The latest market news, commentary and strategy by Adrian Rowney
5 Things that Grabbed my Attention
1. Newcrest (NCM) has formally rejected Newmont's takeover proposal; not sure why it took them this long!....I predict Newmont will be back with a sweetened deal as they need Newcrest's long life mines and reserves. NCM is a BUY
2. Sonic HealthCare (SHL) - doctors are sending their customers off to get every test under the sun done these days, so SHL will continue to cream it for years to come. BUY.
3. NSW government has released its demands that coal miners sell a certain percentage of output to them @ $125 per ton...YanCoal (YAL) announced it has to hand over 310,000 tons per quarter - not the end of the world. I maintain my BUY.
4. WhiteHaven (WHC) made a whopping $1.7bn net profit over the past 6 months and is now sitting on cash of $2.5bn - yet the directors decided to only pay a 32c dividend which works out at around $274 mil - they could have comfortably paid a $1.00 dividend....I hope they are keeping this mega pot of cash to make a bid for BHP's remaining coal assets that are up for sale. BUY
5. New Hope (NHC) said they have been fielding a bunch of enquiries for its thermal coal from China but does not have any spare to sell....I doubt prices are going to fall further - and wouldn't be surprised to see a bounce. BUY
ASX Market Update
ASX 200 up 58 points to 7410
Our market recovered a bit of the previous sessions losses as there was a bit of excitement that the RBA may ease up on the rate hikes as 11,500 Aussies got sacked last month....Kind of perverse isn't it - that bad news can sometimes be treated as a godsend by investors.
Onto the big movers: Sonic (SHL) & packaging company Orora (ORA) surged 14% each on better than expected results/outlooks, while AMP posted yet another stinker - sending its stock down 13%.
Random Observation
Classic response...
Charlie Munger asked about long-term valuations: "I don't worry about it too much, because I will be dead" pic.twitter.com/g027bZT7hd
— ForexLive (@ForexLive) February 15, 2023
#For those that don't know - Charlie is Warren Buffet's right hand man.
The Day Ahead
Reporting today: BBN, QBE, ING, WBC
- Our SPI is down 11 points
- Bitcoin up 2.2% to $24,756
Movements affecting our resource stocks today (USD)
- BHP in the US up 0.67%
- Gold FLAT @ $1847
- Paper Silver FLAT @ $21.60
- Copper up 2.87% to $4.12
- Brent Crude down 0.82% to $84.65
- Iron ore up 0.9% to $124.74
Asian Market Update
Hong Kong up 0.84%, China down 0.96% and Japan added 0.71%
Bouncing back quickly...hard not to be BULLISH energy as China opens back up.
China’s air passenger trips in Jan reached 74.5% of 2019-level pic.twitter.com/Gugou5FFNb
— Cathy Yuan Zhang (@CathyYuanZhang) February 16, 2023
Global Market Update
US Market
DOW down 431 points to 33,696
US stocks rolled over as the Producer Price Index (measure of wholesale prices) came in hotter than expected....This would indicate that inflation is getting really sticky, so more interest rate rises are coming.
European Markets
Brits up 0.18%, Germans added 0.18% and Frenchies put on 0.89%
The FRENCH stock market called the CAC, rallied to an all time high overnight as a number of large caps reported better than expected earnings.
Key Market Summary
