by Peter Milios
All sectors are making gains today besides Information Technology, as the S&P/ASX 200 is 0.83 per cent or 59.80 points higher at 7241.10 at noon.
Qantas (ASX:QAN) has today said that it expects a before-tax profit of around $1.35-1.45 billion for the first half of 2023 financial year, as travel demand continues to soar. Shares are trading 4.6 per cent higher at noon.
Coal stocks have continued to lift, with Whitehaven (ASX:WHC), Yancoal (ASX:YAL) and New Cope (ASX:NHC) all making gains at lunch.
The SPI futures are pointing to a rise of 63 points.
Best and worst performers
The best-performing sector is Energy, up 1.87 per cent. The worst-performing sector is Information Technology, down 0.71 per cent.
The best-performing stock in the S&P/ASX 200 is Chalice Mining (ASX:CHN), trading 6.67 per cent higher at $4.96. It is followed by shares in Whitehaven Coal (ASX:WHC) and Brainchip (ASX:BRN).
The worst-performing stock in the S&P/ASX 200 is The Star Ent Group (ASX:SGR), trading 7.81 per cent lower at $2.66. It is followed by shares in Smartgroup Corporation (ASX:SIQ) and WiseTech Global (ASX:WTC).
Asian News
Shares in the Asia-Pacific mostly rose Wednesday after U.S. stocks rose overnight. New Zealand’s central bank delivered a 75 basis point hike, matching expectations in a Reuters poll, and the biggest rate hike ever in the central bank’s history.
In South Korea, the Kospi is up 0.56 per cent, while the Kosdaq has climber 1.12 per cent in early trading.
Japanese markets are closed for a public holiday.
RBA Governor Lowe sees policy challenges from structurally higher inflation:
In a speech late Tuesday, RBA Governor Lowe reiterated more rate hikes expected with household spending, wage and price setting behaviour and global economy to determine policy. Did not rule out further 50 rate hikes but also open to keeping policy unchanged. Lowe reasoned inflation is expected to fall over coming years as supply disruptions ease, commodity prices stabilise and higher rates lower aggregate demand. Contrasted situation in Australia where wage growth is consistent with inflation returning to target, to other countries experiencing faster wage growth. Highlighted longer term dynamics likely to affect global inflation, including from deglobalization, ageing demographics, climate change and energy transition. These factors are expected to increase the prevalence of supply shocks, making inflation and the policy environment more difficult for central banks.
OECD projects softer 2024 GDP growth in China, Japan:
The OECD economic outlook report showed tweaks to global GDP forecasts, now at 3.1 per cent in 2022 (vs prior 3.0 per cent) and 2.2 per cent in 2023 . New projections are looking for 2.7 per cent in 2024. While the US and EU are expected to recover moderately in 2024 from a near-stall in 2023 growth, momentum in China and Japan seen waning, though following a lesser slowdown. Still, China’s GDP growth is expected at 4.1 per cent in 2024, following 4.6 per cent in 2023 and 3.3 per cent in 2022. Noted, activity is disrupted by recurring lockdowns. With weaker housing investment also remaining a significant headwind, growth in 2023 and 2024 will be sustained by infrastructure investment and other measures to mitigate the correction in the real estate sector. Japan is hindered by higher energy prices and slower global growth, while fiscal policy is set to tighten in 2024. South Korea also saw slowing due to weak external demand, modest disposable income growth and soft housing market. Regional inflation picture mixed, ranging from elevated pressures in South Korea, while China remains benign.
Shanghai restricts entry into the city amid worsening Covid outbreaks in other regions:
China’s daily Covid infections nearing April peak with several cities tightening restrictions and some areas reimposing or extending lockdowns. Shanghai moved to restrict entry into the city, requiring new arrivals to avoid restaurants, shopping malls and entertainment for five days from Thursday (Bloomberg). Arrivals will also be subject to additional testing requirements. Elsewhere, Beijing is battling record high infections with residents urged to stay at home and present negative tests before entering public buildings. Falling mobility across economically-important regions expected to suppress economic growth before any potential reopening in 2023. Even then, reopening is expected to be gradual and nonlinear, reflecting policymaker reluctance to relax curbs too quickly given inadequate medical resources to deal with expected spike in hospitalizations, as well as low vaccination rates among elderly.
China leading global IPOs this year:
Reuters reported China is leading global IPO activity this year, supported by easy monetary policy and lack of clarity on access to offshore capital markets. Refinitiv data showed China IPOs raised $71.2B. While lower than $98.5B a year earlier, the amount is much higher than US ($17.3B) and Europe ($16.4B). Also noted relative stability in China markets, in contrast to the volatility elsewhere. Chinese equity funds have seen inflows of $21.3B since April while global equity funds logged outflows of $144B. Chinese offerings have been largely confined to the domestic market as deals in western markets tumbled, attributed to concerns over China’s Covid lockdowns, growth worries, ongoing audit disputes with the US, and uncertainties over offshore listing rules. Going forward, UBS noted Hong Kong primed for resurgence given a strong IPO pipeline, while US listings will take more time amid uncertainty over US-China relations.
Company News
Alligator Energy Limited (ASX:AGE) has announced that the additional resource drilling program has been completed at the Blackbush Deposit, Samphire Uranium Project, in South Australia. Drilling in the western channel extension has found some of the highest uranium grades recorded to date at the project. In response, Alligator’s CEO Greg Hall stated: “The mineralisation continuity and exceptional grades found around Blackbush West have been exciting to see and have continued to buoy our positive view of this Project.” Shares are trading 4.55 per cent higher at $0.046 at noon.
Netlinkz Limited (ASX:NET) announces that it has entered into an agreement with SpaceX for Netlinkz to be a non-exclusive global reseller of the Starlink satellite based high-speed, low-latency broadband internet. With the satellites positioned in low-Earth orbit, Starlink achieves significantly higher transmission speeds for its end users. Netlinkz CEO, James Tsiolis, commented: “The SpaceX Starlink distribution agreement enables Netlinkz to implement its sales strategy faster with a significantly larger footprint. Shares are trading 9.38 per cent higher at $0.035 at noon.
Chalice Mining Limited (ASX:CHN) provided an update on exploration activities at its Nickel-Copper-Platinum Project, located in Western Australia. The company has announced outstanding wide high-grade intersections, with the drilling demonstrating potential for material resource growth. Shares are trading 6.24 per cent higher at $4.94 at noon.
RareX Limited (ASX:REE) has provided an update on ongoing development and stakeholder engagement activities at its Cummins Range Rare Earth and Phosphate Project, located in the Kimberley region of Western Australia. The Company’s 2022 drilling program has concluded safely, laying the foundation for a major Mineral Resource upgrade targeted for Q1 2023. RareX Managing Director, Jeremy Robinson, said: “We are making material progress with the development and evolution of the Project on multiple fronts. Cummins Range is advancing rapidly towards the development phase and 2023 should see numerous key milestones achieved.” Shares are trading 4.26 per cent higher at $0.049 at noon.
Breaker Resources NL (ASX:BRB; the Company or Breaker) is pleased to advise of the results from the next 10 holes or wedges drilled as part of its resource development infill program on the primary Northern Flat Lodes beneath the Bombora Prospect at its Lake Roe Gold Project. Pleasingly, every hole/wedge in this latest batch has returned high-grade gold intercepts which validate the interpretation and further enhances the continuity within the ore system. Breaker’s acting CEO, Peter Cook said “These flat lodes keep expressing themselves as game changers, with the potential to significantly increase the overall grade at Bombora and to become an important part of any future underground development at Lake Roe gold operations.” Shares are trading 2.24 per cent lower at $0.305 at noon.
ABx Group (ASX:ABX) has announced the delivery of a maiden JORC compliant Mineral Resource Estimate for the Deep Leads – Rubble Mound channel area, the first estimate from within ABx’s rare earth elements (REE) project in northern Tasmania. The resource estimate anticipated to grow significantly as drilling proceeds. This maiden resource estimate covers less than 10 per cent of the 31.3km2 REE extension area yet to be drilled. Commenting on the mineral resource estimate, ABx Group Managing Director and CEO, Dr Mark Cooksey said, “It is a widespread province of clay-hosted REE mineralisation which has some exciting thick high grade REE channels that ABx intends to drill-out in January-March 2023, and I look forward to updating investors as we progress this campaign.” Shares are trading 7.14 per cent higher at $0.15 at noon.
Commodities and the dollar
Gold is trading at US$1741.98 an ounce.
Iron ore is 2.1 per cent lower at US$94.20 a tonne.
Iron ore futures are pointing to a fall of 1.9 per cent.
One Australian dollar is buying 66.51 US cents.
