ASX 200 rises; SkyCity, IDP issue outlook warnings; Magellan outflows; Rex chair steps down; Nvidia valued more than Apple

Tech sector leads gains as dismal updates from SkyCity, IDP weigh. Chinese businessman Wu Tao's attempt for a board seat at Northern Minerals fails.  Fortescue lobs 'misuse' claims against ex-staff. 

Weak economic growth figures has put rate cuts in focus across major developed economies. Picture: Nikki Short

Welcome to the Trading Day blog for Thursday, June 6. The ASX 200 index closed 0.7 per cent to 7821.80 points on tech gains. Overseas, the Nasdaq hit a record after Nvidia's $US3.01 trillion valuation surpassed Apple's.

The Aussie dollar is trading near US66.62c.

Updates

4:35 pm June 6, 2024

ASX 200 rises 0.7pc to two-week high

David Rogers

Strong gains in US and European stocks combine with some rebound in commodity prices to drive Australia's stock market up to two-week highs.

Markets look to see if the ECB follows the BoC with a "dovish" rate cut, while expecting US non-farm payrolls data on Friday to back the rally in bonds.

The S&P/ASX 200 index ends up 0.7 per cent at a two-week daily close of 7821.6 after hitting an intraday high of 7837.8.

Tech, industrials, health care, financials and discretionary lead broad-based gains after the Euro Stoxx 50 rose 17 per cent and the S&P 500 rose 1.2 per cent as the US 10-year bond yield fell 5bp to a two-month low of 4.28 per cent.

Major banks rise 0.6-1.1 per cent with CBA hitting a record high of $125.97.

Resources struggle for traction but commodities rebound with iron ore futures 2.8 per cent to $US109.80, and copper, gold and oil up about 0.5 per cent.

IDP Education dives 7.5 per cent on a profit warning, but trims early declines.

3:46 pm June 6, 2024

SkyCity allowed to appeal tax call

Joseph Carbone

The High Court will allow SkyCity to appeal a decision by the Adelaide Supreme Court stating SkyCity Adelaide misinterpreted the amount of tax owed from earnings on customer loyalty points.

In a release, the company said if it fails in its appeal, it could have to pay up to $22.8m, but if successful the penalty would be reduced to up to around $2.4m.

SkyCity have been one of the worst large-cap decliners in Thursday trading after cutting guidance and announcing it would not pay a dividend.

Shares in SKC have so far dropped 13.1 per cent to $1.40 per share.

2:13 pm June 6, 2024

US regulator probes Microsoft AI deal

The US Federal Trade Commission is investigating whether Microsoft structured one of its latest deals with an artificial-intelligence startup to avoid a government antitrust review of the transaction.

Microsoft in March hired Inflection AI’s co-founder and almost all of its employees and agreed to pay the startup around $US650m as part of a licensing fee to resell its technology. Inflection’s investors were told they would be repaid over time by the sales proceeds.

Companies are required to report acquisitions valued at more than $US119m to federal antitrust-enforcement agencies, which have the option to investigate a deal’s impact on competition. The FTC or the Justice Department, which share antitrust authority, can sue to block mergers or other investments if an investigation finds the deal would substantially reduce competition or lead to a monopoly.

The FTC, which has also been sifting through AI investments made by Google-owner Alphabet is concerned that tech behemoths could eventually acquire or control the most promising AI applications, giving them a tight grip on systems that have humanlike abilities to converse, create art and write computer code.

– The Wall Street Journal

2:11 pm June 6, 2024

ASX 200 Financial Sector testing 17 year highs

David Rogers

IG market analyst Tony Sycamore points out that the ASX200 Financials sector has surged over 3 per cent this week, reaching a high of 7550.8 this morning —less than seven points away from the 7556.9 record high it struck in November 2007, before tumbling 64 pe cent in the Global Financial Crisis.

"The ASX200 Financial sector is up more than 12 per cent in 2024, confounding the analyst community, which overwhelmingly have 'sell' or 'underweight' recommendations on the big banks," he notes.

CBA is up 1.4 per cent at $125.14 after hitting a record high of $125.97.

For the year to date, Westpac leads with a 17.3 per cent rise, while NAB is up 13.4 per cent, ANZ is up 12 per cent and CBA is up 11.8 per cent.

2:06 pm June 6, 2024 Highlight

Northern votes reveal investor divide

Valerina Changarathil

Rare earths explorer Northern Minerals' final results from its annual general meeting in Perth are out, revealing a 37.5 per cent vote against its executive pay plan and the narrow miss by stakeholder Yuxiao Fund's controller Wu Tao in winning a board seat. The final numbers also reveal the deep divide between management and its investors.

A vote of 25 per cent or more against the remuneration motion is considered a first strike. A repeat performance next year, a second strike, will force the board to consider a spill motion.

Mr Tao, whose appointment to the board was not endorsed by Northern Minerals' existing management, saw a 50.94 per cent vote against his election.

Investors divisions were also obvious in the board-endorsed election of chief executive and managing director Shane Hartwig, who took on the role on May 27 as executive chairman Nicholas Curtis resigned in the face of pressure from Yuxiao Fund. Mr Hartwig recieved a 43.53 per cent vote against his election. Board-endorsed director Liangbing Yu also got a 42.23 per cent vote against his re-election.

The other three non-endorsed nominees – Tao Qiang, Chongxiao Wang and Dong Yun – saw their election resolutions dismissed with 91.2 per cent, 71.35 per cent and 58.05 per cent no votes, respectively.

1:33 pm June 6, 2024

ACCC concerned over Icon lease buys

Valerina Changarathil

The competition regulator ACCC has concerns with radiation services provider Icon Group's proposed acquisitions of three leases in Queensland and Victoria.

The regulator on Thursday released a statement of issues, seeking market feedback, in relation to the impact of Icon's purchase of leases at St Andrew's Ipswich and St Vincent's Private Hospital Northside, both in Queensland, and St John of God Geelong Hospital in Victoria.

Icon and GenesisCare operate 94 per cent of all private radiation clinics in Australia.

"We are concerned that the proposed acquisition will entrench Icon's already strong market position, which may increase its ability to raise the prices it charges or reduce the level of service it provides patients” ACCC commissioner Stephen Ridgeway says.

It comes after the ACCC green-lighted Icon's joint venture with Cyberknife Australia on May 22. Submissions are due by June 20.

1:10 pm June 6, 2024

NTU first strike; Chinese board bid fails

Matt Bell

Northern Minerals is set for a first strike against its remuneration report, but four resolutions to bring more China-linked directors on board – including stakeholder Yuxiao Fund's controller Wu Tao – have failed.

The company will disclose the final results to the market shortly, but confirmed at its AGM the proxy vote was 37.6 per cent against its remuneration report with 73 per cent of all shareholders having voted before the meeting. A vote of 25 per cent or more against the motion is considered a first strike. A repeat performance next year, a second strike, will force the board to consider a spill motion.

At the conclusion of the meeting in Perth, the board said that motions to appoint four new China-backed directors to the board of Northern Minerals had failed.

Shareholder and Yuxiao Fund controller, Chinese businessman Wu Tao, has also narrowly missed out. His proxy vote sat at 49.1 per cent in favour, which was not supported by the board. The other three with links to China's rare earths industry had a for vote of between 9 and 28 per cent.

12:57 pm June 6, 2024 Highlight

Fortescue lobs 'misuse' claims at ex-staff

Angelica Snowden

Mining billionaire Andrew Forrest's Fortescue group has lobbed sensational claims against former chief scientist and senior lieutenant, alleging their start up engaged in "industrial-scale misuse" of confidential information.

Revelations that Fortescue launched legal action against Bart Kolodziejczyk, Mark Masterman, Bjorn Winther-Jensen and their company Element Zero — who have rejected allegations against them — surfaced in a Federal Court judgement published on Wednesday night.

"The allegation at the heart of the proceedings is an alleged 'industrial-scale misuse' of what is said to be, by the Fortescue parties, confidential information concerning its 'green (carbon dioxide free) iron' technology," Justice John Logan said. "It is alleged that, without the knowledge of the Fortescue parties, upon resignation of the second and third respondents from the employment of the Fortescue parties in late 2021, information concerning such a process was copied and taken."

Justice Logan said Fortescue claimed the stolen information was used to design, engineer and construct an industrial pilot plant for an electrochemical reduction process. But a spokesman for Element Zero rejected the allegations. Shares in Fortescue are up nearly 1 per cent to $24.35 just before 1pm AEST.

12:40 pm June 6, 2024

ASX 200 up 0.7pc; financials lead

David Rogers

Australia's shares trade strongly after the US market surged to record highs and European shares also rose strongly amid falling bond yields.

The S&P/ASX 200 is up 0.7 per cent at 7825 after hitting a two-week high of 7835.6, having bounced as much as 3 per cent from a four-week low of

All sectors are up with financials, health care and industrials outperforming.

CBA leads major banks, rising as much as 2 per cent to a record high of $125.97, CSL adds 1.3 per cent and Brambles leaps 2.6 per cent.

Resources lag behind with BHP flat though commodities seem to be stabilizing with iron ore, copper, gold and crude oil bouncing slightly Thursday.

IDP Education is down 4.5 per cent after falling 13 per cent on a profit warning.

12:34 pm June 6, 2024

Wu Tao could get NTU seat

Matt Bell

Motions to appoint four new Chinese-backed directors to the board of Northern Minerals look set to fail, but 9.8 per cent shareholder Yuxiao Fund's controller, Chinese businessman Wu Tao may get a spot at the table.

A vote on the non-board endorsed nominees is in focus on Thursday as shareholders linked to China's rare earths industry seemingly attempt to exact greater influence on the ASX-listed rare earths group.

Proxy votes show Wu Tao has 49.1 per cent of votes in favour, while the other three had between 9 and 28 per cent.