ASX 200 dips; Flight Centre, Telix, Perpetual down; Pilbara's record quarter; Wagners jumps

Flight Centre trims guidance. Treasurer announces "faster, stronger" draft merger reform legislation. Perpetual hit by $9bn outflows. Telix slumps on bonds, regulatory updates. ASIC concerned over private market pump-up.

Investor sentiment is mixed as earnings updates from overseas and local production updates roll in. Picture: Gaye Gerard

Welcome to the Trading Day blog for Wednesday, July 24. The ASX 200 index closed 0.1 per cent lower to 7963.70 points, with energy and property stocks the worst performers.

The Aussie dollar is trading around US65.97c at 5.10pm AEST.

Updates

4:58 pm July 24, 2024

ASX 200 ends flat amid US tech falls

David Rogers

Australia's share market ends flat despite sharp falls in US stock index futures.

The S&P/ASX 200 index ends down 0.1 per cent at 7963.7 after dipping to 7944.3.

Eight of 11 sectors fall with property, energy, consumer staples and utilities underperforming, while financials and materials rise.

Goodman dives 2.1 per cent, Woodside loses 1.1 per cent and Woolworths falls 0.8 per cent. Telix Pharma dives 7.2 per cent But Westpac jumps 0.7 per cent and Rio Tinto gains 0.5 per cent and Evolution jumps 4 per cent.

It comes as tech giants including Telsa, Alphabet, Nvidia amd Meta dive in afterhours trading after reports from Tesla, Alphabet and Visa.

S&P 500 futures fall 0.6 per cent with Nasdaq 100 futures down 0.9 per cent as Tesla fell about 8 per cent, Alphabet falls 2.2 per cent, Nvidia loses 1.5 per cent and Meta fall 1.5 per cent. Visa falls 3.2 per cent after reporting.

If Mag 7 falls moderately in on Wednesday, money keep flowing to other parts of the market like small caps and Australian shares as it has done in the "rotation" seen after lower than expected inflation data fuelled US interest rate bets recently.

But if Mag 7 falls very sharply and doesn't rebound quickly, investors may be forced to sell investments elsewhere to cover leveraged bets on Mag 7.

4:26 pm July 24, 2024

HSBC Aus bans payments to crypto

David Ross

HSBC Australia has banned all payments from bank accounts and credit cards to cryptocurrency exchanges.

The bank told customers on Wednesday it would block all payments "for your protection", warning prospective cryptocurrency investors would now need to "make alternative arrangements".

However, HSBC said it would still accept payments from cryptocurrency platforms to customer accounts.

HSBC said it was making the move in response to a "recent rise in fraud and scams".

The bank joins a throng of lenders which have delayed or banned payments to cryptocurrency platforms.

4:14 pm July 24, 2024

ACCC welcomes 'important' merger reforms

Joseph Carbone

The ACCC says it welcomes the beginning of consultation on the federal Labor government's draft merger reform legislation, a move which Treasurer Jim Chalmers says will grant the regulator stronger powers.

ACCC chair Gina Cass-Gottlieb said: "The reforms are important to achieve a simplified merger control framework that prevents harmful anti-competitive transactions and benefits Australian consumers and businesses of all sizes.

"The new merger regime needs to strike the right balance between ensuring that potentially anti-competitive mergers are scrutinised and where necessary prevented, while minimising regulatory burden for acquisitions that do not have anti-competitive effects.

"The new merger regime must address the deficiencies of current merger laws in allowing too many mergers to escape the competition regulator’s scrutiny."

2:28 pm July 24, 2024 Highlight

Government releases draft merger reforms

Joseph Carbone

Treasurer Jim Chalmers announces the federal Labor government has released draft merger reform legislation.

In a statement, the Treasurer says the government's legislation will make the merger approval system "faster, stronger, simpler, more targeted and more transparent".

Subject to passing through Parliament, the new system will commence in 2026 and aims to "speed up the process for mergers that are in the national interest and give the regulator stronger powers to identify and scrutinise transactions that pose a risk to competition, consumers and the economy".

In the statement, the Treasurer says the changes will give the regulator "stronger powers" and would "make it easier for the majority of mergers to be approved quickly, so the ACCC can focus on the minority that give rise to competition concerns … the draft legislation delivers the necessary reforms that will enable the ACCC to better identify growing market power and protect Australian consumers from anti-competitive mergers."

Andrea Gomes da Silva has been appointed as an independent advisor. Ms Gomes da Silva led the United Kingdom Competition and Markets Authority after the UK exited the European Union.

2:03 pm July 24, 2024

Winery workers go on strike

Joseph Carbone

Winery workers in South Australia have gone on strike for better working conditions, the United Workers Union announces.

The more than 120 workers from Jacob's Creek and St Hugo — both owned by Pernod Ricard — have stopped work for four hours.

The UWU says Pernod Ricard is using the sale of its Aussie businesses to Accolade Wines to "force a short-term low-wage deal on workers who are in the midst of enterprise bargaining".

UWU national secretary Tim Kennedy said: "Profits have been driven by rising prices, yet winery workers haven’t been given a comparable pay rise. Whilst the CEO at Pernod Ricard sits on an eye-watering salary, workers are struggling to pay their bills.

"These winery jobs sustain our regional communities. For every dollar that is earned, it goes right back into the local community. Our whole union is behind the workers at Pernod Ricard, they’re on strike together today, but they’re part of a movement of workers that are saying enough is enough."

1:50 pm July 24, 2024 Highlight

Another backer for Crescent's Pacific Smiles bid

Valerina Changarathil

Dental group Pacific Smiles' preferred bidder NDC Bidco – a subsidiary of private equity group Crescent Capital – has another major shareholder on its side after rejected suitor Genesis Capital refused to back the deal.

Pacific Smiles on Wednesday afternoon announced MA Financial Group, its 13.43 per cent stakeholder, intends to vote in favour of the NDC's $1.91 per share offer.

On July 22, Pacific's 10 per cent stakeholder HBF Health also gave the green light to the NDC deal.
Genesis Capital, which has a 19.9 per cent stake in Pacific, does not intend to vote in favour of the deal backed by Pacific's board.

The scheme meeting is scheduled to be held on August 1. For NDC's bid to succeed, it needs 75 per cent of votes in favour of the deal and 50 per cent of the number of shareholders voting.

1:22 pm July 24, 2024 Highlight

Telix slumps on bonds, regulatory updates

Valerina Changarathil

Biotech group Telix's share price is down more than 6 per cent to $19.05 in afternoon trading in response to updates about its latest bonds issue and regulatory approvals.

Telix has successfully priced $650m via convertible notes that are due to mature in 2029 after receiving strong support from eligible investors globally. The initial conversion price of the bonds is $24.78 per share, which represents a conversion premium of 32.5 per cent over the reference share price of $18.70 each, subject to anti-dilution adjustments.

The net proceeds, after transaction costs, are intended to provide funding to bring forward proposed investment in order to accelerate key clinical development programs, including further studies to expand the market opportunity across its diagnostic imaging agents and its "pivotal" trials for kidney and brain cancer therapy programs.

Separately, Telix also said the US Food and Drug Administration has accepted a new drug application filing for TLX007-CDx, a new and proprietary cold kit for the preparation of PSMA-PET imaging for prostate cancer.

12:27 pm July 24, 2024

ASX 200 recovers; consumer discretionary leads

David Rogers

Australia's share market recovers from early dip caused by a sharp fall in US stock index futures after reports from Tesla, Alphabet and Visa.

The S&P/ASX 200 index is flat at 7967 after dipping to 7944.3.

Consumer discretionary leads again with Wesfarmers up 0.7 per cent and JB Hi-Fi up 2.8 per cent, both hitting record highs for a second day running, though Flight Centre falls 4.3 per cent after revised earnings guidance fails to impress.

Energy, property and staples drag with Woodside down 1.1 per cent after its US acquisition and production report this week, Goodman down 0.7 per cent as Wilsons trimmed its model portfolio exposure and Woolworths down 0.8 per cent as Macquarie downgraded. Telix Pharma dives 5.2 per cent after issuing $650m in convertible bonds which convert at a 32.5 per cent premium to to reference share price.

The intraday rebound in Australian shares despite the prospect of a US fall.

S&P 500 futures fall 0.4 per cent with Nasdaq 100 futures down 0.6 per cent as Tesla falls 8 per cent, Alphabet falls 2 per cent, Visa falls 3 per cent, and Nvidia and Meta both fall 1.5 per cent after reports from Tesla, Alphabet and Visa.

11:49 am July 24, 2024

ASIC concerned over private market pump up

David Ross

ASIC chairman Joe Longo has flagged concerns around conflicts of interest and overly bullish valuations in private markets.

At a business summit in Sydney on Wednesday, Mr Longo said he was open to a “mature” discussion over how the regulator could make things easier for business. But he called on Australia’s big bankers to show “humility” and avoid “complacency” in their dealings with the market and regulators.

Mr Longo said he wanted “actionable ideas” noting ASIC wanted to hear about “particular issues or concerns” around regulatory settings “that are causing unnecessary friction in the system”. But he was concerned about conduct in private capital markets noting “it’s less transparent”.

This comes as ASIC flagged plans to scrutinise trading in private markets and financial products amid an inquiry into the cleanliness of Australia’s public markets. Mr Longo said ASIC was concerned about protecting investors. “The issue we’ve got is conflict of interest and valuations,” he said. “The stakes are very high.”

11:45 am July 24, 2024

RBA rate hike, delayed cuts 'a policy mistake'

Valerina Changarathil

Investment firm State Street Global Advisors has outlined three reasons it thinks a rate hike by the RBA or a prolonged delay to cuts may be a "policy mistake".

In a note on Wednesday, State Street's APAC economist Krishna Bhimavarapu says these include the state of play in the labour market, inflation deceleration evidenced in the NAB business Survey and the TD-MI inflation gauge and the weak growth and consumption.

GDP growth in the Match quarter was the weakest in 32 years in Australia (ex-Covid). Furthermore, consumption continues to remain weak, as tracked by the NAB Business Survey's weak forward orders.

Recent economic data releases "have presented upside risks n Australia with a potential for an annual reacceleration in inflation in Q2". But State Street believes the labour market is cooling fast and inflation could actually decline to the central bank's target this year, "sooner than they forecast".

"A rate hike will be a policy mistake, as the economy is at a tipping point, where the unemployment rate could rise beyond their comfort level… Either way, with already feeble growth, the RBA will do well to exercise caution on their policy and proactively guide markets on their outlook."