Viewpoint: Bullish
There is some confusion (created by the ASX) around BHP and Woodside (WDS) and while we don’t have all the answers (yet) and MM cannot provide tax advice (please consult your tax adviser), here is what we know. The final distribution was determined at close of trade yesterday based on the ratio of 0.18 WDS shares for each BHP held. The payment is worth $5.36 in shares + $2.35 in franking with the payment (in WDS shares) being made today. The ATO has ruled…
The tech based NASDAQ had a very quiet end to May by its standards, we remain optimistic short term believing the sector has formed a decent platform for at least a few weeks / months corrective rally. Assuming we are on the money here the markets likely to experience a begrudging “risk on” attitude although we believe it will remain choppy at least through June, or as we said earlier “2 steps forward, 1-step back”.
Diversified miner S32 now has some clear exposure to “green metals” including silver (solar panels), copper and nickel with the last 2 essential in electric motors and batteries. The company might not be pure lithium or nickel play like a few alternatives in the ASX but it does generate solid profits and pay an enticing fully franked dividend making it a viable green alternative for fund managers with flexible mandates.
MM went long this battery materials business a fortnight ago just above $11 however it’s important to remember that until further notice we are looking for IGO to test the $15.50-6 area hence we are in no hurry to grab a quick +20% return on this particular holding.
The $A has rallied very strongly over the last few weeks in a positive vote for the “risk on” trade leaving MM bullish looking for another test of the 76c region, another positive read through for stocks.
The UK FTSE Index has evolved from “remained remarkably resilient through 2022 helped by its lack of dependency on tech” to looking destined to make freshy multi-year highs, a great sign for the highly correlated Australian market i.e. the UK index is now only 1.3% below its post COVID high.
SHV -5.85%: a soft day for the almond producer with a disappointing first half result weighing on the shares in SHV. Revenue fell 19% but was still a small beat, but EBITDA at $15.8m was behind expectations. EBITDA was dragged by higher corporate & processing costs which are expected to continue to drag earnings in the near term. Wet weather has hampered their harvesting ability…
BHP commenced trading ex-WDC rights yesterday hence the slight price adjustment, overall it was a nothing session with the stock drifting lower in line with RIO, Fortescue and the overall market. The “Big Australian” like the index has hardly moved in over a year – until further notice a perfect candidate for buy the dip and sell the pop.
Yancoal Australia Ltd is an Australia-based company, which is engaged in producing and developing open cut and underground coal mines in the global seaborne market. The Company operates a diversified portfolio of assets consisting of both large-scale open cut and underground mines comprising of six coal mine complexes in Australia. Its coal mining operations produce a mix of thermal, semi-soft coking, and pulverized coal injection (PCI) coals, together with mid-to-high ash thermal coals. Its thermal coal is primarily used in electricity generation and its end users are typically power and utilities companies. The Company’ New South Wales mines include Moolarben, Hunter Valley Operations, Mount Thorley Warkworth, Stratford-Duralie, Ashton, Austar and Donaldson. Its Queensland mines include Yarrabee and the Middlemount Joint Venture. Its Queensland mines include Yarrabee and the Middlemount Joint Venture. The Company also manages the Cameby Downs and Premier coal mines in Queensland.
Australia’s largest gold player has held up far better than most of its local peers but aggressive investors / traders should recognize its likely to rally less if gold does indeed rally +US100/oz i.e. this is a low Beta play on the gold price. MM likes NCM into any weakness around the $25 area targeting another test of $29 through 2022.
