ASX 200 flattish despite real estate stocks rout
Lendlease led the real estate selloff after cutting its guidance
A2Milk surged after strong H1 results
The ASX 200 closed just +0.1% higher on Monday after a selloff in Real Estate stocks was offset by gains in Mining and Comm Services.
The ASX 200 is within striking distance of its all-time high of 7,703, but didn’t get the boost it needed from Wall Street on Friday as US stocks struggled following a surprisingly high PPI reading.
US stocks mostly fell after the PPI (Producer Price Index), a key gauge measuring wholesale inflation, jumped 0.3% in January from the prior month. This was much higher than the 0.1% rise expected by economists.
“If we see continued strength in the inflation data, it’s possible that the Fed could push its rate cuts into 2025,” said Clark Bellin of Bellwether Wealth.
On the ASX today, Lendlease (ASX:LLC) led a rout in other real estate stocks after downgrading its full year guidance – see more below.
Energy related stocks climbed after crude oil prices lifted, amid soaring tensions in the Middle East triggered by Iran’s unveiling of two new air defence systems on Saturday, as per its state media.
Other geopolitical news to digest includes the withdrawal of Ukrainian troops from a city (Avdiivka) in the nation’s east considered to be strategically important. Russia’s Putin hailed the withdrawal as a victory.
Across the region today, Chinese stocks remained on the back foot after traders came back from a week-long lunar new year break today.
BIG CAP WINNERS
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Code Name Price % Change Volume Market Cap A2M The A2 Milk Company 5.63 11.39 9,261,834.00 $3,650,820,780 RWC Reliance Worldwide 4.68 6.12 3,513,205.00 $3,484,317,914 LTR Liontown Resources 1.24 5.53 17,988,499.00 $2,847,317,015 BLD Boral Limited 6.11 4.36 2,820,764.00 $6,453,067,251 QBE QBE Insurance Group 16.68 3.54 1,968,268.00 $24,066,975,644 NEU Neuren Pharmaceut. 20.46 3.41 916,613.00 $2,518,897,471 LTM Arcadium Lithium PLC 7.38 3.36 5,932,379.00 $3,017,290,408 TLX Telix Pharmaceutical 11.36 3.18 649,298.00 $3,567,044,815 HSN Hansen Technologies 5.54 2.97 533,747.00 $1,093,234,227 ILU Iluka Resources 7.45 2.97 2,629,485.00 $3,080,213,543 MP1 Megaport Limited 13.70 2.93 421,487.00 $2,117,951,221
Westpac (ASX:WBC) says its Q1 FY24 unaudited net profit was $1.5 billion, down 6% on H2 FY23 average. Net interest margin was 1.78%, with stressed assets reduced by 4 basis points in the quarter to 1.22%. Customer deposit growth was $7.9 billion and loan growth was $5.6 billion for the quarter. Westpac says it expects the economy to remain resilient, supported by low unemployment and healthy corporate sector balance sheets.
The a2 Milk Company (ASX:A2M) has delivered a positive interim result for H1, with 3.7% revenue growth to $812.1 million, and 5.0% EBITDA growth to $113.2 million. During the half, A2M grew its total infant milk formula sales despite a double-digit decline in China. A2M says FY24 revenue growth guidance has been increased from low, to low-to-mid single-digit percent on prior year.
BIG CAP LOSERS
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Code Name Price % Change Volume Market Cap LLC Lendlease Group 6.35 -15.45 7,722,443 $5,179,138,175 NHC New Hope Corporation 4.65 -8.10 4,415,562 $4,277,397,448 ORA Orora Limited 2.70 -7.07 7,386,476 $3,896,149,823 GPT GPT Group 4.29 -5.71 3,663,326 $8,715,877,307 ING Inghams Group 3.57 -5.69 7,466,764 $1,404,948,892 HMC HMC Capital Limited 6.25 -4.22 375,449 $2,272,680,990 RED Red 5 Limited 0.29 -4.17 8,787,382 $1,039,140,165 RMS Ramelius Resources 1.45 -3.99 4,544,828 $1,715,814,708 IGO IGO Limited 7.20 -3.94 4,749,725 $5,671,935,919 IEL Idp Education Ltd 19.72 -3.90 908,311 $5,711,459,050 ARF Arena REIT. 3.48 -3.87 508,664 $1,285,642,681 SQ2 Block 102.92 -3.81 178,525 $3,795,814,942 BSL BlueScope Steel Ltd 21.99 -3.76 2,104,843 $10,188,925,800 CQR Charter Hall Retail 3.68 -3.66 948,200 $2,220,297,106 NCK Nick Scali Limited 14.57 -3.64 350,921 $1,224,720,000 HDN Homeco Daily Needs 1.23 -3.35 1,550,009 $2,638,754,253 CNI Centuria Capital 1.76 -3.31 394,518 $1,461,207,003 CHC Charter Hall Group 12.01 -3.30 564,457 $5,874,625,212 EMR Emerald Res NL 2.97 -3.26 1,704,809 $1,921,232,070 DXS Dexus 7.63 -2.99 1,470,327 $8,453,942,834 TUA Tuas Limited 3.04 -2.88 183,368 $1,459,765,553
Lendlease (ASX:LLC) plunged today after cutting its return on equity guidance from the one it gave last August to 7%, which is at the “the lower end” of its targeted 8%-10% range. Lendlease’s revenue for the half was $4.733 billion, but it reported a $136m interim net loss for the half, from a $141m net loss in the pcp.
Bendigo and Adelaide Bank (ASX:BEN) reported cash earnings for the half of $268.2 million and statutory net profit after tax of $282.3 million, down 5% and up 13.8% respectively vs the pcp. Net Interest Margin was 1.83%, down from 1.98% on the pcp. Customer deposits grew 3.5% over the half, but total lending was down 0.7% due to “competitive market pressures”.
Cochlear (ASX:COH) reported that its sales revenue for H1 increased by 25% vs the pcp to $1.113 billion, with strong growth in cochlear implants and sound processor upgrades. Statutory net profit increased by 35% on pcp to $191m. FY24 underlying net profit guidance range has been upgraded to $385-400 million, a 26-31% increase on FY23.
BlueScope Steel (ASX:BSL) reported H1 FY24 NPAT of $439 million, a $29 million increase on the pcp. However, outlook for the company in the second half is for a result slightly below H1, with the company citing “unprecedented softness in Asian steel spreads.”
Air New Zealand (ASX:AIZ) has provided a full year guidance on softer forward trading conditions. The airline says the second half of the 2024 financial year will be markedly lower than the first half. AIZ now expects earnings before taxation for FY24 to be in the range of $200 million to $240 million, assuming an average jet fuel price of USD$105/bbl for the second half.
Contact Energy (ASX:CEN) has reported net profit of $153m in H1, and EBITDAF of $354m, both up much higher than the pcp. CEN says the improved operating result was driven by closer alignment of channel pricing to the wholesale market and greater thermal efficiency, partially offset by lower hydro generation, reduced steam revenue following the closure of Te Rapa, and one-off write-offs of $8m relating to damage to Peaker assets.
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