained 3.49% and Landlease gained 3.4%.

The big surprise today was Harvey Norman, which closed up 5.10% despite mixed results.

Why were investors so keen on the stock today? What is a clear point for a turnaround? I’m not so sure.

Some people have pointed the finger at intentionally convoluted earning reports that hid the statutory profit numbers on the bottom of page 27 of its 57-page report.

The company’s net profits after tax was $200 million, down 45% on the same period a year earlier. Still, the company boasted positive numbers of growing assets and ‘a strong property portfolio of $4.51 billion‘.

Ramsay Health [ASX:RHC] has seen its shares jump by 7.4% in trading today as it released its half-year results.

The healthcare provider’s revenue increased by 13.8% to $8.1 billion for the half year, but its Earnings before tax fell 4.7% to $512 million.

Statutory Net profit after tax jumped 290% to $759 million, while NPAT declined 23% to 140.4 million.

These were normalised after prior non-recurring items, and results showed a steady increase in revenue earnings across its operations.

In the company’s outlook, it said it expects Earnings in Australia to improve by mid-single-digit volume growth while cost-saving initiatives begin to flow through.

The ASX 200 is flat around miday, down just -0.08% to 7,654.0 as markets remain in a holding pattern until the US’ inflation data is released.

A first look at what could be in store was given with US GDP data, which showed 4Q GDP growth at 3.2%, not far off the consensus estimates of 3.3%.

Markets are currently pricing the first Fed cut in its June meeting, according to the CME’s FedWatch tool, although it’s been shifting in recent weeks.

On the ASX, the sectors were fairly split with Real Estate (+0.83%) and Discretionary (+0.69%) leading, while Materials (-0.70%) and Utilities (-0.61%) lagged behind.

In individual performances on the index, Macquarie Technology is the biggest gainer this morning, up by 8.82% followed by EML Payments, up 7.18%.

While Droneshield reversed its huge gains yesterday with a -20.43% selloff after releasing its latest earnings report.

The Big Four Banks and large-cap miners remained relatively unchanged today.

Australia’s largest white goods and home retailer, Harvey Norman [ASX:HVN], has seen a sharp decline in its total sales and earnings in the first half of 2024 but remained positive in its latest update.

EBITDA fell by -31.8% to $221 million, down from $694m in 1H23.

While profits after tax finished the half at $200million, down from $365.9 million in 1H23.

The brunt of the fall was due to a 40% fall in profits derived from Australian franchisee payments, which account for almost half of the group’s yearly profits.

Despite these falls, executive chairman Gerry Harvey said the company’s $4.14 billion property portfolio and $7.86 billion assets put it in a strong position.

“Amid the challenging retail conditions in (the first half of financial year 2024), we have continued to deliver sustainable growth in net assets, rising to $4.51 billion as at 31 December 2023, a substantial increase of $1.23 billion since the start of the pandemic.”

Investors seem to agree with the sentiment, with the share price up by nearly 6% in this morning’s trading.

Boss Energy [ASX:BOE] has announced the passing of another milestone in the development of its Honeymoon Project with the start of commissioning the first Ion-exchange (IX) circuit within its processing plant.

This, plus other on-site refurbishments, means Honeymoon is now running 24/7 as the company pushes to production ramp-up.

Boss Managing Director Duncan Craib said today:

“The start of commissioning the IX circuit is highly significant because it shows Boss is on track to produce its first drum of yellow cake this quarter.

 

“This key milestone follows the continuous operation of the wellfields, water treatment plant, RO system and required reagents.

 

“We are now in the final stages of putting all the pieces of the project together and remain comfortably on budget and on schedule.”

The next stage is Hydrotesting the new IX circuit which is crucial in the processing of the uranium into yellow cake.

The company has made rapid progress in its Honeymoon Project as it hopes to capitalise on the high uranium prices which steadily rose last year.

NZ cloud accounting firm Xero [ASX:XRO] has seen its shares jump by nearly 5% in this morning’s trading as the ASX 200 opened slightly down.

The company announced the signing of a new partnership with US platform Bill at its investor day today. Bill hopes to be a broad bill and expense management platform and has seen quick growth in NA.

Bill currently has more than 470,000 small businesses using its platform, a market that Xero is now targeting heavily.

Xero also highlighted improving books, with its free cash flow continuing to hold.

Source: Xero Investor day presentation 29-02-24

South32 [ASX:S32] shares are at multi-year lows after disappointing half-year results.

Like much of the sector, the miner has been feeling the pinch from weaker Chinese demand.

In its half-year results, the company saw underlying profits revenues fall -14% and profits after tax collapse -92% to US$53 million, down from US$685 million.

Today the company has announced the sale of its Illawarra Metallurgical Coal Mine to Golden Energy and Resources and M Resources.

The deal is worth approximately $2.5 billion and represents around 7.2x average annual cash flow for Illawarra.

The sale is expected to complete in the first half of FY25 provided it passes the Foregin Investment Review board and other regulatory approvals.

South32 Chief Executive Officer, Graham Kerr said:

“This Transaction will realise significant value for our shareholders and is consistent with our strategy to reshape our portfolio toward commodities critical in the transition to a low-carbon future.”

 

“It will streamline our portfolio, strengthen our balance sheet and unlock capital to invest in our high-quality development projects in copper and zinc. The Transaction will also simplify our business and reduce our capital intensity.”.

Good morning. Charlie here, back after a few days off

The ASX 200 futures point to a fall in the ASX this morning as a weak lead from Wall Street comes as markets await key inflation data from the US.

The market is taking the Fed’s slower stance seriously as the Fed members reiterate that they are waiting for more evidence that inflation is cooling before it moves to cut rates.

Meanwhile, the concern of re-accelerating inflation has pushed some investors to put their bets behind Bitcoin.

A record $520 million stampeded into BlackRock Inc.’s Bitcoin ETF in a single day yesterday as the price of Bitcoin surged to a high of US$63,698 before retreating slightly.

That’s not looming closer to the all-time high of around US$69,000 reached in November 2021.

In Australia, CPI data rose 3.4% in January, with housing among the key contributors.

The figure is the lowest annual inflation since November 2021 and shows a continued deceleration of the pace of inflation. Monthly figures do tend to be more volatile, but it’s a promising sign.

The PM celebrated the passing of the reworked Stage 3 tax cuts, which passed the Senate on Tuesday this week. Lower and middle income households will now receive additional tax relief come July 1^st.

Meanwhile, Treasurer Jim Chalmers gave a warning of weaker GDP figures next week. According to Westpac’s chief economist and ex-RBA deputy governor, the Australian economy may have contracted in December for the first time since the Covid pandemic.

Wall Street: S&P 500 -0.17%, Dow flat, Nasdaq -0.55%.

Overseas: FTSE -0.76%, STOXX flat, Nikkei flat, SSE -1.91%.

The Aussie dollar fell -0.74% to US 64.95 cents.

US 10-year bond yields fell -4bps to 4.26%.

Australian 10-year bond yields flat at 4.12%.

Gold is up +0.23% to US$2,035.05, while Silver is up +0.11% to US$22.47.

Bitcoin jumped +7.80% to US$61,330, while Ethereum rose +2.47% to US$3,345.

Oil Brent fell -0.22% to US$83.47, while WTI Crude fell -0.61% to US$78.39.

Iron ore fell -1.12% to US$116.20 a tonne.