by Paul Sanger
At noon, the S&P/ASX 200 is 0.79 per cent or 55.60 points higher at 7103.70.
The SPI futures are pointing to a rise of 39 points.
Shares in the Asia-Pacific have risen as investors look ahead to Fed Chair Jerome Powell’s speech at Jackson Hole later Stateside.
Best and worst performers
The best-performing sector is Consumer Staples, up 1.23 per cent. The worst-performing sector is Communication Services, down 0.14 per cent.
The best-performing stock in the S&P/ASX 200 is Bega Cheese (ASX:BGA), trading 11.50 per cent higher at $4.17. It is followed by shares in Viva Energy Group (ASX:VEA) and Qantas Airways (ASX:QAN).
The worst-performing stock in the S&P/ASX 200 is City Chic Collective (ASX:CCX), trading 11.84 per cent lower at $1.75. It is followed by shares in GUD Holdings (ASX:GUD) and De Grey Mining (ASX:DEG).
Asian markets
Japan’s Nikkei 225 has gained 0.81 per cent while the Topix has added 0.45 per cent.
The Kospi in South Korea has advanced 0.53 per cent and the Kosdaq has risen 0.49 per cent.
MSCI’s broadest index of Asia-Pacific shares outside Japan is 0.13 per cent higher.
RBNZ Governor Orr indicates central bank may soon slow pace of tightening
Speaking to Bloomberg TV, RBNZ Governor Orr said the central bank is in a more comfortable position, with official cash at 3.00 per cent. Orr flagged at least another couple of rate hikes before the RBNZ becomes more data-driven and has room to wait before deciding on further policy adjustments. Orr noted emerging signs rate hikes are cooling demand, pointing to surprise contraction in Q2 retail sales. He stressed that RBNZ wants to see further slowdown in consumption, but also downplayed the likelihood of New Zealand falling into recession. Markets are pricing in more tightening after the RBNZ in August signalled a more aggressive tightening path, with inflation pressures stronger than it assumed in May.
Japan inflation pressures continue building
Tokyo core CPI has risen 2.6 per cent y/y in August, compared to the consensus 2.5 per cent. This follows 2.3 per cent in the previous month. The latest reading marks the highest since October 2014, though FY14 prints were lifted by a consumption rate hike in April that year. Prior to that, Tokyo has not seen core inflation this high since mid-1992. Ex-fresh food and energy measures also picked up to 1.4 per cent vs consensus and prior month’s 1.2 per cent. Core CPI extended sequential gains to a tenth straight month. Year-ago energy contributions edged higher, driven mainly by higher electricity and gas prices. Elsewhere, narrowing declines in mobile phone fees supported underlying prices, while non-fresh food and accommodation picked up. The press has been highlighting how inflation is tracking above the BOJ’s 2 per cent target (now poised for a fifth straight month), though latest BOJ rhetoric reinforced the belief that momentum will slow next year.
China’s distressed asset funds struggle to profit from property sector
FT has discussed how China’s distressed asset managers in the private sector are struggling to profit from the slowing economy, with no bottom in sight for its collapsing property sector and lenders reluctant to write off bad loans. Almost a dozen investment funds told FT they had not increased their exposure to residential and commercial properties, usually the most popular form of collateral in Chinese debt restructurings, despite soaring defaults in the real estate sector. Commentators cited the ongoing decline in housing sales, combined with the absence of market mechanisms. Problems are compounded by the slow pace of bad loan write-offs despite rising defaults. Regulators have relaxed the bad debt ratio requirements for lenders so they can support the economy.
Company news
Etherstack (ASX:ESK) has announced that its UK subsidiary, Etherstack Wireless, has entered into a contract with Nokia Solutions and Networks Australia to supply professional services and a pilot licence for the deployment of Etherstack’s MCX LMR-IWF interworking function product. The contract revenue of approximately $755,000 is expected to be recognised this financial year. Etherstack CEO David Deacon said, “It is obvious that Etherstack has first mover advantage in the provision of 3GPP standards based LMR-IWF technology in key markets around the globe. We will keep pushing hard in the near term to cement our position as the leading supplier of this technology as public safety agencies transition from traditional digital radio networks to MCX-based solutions over 4G and 5G networks.” Shares are trading 5.68 per cent higher at 46.5 cents.
TerraCom (ASX:TER) will pay a final dividend of 10 cents per share for the financial year ended 30 June 2022. The company also advised shareholders that it has updated its dividend policy to endeavour to return 60 per cent to 90 per cent of net profit after tax to shareholders, paid on a quarterly basis. The company also noted that future dividends will be franked. Commenting on the update, Non-Executive Chairman Graeme Campbell said: “On behalf of the Board and Management, I am extremely pleased with the ongoing consistent performance of the Company which has enabled this dividend to be declared and an update to our distribution policy. We have a strong forward outlook on the coal market and look forward to providing income and capital to our shareholders on a regular basis.” Shares are trading 9.69 per cent higher at $1.075.
Next Science (ASX:NXS) has announced that Health Canada has given licensing approval for XPERIENCE, Next Science’s advanced irrigation product, to be sold in Canada effective immediately. Managing Director Judith Mitchell commented, “We are thrilled to see this licence come through and can now move to both commercial and clinical research activity in Canada.” Shares are trading 3.91 per cent higher at 93 cents.
Commodities and the dollar
Gold is trading at US$1753.97 an ounce.
Iron ore is 0.2 per cent lower at US$102.25 a tonne.
Iron ore futures are pointing to a rise of 1.47 per cent.
One Australian dollar is buying 69.59 US cents.
