ASX News LIVE | ASX to Rise; McGrath, MMA, and Star Entertainment Feature

The ASX 200 inched closer to its all-time high on Monday, driven by a risk-on sentiment that attracted investors to sectors like real estate and tech. The ASX 200 closed +0.53% higher at 7811.9, nearing the record of 7848.7 set earlier this month.

The rally followed similar bullish runs in other markets as Central Banks appeared more likely to cut in 2024.

The real estate sector gained 1.8%, led by Goodman Group’s 3.7% rise. Oil stocks also climbed, with Santos and Woodside advancing. Fortescue rose 3.5% as chairman Andrew Forrest signalled plans to develop copper assets.

ALS revealed plans to fully acquire troubled European drug research business Nuvisan, causing its shares to drop 4.8%. McGrath’s board backed a Knight Frank and Bayleys takeover offer, sending its shares up 24.5%. MMA Offshore received a takeover bid from Cyan Renewables, boosting its shares by 10.6%.

Sims gained 2.6% after UBS upgraded the stock. Silvercorp’s bid for OreCorp failed, paving the way for Perseus Mining’s rival offer. Star Entertainment fell 2.8% amid an inquiry into its Sydney license, causing the CEO and CFO to leave today.

Chocolate lovers may want to stock up on their chocolate eggs this Easter as the price of cocoa continues to spike.

Supply issues in West Africa, particularly Ghana and Ivory Coast have meant that the price of the key ingredient cocoa has more than doubled in the past three months.

Ole Sloth Hansen of Saxo Australia said adverse weather and higher input costs were to blame:

‘The past year has introduced challenging weather conditions in these countries, particularly intense heat, which has negatively impacted cocoa production.’

 

‘Furthermore, the escalating costs of pesticides and fertilisers have imposed financial strains on farmers, making it harder for them to procure these vital components for crop maintenance.’

The spiking cocoa prices are unlikely to affect Easter chocolate prices as it usually takes longer for the costs to be reflected in the retail pricing.

But for those who love the stuff, Easter may be the best time to stock up on discounted chocolate for a while.

Cocoa is the new crypto pic.twitter.com/bdo1lLYXpe

— David Ingles (@DavidInglesTV) March 23, 2024

Pilbara Minerals [ASX:PLS] has signed a binding term sheet with Ganfeng Lithium Group Co. Ltd to jointly conduct a feasibility study on establishing a 32,000 tonnes per annum lithium conversion plant.

The key highlights of the deal are:

• The feasibility study will evaluate location, incentives, process flowsheet, sustainability, and economics for the potential downstream conversion facility.
• It is expected to be completed by Q1 2025, with an option to proceed to a final investment decision and form a 50:50 joint venture thereafter.
• Pilbara Minerals will supply 300,000 tonnes of spodumene concentrate annually as feedstock if the JV proceeds.
• The partners are open to exploring benefits under the U.S. Inflation Reduction Act via potential equity sell-down.
• No capital investment is required until FY2026, subject to a positive final investment decision.

This deal marks a key milestone in Pilbara’s downstream strategy, allowing it to capture more value across the battery supply chain.

We will partner with @GanfengOfficial to complete a joint Feasibility Study for a potential downstream conversion facility to produce lithium chemicals. Ganfeng is one of the world’s leading lithium chemical converters 👉https://t.co/7hqUW9d4xe pic.twitter.com/Qa6XVanqoN

— PilbaraMinerals (@PilbaraMinerals) March 24, 2024

The ASX 200 is up by +0.50% as the main index retakes 7,800 today amid rising tech (+1.44%) and real estate (+1.15%).

Major caps CSL (+1%), Fortescue (+2.92%) and Goodman Group (+2.31%) also helped lift the index as a broad rally helped the market move higher.

Movements in copper helped shift up miners like Fortescue and Rio Tino, which also rose 1% today.

In individual stock news, MMA Offshore is up by +11.5% as the oil and gas contractor received a takeover offer from Seraya Partners subsidiary Cyan Renewables.

McGrath is also up +25.5% after its board backed a takeover offer from suitors Knight Frank and Bayleys.

Scrap metal recycler Sims is up by 2.3% after a note from UBS hinted that the company was likely to sell its UK unit for above book value in a deal.

Troubled casino operator Star Entertainment Group [ASX:SGR] has announced the departure of CEO and Managing Director Robbie Cooke and CFO Christina Katsibouba.

The decision comes after the company faces fresh scrutiny from the NSW Commission as it attempts to regain its casino licence in NSW. The state’s gambling regulators have reappointed Adam Bell to look into the suitability of the casino requiring its licence.

The NSW’s previous inquiry found widespread money laundering and fraud as the casino allowed foreign criminals to launder through it, in what AUSTRAC described as ‘alleged serious and systemic non-compliance with Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) laws’.

Shares in the company are up by nearly 1% around midday as investors hope the change of leadership will breathe new hope into the company, taking a fresh path and requiring its licence.

Mr Cooke said today:

‘Whilst I find the position exceptionally disappointing, I have reached the conclusion that my continuation in the Group CEO role is not going to be conducive to the NICC determining to find The Star capable of becoming suitable to hold a casino licence in NSW.’

Shares of McGrath [ASX:MEA], a listed real estate agency, surged after the company’s board agreed to a takeover offer from rivals Knight Frank and Bayleys.

Shares are up by 25.5% in this morning’s trading, at 59 cents per share, their highest value since February 2022.

What’s next?

The board, which holds a 48.1% stake in the company, has backed the offer of 60 cents per share from the suitors. Prior to the offer McGrath’s shares had traded at 47 cents per share.

Shareholders have the option to opt for an unlisted scrip offer instead of the cash offer. The company stated that founder and CEO John McGrath will choose the unlisted scrip alternative for his 23.3% stake and will continue in his role as the Chief Executive Officer.

The company’s shares have faced challenges since its listing in 2015 amid a volatile property market and numerous management changes.

Commenting on the news today, McGrath Chair, Peter Lewis, said:

‘In considering the merits of the Scheme, the Directors have been committed to acting in the best interests of shareholders. Our view is that the Scheme represents an excellent outcome for McGrath shareholders, customers, our agents and staff.’

Good morning. Charlie here,

The ASX 200 opened up +0.47% to 7,807.1 as US markets closed on a muted session on Friday. We’ll be watching energy and mining stocks today to see if they recover from losses seen last week.

In Australia the Federal government will push for a minimum and award wage increase that will keep pace with inflation. The minimum wage is currently at $23.23 per hour after the award minimum increased by 5.75% last July.

Treasurer Jim Chalmers said:

‘While we’ve made welcome progress on inflation and seen a return to real wages growth earlier than forecast, many Australians are still under pressure – particularly low-paid workers.’

On Wall Street, the markets closed with a weaker Friday, but overall, last week’s markets ended strong after the Fed’s indication of cuts coming. The S&P 500 closed with its biggest weekly gain of 2024.

Meanwhile, FT reported that the trend of insider tech billionaires continued their stock sell-offs last week with insider selling now hitting its highest level in three years.

While this could signal that tech has reached a peak, Goldman Sachs strategists said they saw big tech pushing the markets up another 15%.

Bond yields continued to fall in the US, with the US-10-year yield now down for a fourth straight session.

Wall Street: S&P 500 -0.14%, Dow -0.77%, Nasdaq +0.16%.

Overseas: FTSE +0.61%, STOXX -0.42%, Nikkei +0.18%, SSE -0.95%.

The Aussie dollar fell -0.03% to US 65.12 cents.

US 10-year bond yields -7bps to 4.20%.

Australian 10-year bond yields -9bps to 3.99%.

Gold rose +0.07% to US$2,166.94, while Silver was flat at US$24.68.

Bitcoin rose +3.37% to US$66,951, while Ethereum rose +1.81% to US$3,441.

Oil Brent rose +0.15% to US$85.56, while WTI Crude rose +0.06% to US$80.68.

Iron ore fell -1.6% to US$108.05 a tonne.