Investment Ideas From the Edge of the Bell Curve
The ASX 200 closed down -0.40% today at 6,948.8.
At close, only the Utilities (+0.34%) sector finished in the green, while the remaining 10 sectors fell. The worst hit today was the Energy sector, down -0.88%.
In the big energy players, Woodside closed down -0.69%, while Santos fell -1.66%. In utilities, Origin (+1.50%), while Mercury gained +0.35%.
In company news, the big movers today were Boral (+5.12%), who gained on the back of upgraded earnings guidance for FY24. APM Human Services fell -12.50% as the fallout continues from its recent warning where it said it was ‘operating in a low-unemployment world’ and as a result, has no major contracts due for renewal in FY24-25.
TPG APM Human Services (-11.74%) also fell heavily after announcing it has ceased discussions with Vocus Group into the proposed buyout of fibre assets.
That’s all from me today, have a great evening and I’ll see you tomorrow.
After a large cyber-attack affecting port operations across Australia over the weekend, the stevedore company DP World has announced that operations are up and running, with 5,000 containers scheduled to be moved today across ports in Sydney, Melbourne, Brisbane and Freemantle.
The company issued a brief statement in which it warned there still could be minor disruptions occurring at the ports.
‘The ongoing investigation and response to protect networks and systems may cause some necessary, temporary disruptions to their services in the coming days,’ the company said in a statement.
‘This is a part of an investigation process and resuming normal logistical operations at this scale.’
‘Importantly, the resumption of port operations does not mean that this incident has concluded.’
‘DP World Australia’s investigation and ongoing remediation work are likely to continue for some time.’
AustralianSuper, the largest majority shareholder in Origin Energy, has rejected an eleventh-hour offer to join Brookfield and EIG in their collective $20 billion takeover of the utility giant.
The offer was lobbed at the majority investor without prior discussion and was rejected within hours.
‘AustralianSuper’s position is unchanged on the upcoming vote on 23 November 2023 as we believe the offer remains substantially below our estimate of Origin’s long-term value,’ it said.
With this latest attempt thrown back, the deal now looks dead in the water.
TPG [ASX:TPG] has seen its shares collapse by 11.65% today after the company announced that it had ceased discussions with Vocus Group.
The Macquarie-backed Vocus group had offered to purchase some of TPG’s fibre assets, including Vision Network, the wholesale supplier of fast broadband.
The deal would have been worth approximately $6.3 billion. Last week TPG said it would continue its strategic review while it manages ‘ongoing strong interest‘ in its assets.
In a statement today, TPG said:
‘The proposed transaction involved considerable complexity and, ultimately, the parties have been unable to reach alignment on the operating model and commercial terms for TPG to have sufficient confidence that a successful transaction can be agreed and executed.’
ANZ released its full-year 2023 result. The company’s statutory profit finished flat at $7.1 billion. Cash profits from operations were up 14% from the year prior, while the company saw an 8% improvement in Earnings per share at 247.1 cents.
The company announced a final dividend of 94 cps, partially franked at 54%. This totals to an 81cps dividend that is partially franked at 65%. The company blamed the low franking amount on the proposed Suncorp Bank transaction and the mixed nature of the business. As recompense, the bank agreed to an additional one-off unfranked dividend of 13 cps.
ANZ Chief Executive, Shayne Elliot said today:
‘Looking ahead, we will continue to manage costs to create capacity for further investment in ANZ Plus, growing our Commercial business and enhancing our sustainability, currency and payments platforms.’
‘The external environment is likely to remain challenging. The full impact of higher interest rates is expected to continue to impact economic activity as well as household and business budgets.’
The ASX 200 is down -0.15% at 6,966.3, surprising some investors, as some market watchers had called for a rise earlier. Losses were seen in interest rate-sensitive sectors of Tech (-0.49%), Financials (-0.48%) and Telecoms (-0.58%).
The worst performer today was TPG, with the telco giant falling by -10.60% after ceasing discussions with Vocus Group, which had lobbed an offer to acquire some of TPG’s assets. TPG blamed the complexity in the deal and a lack of confidence that the transaction would benefit the company.
Boral is up by 7% after an underlying profits upgrade for FY24, pushing up the Materials sector by +0.24%. The top sector this afternoon is Utilities (+0.35%) as Origin (+1.56% )continued its bounce after reaching a multi-month low at the start of November.
‘This has been the experience of some other advanced economies that have been a little ahead of Australia in this inflation cycle,’ Kohler said.
‘The recent increase in fuel prices is also a timely reminder that upside surprises from supply shocks could affect headline inflation. All to say, the road ahead could be bumpy.’
Building products company Boral [ASX:BLD] is this morning’s best performer on the ASX 200, with the stock currently up 8.32% trading at $5.08 per share.
The movement comes after the company upgraded its FY24 earnings guidance, showing underlying EBITA to be between $300−330 million, up from $270−300 million.
Boral will report its full 1H24 results on 9 February 2024. Chief executive Vik Bansal said today:
‘We are pleased to upgrade our FY24 guidance, with year-to-date performance reflecting greater discipline in the pricing and cost from our operating model. Price realisation remains extremely important in the current inflationary environment.‘
‘Volumes year to date have been relatively steady and at this stage, we expect this to continue through the remainder of FY24.’
Major Port operator DP World Australia, which manages container ports in Sydney, Melbourne, Brisbane and Freemantle, has shut down these major ports after a huge cyber-attack.
The company hasn’t given any more details about the event other than saying it detected a breach in its networks on Friday, forcing the company to disconnect its internet to cut off the hacker’s access to the network. This also took down key systems for the port’s operations, such as crane and gate operations.
The government said it ‘fully supports them shutting down that system in the first instance to stop the spread of the threat actor across the systems and ultimately ensure that we have a contained cyber incident to those four locations in the country’.
As a consequence, the company has halted operations until the issues can be resolved, which they have said should be up and running in a few days.
The Federal Government is assisting in the effort with the Australian Cyber Security Centre providing technical advice to the company.
‘DP World have been working with government to try to resolve this and in ways that will make sure that this doesn’t impact as much as possible on Australians,’ the home affairs minister Clare O’Neil said.
Good morning all, Charlie here
The ASX 200 opened flat this morning as futures point to a slower day on the market after Wall Street finished last week on a roaring day that saw huge gains across tech.
The Fed’s dovish stance of giving an inch was taken by a mile, with bond yields falling and stocks recovering to levels seen before the October losses.
U.S. 10-year bond yields fell again but have recovered slightly, up +3bps to 4.65%. Fed Chair Jerome Powell has seemingly undone much of his work with comments the week prior when he stated that the high bond yields were doing much of the work of the Fed and hinted that they are more reserved to hike.
The market has seen this as the Fed is reluctant to shift interest rates again and has sent yields down and equities running again. Now Jerome Powell has come back into the spotlight saying he’s ‘not confident’ he’s done enough to slow the pace of inflation. At this stage, the market doesn’t believe him.
The market is now pricing in ~100 basis points of Fed rate cuts through 2024.
Australian 10-year bond yields rose +14bps to 4.66%.
Wall Street: Dow +1.15%, Nasdaq +2.05, S&P 500 +1.56%.
Overseas: FTSE -1.28%, STOXX -0.75%, Nikkei -0.24%, SSE -0.47%
Gold price movement has slowed after its volatility during the beginning of the Middle East crisis. Today it’s up +0.15% to US$1,941.11. Silver rose +0.25% to US$22.32.
The Aussie dollar rose +0.06% to US63.65 cents, seemingly finding a floor in its -2.31% drop last week.
Bitcoin is up +0.90% to US$37,153.12, moving strongly into bull market territory, we are seeing movement in Altcoins as well as the market awakens from its crypto winter.
Oil prices bounced off their monthly lows seen on the 8th. Brent rose +0.33% to US$81.70, while WTI Crude rose sharply +2.13% to US$77.35.
Iron ore rose +0.54% to US$128.07 defying market expectations and hitting a 6-month high. The world’s top steelmaker, Guo Bin, President of state-run China Minerals Resource Group, said that iron ore prices are ‘unreasonable’ at this level.
4:44 pm — November 13, 2023
3:46 pm — November 13, 2023
3:36 pm — November 13, 2023
3:24 pm — November 13, 2023
1:57 pm — November 13, 2023
12:21 pm — November 13, 2023
11:11 am — November 13, 2023
11:00 am — November 13, 2023
10:29 am — November 13, 2023
Investment ideas from the edge of the bell curve.
Go beyond conventional investing strategies with unique ideas and actionable opportunities. Our expert editors deliver conviction-led insights to guide your financial journey.
All advice is general in nature and has not taken into account your personal circumstances. Please seek independent financial advice regarding your own situation, or if in doubt about the suitability of an investment.
The value of any investment and the income derived from it can go down as well as up. Never invest more than you can afford to lose and keep in mind the ultimate risk is that you can lose whatever you’ve invested. While useful for detecting patterns, the past is not a guide to future performance. Some figures contained in our reports are forecasts and may not be a reliable indicator of future results. Any actual or potential gains in these reports may not include taxes, brokerage commissions, or associated fees.
Fat Tail Daily is brought to you by the team at Fat Tail Investment Research
Copyright © 2024 Fat Tail Daily | ACN: 117 765 009 / ABN: 33 117 765 009 / ASFL: 323 988