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A reasonable session today, after an aggressive sell-off yesterday swept through the ASX, and while IT topped the boards, Real-Estate stocks caught our eye with brokers starting to turn more positive on the sector, arguably a bit late, but we agree with the view.
- The ASX 200 added +31pts/+0.40% closing at 7982
- IT (+2.3%), Property (+2%) and Financials (+1%) outperformed.
- Energy (-3.9%), Utilities (-1.6%) & Consumer Discretionary (-0.8%) lagged.
- Mineral Resources (MIN) –5.88% was down again, and no doubt there is some concern about this position (held in the Growth Portfolio). We note short interest is increasing (now over 8% of the register), however, after three aggressive days on the downside, we do not believe it is the right time to scratch our holding.
- Interestingly today, volume hit a peak, larger than the last few days, yet the stock finished $1.10 from its lows. We think MIN will bounce and we’ll get better levels to re-assess our position in line with commentary this morning.
- Woodside (WDS) -6.82% traded ex-dividend today for $1.018 FF = ~$1.44 though the oil price was also hit overnight, with the stock re-testing August lows around ~$25.
- REA Group (REA) +2.24% hit a $222 high last month, pulled back to $197 yesterday down ~10% since considering making a play for UK-listed Rightmove. We think further weakness is more likely in the short term, though we’re keeping a close handle on how all this plays out.
- Coronado Global Resources (CRN) -16% was hit on downgraded FY24 production (Dec year-end), with run rates impacted by rain. Lower production makes for higher unit costs and a lower SP.
- Property stocks were solid today, GPT Group (GPT) +2.9% was upgraded to Overweight at Morgan Stanley and $5.60 PT vs today’s close of $5.05 – we’re long and bullish in the Growth Portfolio.
- Mirvac (MGR) +2.4% and Charter Hall (CHC) +5% were also strong, and we remain keen on the property sector more generally.
- NextDC (NXT) +8.4% rallied strongly, with most articles sighting the AirTrunk sale and valuation as the reason, but that was known yesterday. Instead, it was news they are being included in the NAREIT Real Estate Index in the US.
- Magellan (MFG) -2.2% fell on outflows for August totalling $700m, mostly retail, and mostly connected with the MGF conversion, which was covered when they reported results mid August. Nothing too concerning today.
- Whitehaven Coal (WHC) -0.5% dipped despite JP Morgan upgrading to buy and $9.2 PT, closing today friendless at $6.11
- ANZ Group (ANZ) +2.6% the standout amongst the banks, breaking out and trading to its highest level since 2017.
- Challenger Financial (CGF) –11% fell after their largest shareholder offloaded ~10% of their stake.
- Gold was up $US7, trading back up through $US2500/oz around our close.
- Iron ore futures in Singapore sold off ~3%, trading $US95/mt at our close, breaking its March low – Fortescue (FMG) -0.4 & BHP Group (BHP) +0.7%
- Weakness across Asia, Hong Kong -0.6%, the Nikkei in Japan was down -1%, while China dipped -0.05%
- US Futures are down -0.20%
