ASX 200 rises; JB Hi-Fi profit beats forecasts; Aurizon flags $150m buyback; Beach Energy slumps to loss

RBA's Hauser warns on 'overconfidence' on rate forecasts. JB Hi-Fi buying e&s, reports lower profit but beats forecasts. Aurizon flags $150m buyback, strong FY25 after missing consensus estimates. Beach Energy slumps to loss.

Retailer JB Hi-Fi results a test of consumer resilience in tough economic times. Picture - Chris Pavlich

Welcome to the Trading Day blog for Monday, August 12. The ASX 200 index closed 0.5 per cent higher to 7813.70points on tech and consumer gains. 

The Aussie dollar is trading around US65.84c at 5.05pm AEST. 

Updates

4:53 pm August 12, 2024

ASX 200 ends up 0.5pc at one-week high

David Rogers

Australia's stock market continued to track a rebound in global markets after US data last week calmed recession fears and the BoJ pivoted away from rate hikes.

The S&P/ASX 200 index closed up 0.5 per cent at a one-week high of 7811.11 after hitting an intraday high of 7836.8, near a 38.2 per cent Fibonacci retracement of its recent 5.8 per cent drop from a record high of 8148.7 points.

Nine of 11 sectors rose with only materials and energy in the red.

Tech, discretionary, communications and financials were the main outperformers with NextDC up 3.4 per cent, JB Hi-Fi up 8.3 per cent on a strong interim profit, dividend and trading update, CAR Group up 4.5 per cent and Seek up 1.5 per cent after reporting, and NAB leading a 0.6-1 per cent rise in the major banks.

BHP fell 0.5 per cent and Rio Tinto lost 1.4 per cent as iron ore wavered.

Aurizon dived 8.8 per cent and Beach dived 13 per cent after reporting.

2:23 pm August 12, 2024

Guzman y Gomez close to ASX 200 inclusion?

David Rogers

Two months after its ASX-listing Guzman y Gomez is a possible candidate for inclusion in the S&P/ASX 300 index next month, according to Morgan Stanley.

"Not only could they make their way into the ASX 300 and subsequently added to the Small Ordinaries, they are well positioned to be considered for the ASX 200 along with Westgold Resources," says Morgans Stanley Australia equity strategist, Chris Nicol.

Assuming GYG satisfies liquidity requirements, GYG's six-month average float-adjusted market capitalisation of $1.32bn puts in "within striking distance" to be considered as a potential inclusion candidate for the 200 at this review.

Other notable potential S&P index additions include Yancoal for the 200, 300 and Small Ordinaries, Clarity Pharma for the 200, 300 and Small Ordinaries, Westgold Resources for the ASX 200 and Droneshield for the ASX 300 and Small Ordinaries.

The next quarterly S&P/ASX Index review is due to be announced close of trading September 6th.

Any changes will be effective after the close of trading on September 20th.

1:30 pm August 12, 2024

O'Neil sorry for 'incorrect' Treasury claim

Sarah Ison

Newly appointed Housing Minister Clare O'Neil has apologised for claiming Treasury had done modelling to show the government's build to rent scheme will result in an additional 160,000 rental units over a decade, when the department had done no such work.

The Greens and Coalition leapt to criticise Ms O'Neil over comments on Monday morning where she said "Treasury modeling" showed the program would deliver 160,000 new rental units, with Greens housing spokesman Max Chandler-Mather declaring Treasury officials had told senators the opposite in an inquiry last week.

Mr Chandler-Mather said it was clear Ms O'Neil had "misled the public". "The Minister must immediately admit that there is no modelling to suggest that Labor's disastrous build to rent bill will see new homes built," he said.

Ms O'Neil admitted on Monday afternoon she had made a mistake – which came just three weeks after taking on the new role. The Australian understands the incorrectly sourced the data came from the Property Council, not Treasury.

"I did source the modelling incorrectly," she said. "My apologies."

The issue is due to be raised in question time in the lower house at 2pm.

1:22 pm August 12, 2024

Senate inquiry likely into CFMEU legislation

Jack Quail

Government legislation designed to force the CFMEU into administration is set to face a Senate inquiry after the Greens signalled the bill warranted further examination.

Tabled on Monday, the Labor legislation would grant sweeping powers to an administrator tasked with cleaning up the recalcitrant union currently dogged by allegations of widespread criminal conduct, including links to organised crime gangs.

But the Greens signalled that it wanted additional time to consider the legislation, which it had only received on Sunday. “We've seen previously where the government tried to ram legislation through without due process in migration laws and then that ended up with a disaster,” Greens Senator David Shoebridge said.

“We're going to review the legislation, undertake proper consultation and then come to our position on it, we’re not going to be railroaded by the government's timetable, especially given the disaster of last time [the government] tried to do it with migration.”

1:15 pm August 12, 2024

Bowen Coal chair slams overthrow bid

Valerina Changarathil

Queensland micro-cap miner Bowen Coking Coal's executive chairman Nick Jorss has slammed the "unnecessary and unfortunate distraction" created by shareholder Iolite's push to overthrow him and another director.

In a statement to investors on Monday, Mr Jorss said Iolite is seeking a shareholder meeting to remove him and non-executive director Neville Sneddon from the board. The notice also seeks the installation of Iolite founder and managing director Robert Leitz on the Bowen board. Iolite purports to hold a 5 per cent stake in Bowen.

"This is an unnecessary and unfortunate distraction just as the Burton mine has achieved operational steady state, we are hitting production records from Burton and the team is motivated and working hard to rebuild shareholder value," Mr Jorss said. "The board and senior management have been in regular dialogue with the shareholder, and he has
been clearly advised by the board that this approach is unhelpful and that that the matters raised are best dealt with at the upcoming AGM."

He told shareholders Bowen has "weathered a number of storms in recent times and the board and management stand united and positive about its operational status and future".

1:04 pm August 12, 2024 Highlight

RBA's Hauser warns on 'overconfidence' on rates

David Rogers

Reserve Bank deputy governor Andrew Hauser has warned against "overconfidence" on interest rates that could cause “poor analysis and decision-making that could harm the welfare of all Australians".

In a speech to the Economic Society of Australia in Brisbane on Monday, Mr Hauser has labelled anyone claiming that interest rate prescriptions are “obvious” as “false prophets”.

“Of course, eye-catching language sells newspapers, secures clients and draws crowds to the soapbox” he said. “But when the stakes are so high, claiming supreme confidence or certainty over what is an intrinsically uncertain and ambiguous outlook is a dangerous game.

“At best, it needlessly weaponises an important but difficult process of discovery. At worst, it risks driving poor analysis and decision-making that could harm the welfare of all Australians.”

1:03 pm August 12, 2024

Put these quality stocks on your shopping list

David Rogers

Good businesses tend to be expensive but with the current market wobbles there may be opportunities to pick up quality stocks at a reasonable price, according to Equity Trustees.

"When we say quality this means they have above average return on capital, above average growth prospects, strong balance sheets, are the number one or two player in their market, good management, and strong governance," says Equity Trustees Head of Equities, Chris Haynes.

His "shopping list" of quality ASX-listed companies that have theses attractive fundamentals includes BHP, Brambles, CAR Group, Cochlear, CSL, Fisher & Paykel Healthcare, Goodman Group, Hub24, James Hardie, Lovisa, Megaport, Netwealth, Pro Medicus, Qube, REA Group, TechnologyOne, Webjet, WiseTech and Xero.

12:41 pm August 12, 2024

Master Builders back CFMEU legal push

Jack Quail

Peaking construction industry body Master Builders Australia has backed Labor’s legislative push to force elements of the embattled CFMEU into administration.

The legislation, tabled by Employment and Workplace Relations Minister Murray Watt on Monday, would grant sweeping powers to an administrator tasked with cleaning up widespread allegations of criminal conduct within the union’s senior ranks.

In a statement issued on Monday, Master Builders boss Denita Wawn urged all parties to support the legislation to help “stamp out” any unlawful behaviour.

“Calls for yet another review or inquiry, while well intentioned, will not help government, law enforcement and regulators get on with the job, because we already know what the problems are, how they arise, and how to fix them,” Ms Wawn said.

After the legislation was tabled, Opposition employment spokeswoman Michaelia Cash confirmed the Coalition planned to refer the bill to committee for an inquiry and flagged “serious amendments” would be needed.

12:26 pm August 12, 2024

ASX 200 up 0.5pc; most sectors up

David Rogers

Australia's share market remains in on track for its highest daily close in a week.

The S&P/ASX 200 index is up 0.5 per cent at 7814.4 after hitting rising to 7836.8.

Nine of 11 sectors are higher as global risk assets continue to recover from the US recession fear and yen carry unwind that triggered sharp falls last Monday.

Tech, consumer discretionary, financials, communications, utilities and health care lead with Xero up 1.6 per cent, JB Hi-Fi up 8.5 per cent after hitting a record high a stronger than expected interim profit, dividend and trading update, and NAB leading a 0.6-1.3 per cent rise in the major banks.

Iron ore miners fall with Rio Tinto leading a 0.7-1.4 per cent fall in the majors as Singapore iron ore futures fall about 2 per cent to $US99.75, near four month lows.

12:08 pm August 12, 2024

US, UK can pull out of AUKUS with year's notice

Ben Packham

The US or the UK could pull out of the AUKUS submarine deal with just a year’s notice if either nation decides the pact weakens their own nuclear submarine programs, new documents reveal.

An updated AUKUS agreement and a political “understanding” between the countries, tabled in parliament on Monday, establish a 50-year legal framework for the transfer of nuclear materials and equipment to Australia.

The understanding says the US and UK “should not unreasonably withhold” nuclear information or equipment from Australia.

But it includes an escape clause for either country if they decide the AUKUS deal adversely affects their ability to “meet their respective military requirements and to not degrade their respective naval nuclear propulsion programs”.

The new agreement and additional “political commitments” were revealed by Joe Biden last Thursday in a letter to the US Congress, but their contents were only disclosed on Monday morning when they were tabled.

PM Anthony Albanese said on Friday “there aren't extra political commitments”, declaring AUKUS was underpinned by the US Alliance.