by Paul Sanger
At the closing bell, the S&P/ASX 200 was 0.52 per cent or 35.10 points higher at 6794.30.
The lithium and green metals sector was on fire today, after electric vehicle maker Tesla beat profit expectations and forecast annual sales growth around 50 per cent for the foreseeable future.
Lithium stocks continue to outperform as the demand/supply dynamic continues to play out despite volatile equity markets.
Data from the Shanghai Metals Market showed that demand for battery-grade lithium carbonate increased during July as downstream battery factories and auto manufacturers increased their operating rates.
At the same time, battery producers reported lower inventory readings as raw material purchases were not able to keep up with battery output.
Core Lithium (ASX:CXO) closed up 6.5 per cent to $1.065.
Sayona Mining (ASX:SYA) closed up 18.75 per cent to 19c.
Liontown Resources (ASX:LTR) closed up 11.21 per cent to $1.24.
Vulcan Energy (ASX:VUL) closed up 8.76 per cent to $7.08.
Pilbara Minerals (ASX:PLS) closed up 3.23 per cent to $2.56.
Lake Resources (ASX:LKE) closed up 6.43 per cent to 74.5c.
European Metals (ASX:EMH) closed up 5.33 per cent to 79c.
The big iron ore miners were some of the larger losers, amid a billion dollar tax settlement with the ATO for Rio Tinto (ASX:RIO) (down 2.1 per cent), and reports that China’s steelmakers are close to forming an iron ore purchasing cartel.
Best and worst performers
The best-performing sector was Information Technology, up 3.15 per cent. The worst-performing sector was Energy, down 2.83 per cent.
The best-performing stock in the S&P/ASX 200 was Telix Pharmaceuticals (ASX:TLX), closing 20.65 per cent higher at $6.72. It was followed by shares in Zip Co (ASX:ZIP) and Kelsian Group (ASX:KLS).
The worst-performing stock in the S&P/ASX 200 was Imugene (ASX:IMU), closing 5.66 per cent lower at $0.25. It was followed by shares in Woodside Energy (ASX:WDS) and Sims (ASX:SGM).
Global markets
Asian equities are trading mixed Thursday. Japan is set to close at a month-long high. Greater China is lower, as financials and energy stocks offset gains in technology. South Korea is higher, and Taiwan is the regional leader. Southeast Asia is mixed, with India opening higher.
US and European futures are higher, the latter after Russian gas began flowing in the Nordstream pipeline.
Treasury yields are mixed.
Commodities and currencies
Crude blends are slightly lower. Precious metals are lower, with gold below 1.7K.
Other commodities are weaker, and cryptocurrencies are lower.
Gold is trading at US$1692.72 an ounce.
Iron ore is 1.1 per cent higher at US$97.55 a tonne.
Iron ore futures are pointing to a rise of 0.6 per cent.
Light crude is trading $0.43 lower at US$99.38 a barrel.
One Australian dollar is buying 69.05 US cents.
The US dollar is notably lower. The yen is flat post the BoJ decision. The Euro and pound are both higher.
Economic news
The Bank of Japan left policy unchanged as expected, while maintaining easing bias and yield curve control policy.
The central bank upgraded inflation forecasts and lowered GDP projections, in line with source reports. There was scant mention of exchange rate, with the BOJ seeing two-way risk to prices from yen fluctuations.
Widening policy differentials between the BOJ and other central banks was seen, heaping more pressure on the yen, particularly with the ECB lift-off tonight expected to entail a 25 bp hike.
Company news
Pureprofile (ASX:PPL) announced its FY22 business update for the period ended 30 June 2022. Continuing the trend of strong growth, PPL achieved an (unaudited) full year revenue uplift of 39 per cent to $41.7m, and EBITDA improvement, up 28 per cent to $4.0m. Net cash from operating activities was $3.9m for the year, up from $2.4m on pcp, resulting in a strong closing cash balance of $5.3m. The company delivered record revenue for the year, driven by strong growth from both new and existing clients across all markets. Shares in PPL closed up 4.44 per cent at 4.7c.
Orthocell (ASX:OCC) recently signed a global exclusive licence and distribution agreement with BioHorizons Implant Systems Inc, one of the largest dental implant companies in the world. In consideration of the licence granted, Orthocell has received in cash $21,461,686 million (USD $14,774,225 million), net of fees. Orthocell Managing Director Paul Anderson, said: “We are delighted to have received funds from BioHorizons, solidifying our cash position with A$31.23 million on hand as at 20th of July, enabling us to drive the further development of our Remplir nerve product and pipeline of regenerative medicine products.” OCC shares closed up 1.32 per cent at 38.5c.
Musgrave Minerals (ASX:MGV) reported further assay results from diamond and aircore drilling programs on the Cue Joint Venture with Evolution Mining in Western Australia’s Murchison district. Musgrave Managing Director Rob Waugh said: “This is another strong set of results and highlights the high-grade tenor of the gold systems at West Island. The drilling confirms the presence of multiple basement gold lodes and ongoing drilling is aimed at defining the grade and continuity of individual lodes within the host dolerite sill. To complement these results aircore drilling continues to identify new untested areas of gold anomalism below the cover sequence along strike from known mineralisation.” Shares in MGV closed up 4.17 per cent at 25c.
ANZ Banking Group (ASX:ANZ) has raised $1.7 billion from institutional investors via the issue of around 89 million new shares as part of a $3.5 billion raising to help acquire Suncorp Bank (ASX:SUN). It said approximately 95 per cent of entitlements available to institutional shareholders were taken up. The entitlements not cleared were sold in the institutional shortfall bookbuild at $21.65 per new share, which was $2.75 above the offer price of $18.90 per share. Shares in ANZ closed up 1.34 per cent at $21.93.
Santos has posted record sales and free cashflow. Santos (ASX:STO) has nearly tripled free cashflow to US$1.7 billion on record first half sales, up 85 per cent to US$3.8 billion for the six months to June 30. The gas producer posted US$843 million of free cashflow in the second quarter, slightly ahead of the first quarter. Over the second quarter it produced 25.5 million barrels of oil equivalent (mmboe), which was slightly lower than the first quarter. Shares in STO closed down 1.89 per cent at $7.25.
Bega Cheese (ASX:BGA) has responded to multiple questions from the ASX’s listings compliance team around its continuous disclosure obligations being met over June and July prior to a July 13 profit warning. The company said it provided earnings guidance for FY 2023 as soon as its forecast modelling process was complete and after it considered its continuous disclosure policy to provide investors with information on the company’s business in FY 2023 on a basis of reasonable and properly considered assumptions. It also said it took the earliest possible opportunity to assess the impact of higher milk prices on its earnings for FY 2023. Shares in BGA closed up 1.49 per cent at $3.40.
Newcrest Mining (ASX:NCM) meet full year gold output target, but fell short on copper production following a “strong fourth quarter” that included a record cost performance by its Cadia mine in New South Wales. Gold production for the 12 months to June 30 came in at 1.95 million ounces, down on FY21’s 2.1m ounces, but within the guidance range. Copper production was 3 per cent lower than FY22 guidance at 121,000 tonnes, predominantly driven by lower mill throughput at Red Chris and Telfer. Shares in NCM closed up 1.63 per cent at $19.35.
Telix Pharmaceuticals (ASX:TLX) has recorded $22.5 million in global sales for its Illucix cancer imaging and diagnosis product. Net cash outflows for the June quarter were $25.8 million and as at June 30 it had cash on hand of $122.6 million. Shares are up 643 per cent over the past five years. Shares in TLX closed up 20.65 per cent at $6.72.
Liontown (ASX:LTR) went into a trading pause this morning while it announced to the market that LTR and Lycopodium have executed an engineering, procurement and construction management agreement under which Lycopodium will deliver the EPCM services for the processing facilities and associated non-process infrastructure at Kathleen Valley. The EPCM contract is valued at $35 million based on the agreed scope, is on terms consistent with the assumptions in the LTR’s DFS and includes fixed and reimbursable portions to ensure greater cost certainty for project engineering. The award follows the board’s decision to make the Final Investment Decision to proceed to develop Kathleen Valley in June 2022. Shares in LTR closed up 11.21 per cent at $1.24.
Asra Minerals (ASX:ASR) has received an interim mineralogical report confirming the company’s Yttria clean heavy rare earths elements (REEs) discovery at its flagship Mt Stirling project in Western Australia is conducive to low-cost processing. The QEMSCAN-MLA (Mineral System Liberation Analyser) report by JK Tech at the University of Queensland analysed 10 exploration samples containing elevated rare earth elements and yttrium (a rare earths pathfinder) from Asra’s Yttria discovery. Shares in ASR closed up 4.55 per cent at 2.3c.
Futures
The Dow Jones futures are pointing to a rise of 58 points.
The S&P 500 futures are pointing to a rise of 7 points.
The Nasdaq futures are pointing to a rise of 16 points.
The SPI futures are pointing to a rise of 16 points when the market next opens.
