ASX 200 lowers; BHP underlying profit, Coles earnings beat estimates; JLG's revenue miss; Woodside profit down

BHP cuts dividend after profit fall. Coles earnings beat estimates. Woodside to walk 'growth funding tightrope'. Guzman Y Gomez gains after profit beat. Johns Lyng dives on revenue miss. Lovisa trading update disappoints. CBA chief economist steps down.

BHP results and commentary are in focus alongside other earnings updates.

Welcome to the Trading Day blog for Tuesday, August 27. The ASX 200 index closed 0.2 per cent lower to 8071.20 points. US indexes closed mixed, led by tech losses.

The Aussie dollar is near US67.80c at 5pm AEST.

Updates

4:40 pm August 27, 2024

ASX 200 ends down 0.2pc as banks slip

David Rogers

Australia's stock market fell slightly in line with a similar move in the US market as Nvidia lost ground before it reports early Thursday Australian time.

Results volatility dominated with some big moves in reporting companies.

The S&P/ASX 200 index closed down 0.2 per cent at 8071.2 points.

It hit a near four-week high of 8107.3 as BHP, Woodside and Coles rose after reporting, and iron ore miners and energy producers rose on high commodity prices.

BHP closed up 1.3 per cent after rising 3 per cent, Woodside closed up 3.9 per cent after rising 5.5 per cent and Coles closed up 1.7 after rising 3 per cent intraday.

The index dipped to 8062.4 as banks and the financials sector fell along with the tech, industrials, communications, consumer discretionary and health care sectors.

Major banks closed down 0.2-1 per cent led by NAB. QBE lost 1.5 per cent.

Nanosonics soared 23 per cent and Worley rose 2.8 per cent after reporting, but Johns Lyng dived 27 per cent, Lovisa dropped 13 per cent and Zip fell 7.9 per cent.

4:09 pm August 27, 2024

Business council lashes student cap call

Joseph Carbone

The Business Council of Australia has hit out at the federal government's decision to put a cap on the number of international students allowed at Australian universities.

Under the new rules, the number of new international enrolments will be limited to 270,000 in 2025.

BCA chief executive Bran Black said: "These caps will damage the economy, reduce economic growth and create long lasting negative impacts to our fourth largest export.

"I’m disappointed the Government is intent upon implementing such a blunt mechanism that will dent our capacity to drive research and result in course cancellations for domestic students.

"The debate around student caps has been a knee jerk reaction to a housing crisis that has come about from poor planning and a lack of coordination across all levels of government," Mr Black said.

3:02 pm August 27, 2024

Chalmers 'fighting everything but inflation': Taylor

Noah Yim

Opposition Treasury spokesman Angus Taylor says Jim Chalmers is "fighting everything and everybody except his home-grown inflation".

"He is fighting his own mentor — who he wrote his PhD thesis about, Paul Keating — over superannuation taxes which are completely unacceptable by focusing on taxing unrealised capital gains and an unindexed system, which means younger Australians are going to pay more tax as they get older," Mr Taylor said.

"He’s fighting Peter Dutton today. He’s playing the man and not the ball. And of course when someone starts playing the man and not the ball it tells you that they’ve got it wrong and that’s all they’ve got left to focus on.

"He’s fighting the Reserve Bank, he’s fighting the Productivity Commission, and he’s fighting the laws of economics in this country, because he thinks that the way to beat inflation is to throw more money at it and that has never been true and never will be true.

"We know what the answer is to beat inflation – you’ve got to get back to basics. That does mean that you’ve got to manage the growth in government spending and that’s why we’ve opposed over $92bn of spending in our voting in the parliament."

2:35 pm August 27, 2024

CBA chief economist stepping down

Cliona O'Dowd

Commonwealth Bank’s Stephen Halmarick is stepping down after serving four years as chief economist at Australia’s biggest bank.

Mr Halmarick will head up the economics team until late January and will then seek out new opportunities.

"I'm at the stage of my life and career where I'm looking for new challenges and opportunities. I've been at CBA for 16 years and so I just thought it was a good time to look forward to the next chapter," Mr Halmarick told The Australian.

CBA will now begin the process of finding a replacement for Mr Halmarick, who was promoted to chief economist in April 2020, just as the Covid pandemic was kicking off. Prior to that he led CBA’s Global Economic & Markets Research team and was chief economist for Colonial First State.

2:17 pm August 27, 2024

TPG inks deal with US satellite company

Jared Lynch

TPG Telecom has signed a partnership with US satellite company Lynk Global to provide "near-100 per cent mobile coverage" across Australia, "eliminating dead zones".

The nation’s third biggest telco said the non-exclusive agreement will connect standard mobile phones to Lynk’s constellation of low earth orbit satellites, closing coverage gaps in rural and remote parts of the country.

Optus is planning similar coverage under partnership with Elon Musk’s SpaceX. Telstra is also "exploring and testing" what is known as direct to handset satellite technology, announcing earlier this year it was working with Lynk, SpaceX subsidiary Starlink and others to take advantage of the "still evolving" technology.

TPG chief technology officer Giovanni Chiarelli said low earth orbit (LEO) satellites had the potential to "transform connectivity right across Australia".

"We are excited to collaborate with Lynk Global to deliver mobile connectivity in the hardest-to-reach places in Australia," he said.

1:53 pm August 27, 2024 Highlight

Woodside to walk 'growth funding tightrope'

Valerina Changarathil

Woodside's growth capex plans, estimated at $US5bn-$US5.5bn in 2024, coupled with it maintaining dividends at the top end of its policy range of 50-80 per cent of net profit will "cause a material decline in headroom," ratings agency S&P says.

"This exposes the company to risks stemming from falls in oil and gas prices or cost overruns at its growth projects."
Woodside Energy's ability to balance growth projects with financial policy objectives will be fundamental to rating stability over the next few years, S&P says.

"Woodside's financial capacity will diminish due to its recently announced plans to acquire OCI Clean Ammonia Holding in the Netherlands for $US2.35bn and US-based liquefied natural gas company Tellurian for $US900m. "However, it can absorb the immediate impact of an additional $US3.25bn in acquisitions over the next 12 months." But capex will remain elevated well into the decade.

Shares are up 4 per cent to $27.45 close to 2pm AEST.

1:34 pm August 27, 2024 Highlight

Zip in US BNPL integration talks with Apple

Buy now, pay later operator Zip is in talks with Apple about integrating its installment-payments product in the US, and expects to announce partnerships with more large US merchants in its current fiscal quarter, its CEO Cynthia Scott said.

Zip said it is looking for what it calls capital-light propositions as it targets improved earnings and operating margins over the next two years. Its performance already lifted over the 12 months through June, with a near 40 per cent increase in the value of US transactions powering a 46 per cent rise in revenue from the country.

Earlier this month, Zip announced that merchants using Stripe in the US would be able to offer Zip to customers. It is now looking for strategic partnerships with other payments providers. “We don’t have an integration with Apple at the moment in the U.S., but that’s something that we are in conversation with them about,” Ms Scott said.

Apple unveiled its own buy-now-pay-later service, called Apple Pay Later, in March 2023 but stopped offering new loans just over a year later. The company said at the time that it planned to offer installment options on its Apple Pay payment system via other providers.

Shares in Zip are down 7.5 per cent to $2.10 at 1.30pm AEST on the ASX.

– The Wall Street Journal

1:02 pm August 27, 2024

Lendlease, Warburg's first JV purchase

Valerina Changarathil

Property investment giant Lendlease and US partner Warburg Pincus have cut their first major asset deal for the joint venture established last month.

The JV platform together with its managed investment vehicle LINO have acquired a $S1.6bn portfolio of assets in Singapore from entities associated with Blackstone and Lim Chap Huat, executive chairman of Soilbuild Group Holdings.

"This represents one of the largest transactions of a private portfolio of industrial assets in Singapore," Warburg says on its website. The acquisition marks the first transaction for the JV platform, which focuses on life sciences and R&D real estate in Asia Pacific.

12:53 pm August 27, 2024

McPhillamys gold mine 'can go ahead': PM

Noah Yim

Prime Minister Anthony Albanese says he backs a $1bn mining project in NSW that was blocked by Environment Minister Tanya Plibersek due to Indigenous heritage concerns.

"The gold mine can go ahead,” the Prime Minister said on Tuesday morning. “What has happened is a decision based upon a tailings dam. [NSW Premier] Chris Minns would like it to go ahead. I'd like it to go ahead too. There's nothing to stop it. “There were other options that the company put forward on the tailings dam.”

ASX-listed miner Regis Resources told investors and the wider public on August 19 its McPhillamys gold project is "not viable" due to the Section 10 declaration by Ms Plibersek. "While a number of alternatives were considered early in the design process, the Project does not have any currently viable alternative infrastructure locations.," it has said.

12:48 pm August 27, 2024

Qld ex-CFMEU official flags legal challenge

Lydia Lynch

Queensland’s ousted CFMEU state secretary Michael Ravbar will launch a High Court challenge to Labor’s administration laws, as he urged protesters to vote out Anthony Albanese and Premier Steven Miles at upcoming elections.

Mr Ravbar, a former member of Labor’s national executive, said he would fight “to get your union back”. “We will never allow another takeover again,” he told a rally in Brisbane’s CBD.

“We will be doing a High Court challenge as a matter of urgency and I will be the applicant.”

Mr Ravbar, one of 21 Queensland union officials who were sacked last week, claimed Mr Albanese was coming after the CFMEU to distract from his own policy failures. “This guy has got no strength, no vision, he has got a glass jaw,” he said. “Why he is taking your union on us because across the country he has been failing to actually govern what he was elected to do."