ASX 200 up; BlueScope warning; Westpac Q3 profit flat, A2 Milk's profit miss; SkyCity, Aus Vintage flag impairments; Reece beats expectations

Mixed reactions to Westpac update. BlueScope falls on FY24 profit drop. A2 Milk plummets on missed expectations. Lendlease losses grow. Australian Vintage, SkyCity flag impairments. Reece tanks on near-term challenges.

Earnings and economic updates will underpin investor sentiment this week. Picture: Gaye Gerard

Welcome to the Trading Day blog for Monday, August 19. The ASX 200 index closed 1 per cent higher to 7980.40 points.

The Aussie dollar is trading around US66.87c at 5.10pm AEST.

Updates

4:54 pm August 19, 2024

ASX 200 creeps up to two-week high

David Rogers

Australia's stock market rose slightly is quiet trading amid earnings reports as global markets lost momentum after a strong rebound in the past two weeks.

In its seventh-consecutive positive trading day the the S&P/ASX 20 index closed up 0.1 per cent at a two-week high close of 7980.4 points after hitting 7990.9.

Seven of 11 sectors fell with notable falls in consumer staples, materials, energy and consumer discretionary stocks.

a2Milk fell 14 per cent on a weak outlook, BHP fell 0.7 per cent and Fortescue lost 1.9 per cent as iron ore futures hit a two-year low near $US92 a tonne, Ampol fell 4.8 per cent after reporting. Bluescope lost 3.1 per cent on a weak outlook.

But the utilities, financials, health care and tech sectors rose.

Westpac jumped 2.5 per cent to a six-year high of $30.40 after its trading update showed stronger than expected net interest margins.

CBA rose 0.8 per cent to a record high $139.25.

NAB rose 1.2 per cent and CSL added 0.8 per cent.

Audinate soared 20 per cent after reporting.

Nuix soared 26 per cent after reporting.

2:12 pm August 19, 2024

EML chair's sudden exit

Valerina Changarathil

More than a month after implementing management and board changes, payments company EML has also announced the exit of its chairman Luke Bortoli.

The former Afterpay chief financial officer from 2018-2021 became chairman at EML in February 2023 before also joining Pilbara Minerals as its chief financial officer in April last year.

The official announcement of Dr Bortoli's exit comes as media reports linked his departure to disquiet among some board members over his spending of significant company funds on personal expenses, which were subsequently returned.

Incoming chair Anthony Hynes' appointment to the board as director at the end of June had been "in the expectation of the chairmanship transition", EML told investors on Monday, but no mention of this impending change was made during the initial appointment announcement on July 1. He will become EML's chair on August 28.

Former chief executive Kevin Murphy became director on June 30, after Kevin Hynes was roped in for the top job. Petrina Coventry has joined EML's board as of Monday. Director Jim Pollock will leave EML's board along with Dr Bortoli on August 28.

The board renewal follows an intense 18 months of stabilising the company and the resolution of regulatory and other issues, EML told investors. “Having worked with the team to develop and execute on the strategy to stabilise and strengthen the business, I am pleased to be able to step back from EML knowing it is in great hands and great shape for the future," Dr Bortoli said.

1:35 pm August 19, 2024

ASX 200 rises 0.3pc to two-week high

David Rogers

Australia's stock market hits a fresh two-week high in quiet trade.

The S&P/ASX 200 index rises 0.3 per cent to 7990.9 points on track for a seventh consecutive daily rise and a 4.7 per cent rebound from its August low.

The break above 7900 last week sets up a test of the record high at 8149.

Most sectors are down but big banks and health care stocks are driving it.

Banks remain perky after better than expected updates from CBA, NAB, Westpac in the past few days. Westpac is up 2.3 per cent an on track for its highest close in six years while NAB adds 1.3 per cent. CSL is up 1 per cent.

1:30 pm August 19, 2024 Highlight

ACF backs out of Woodside Scarborough challenge

Valerina Changarathil

Oil and gas giant Woodside and the Australian Conservation Foundation have agreed to dismiss the latter's legal challenge to a primary environmental approval for the major Scarborough project offshore WA.

The ACF, represented by the Environmental Defenders Office, commenced Federal Court proceedings in relation to the offshore environmental assessment of the project in June 2022. The ACF had sought an injunction to stop offshore activities, but the parties have now agreed to seek orders from the court to dismiss the proceedings.

Details of the agreement are scant but Woodside chief executive Meg O'Neill welcomed the dismissal.

"Litigation against energy projects like Scarborough is an ineffective way to pursue solutions to global climate and energy challenges. Such approaches create needless uncertainty for businesses, communities and the people who depend on the energy these projects produce," she said. Woodside shares are 0.8 per cent higher at $26.33 at 1.30pm AEST.

1:04 pm August 19, 2024

Westpac restoring confidence as 'effective' competitor

Valerina Changarathil

Westpac's "little better than expected" third quarter trading update has prompted a 3 per cent upgrade to its fiscal 2024 profit forecast at Morningstar.

But there is no change to the bank's $28 fair value estimate as operating and bad debt expenses track a little lower than anticipated. Westpac reported a flat $1.8bn profit for the quarter on Monday.

Morningstar equity analyst Nathan Zaia said the net interest margin improvement to 1.92 per cent as "a welcome sight". "Westpac is restoring confidence it can compete effectively across all key segments, growing home loans, business loans, and deposits, in line with or faster than market without undercutting peers on price."

Shares in Westpac are up 2 per cent to $30.39 at 1pm AEST.

12:50 pm August 19, 2024

Catalyst funds to boost Simberi prep: St Barbara

Valerina Changarathil

Mining group St Barbara says the $25.2m cash proceeds from the sale of its 5.2 per cent stake in Catalyst Metals on Friday last week will be used to strengthen its balance sheet liquidity as it progresses Simberi project plans in Papua New Guinea.

St Barbara, which had been a shareholder of Catalyst since March 2017, said the sale was "at no discount to market price" and that strong demand was a determinative factor in selling, at a time when the market was giving minimal recognition to its investment portfolio value.

The group, which holds $22.5m worth of shares across Brightstar Resources, Patronus Resources and Peel Mining, said its strategy is to actively and patiently manage its portfolio, rather than take discounted block trade sales.

12:37 pm August 19, 2024

Nuix lifts 24pc on strong earnings

Valerina Changarathil

Software group Nuix's shares are up 24 per cent in afternoon trading to $4.32 on its strong earnings growth, but legal costs have weighed on the overall result.

The group reported a 14 per cent jump in FY24 annualised contract revenue to $211.5m, compared to FY23. Underlying earnings before interest, taxes, depreciation and amortisation, which excludes net non-operational legal costs of $8.5m, rose 38.7 per cent to $64.4m. Nuix said this was an "outcome of stronger revenue growth paired with general cost containment". Statutory EBITDA, which includes the impact of net non-operational legal costs, rose 60 per cent to $55.9m. Net profit improved to $5m, from a loss of $5.6m in FY23.

In April, corporate regulator ASIC dropped its investigation into share trading by Nuix chief executive Jonathan Rubinsztein as the group fielded a takeover approach from US-based legal software company Reveal. ASIC concluded its investigation after finding insufficient evidence that Mr Rubinsztein traded shares with knowledge of the Reveal offer.

Nuix is now awaiting judgement on another ASIC case against current and former members of the company's board over alleged breaches of continuous disclosure requirements, as well as claims of misleading and deceptive conduct.

12:27 pm August 19, 2024

ASX 200 flat amid earnings reports

David Rogers

Australia's stock market was flat at midday after recovering from an opening dip in mixed trading amid earnings reports.

The S&P/ASX 200 index was little changed at 7965 points with gains in sectors including utilities, health care, tech and financials offsetting falls in consumer staples, consumer discretionary, industrials, materials, energy and property.

Westpac remains up 1.4 per cent after a strong trading update, albeit it has trimmed much of its early rise to a six-year high of $30.43.

NAB remains buoyant after its positive trading updated on Friday but other banks struggle with CBA down 0.4 per cent.

Iron ore miners remain on the back foot with BHP down 0.3 per cent after Singapore iron ore futures hit a 21-month low near $US91.45 a tonne.

Results cause mixed reactions from reporting companies.

a2Milk dives 18 per cent, BlueScope falls 2.8 per cent, Reece loses 4.1 per cent and Lendlease slips 1.2 per cent, but Nuix soars 24 per cent, GPT gains 3 per cent, Ampol falls 3.2 per cent, and Audinate soars 10 per cent.

12:27 pm August 19, 2024

Master Builders backs push to bring back ABCC

Valerina Changarathil

Lobby group Master Builders Australia has backed Opposition Leader Peter Dutton's push to reintroduce the Australian Building and Construction Commission (ABCC).

Mr Dutton on Monday introduced two private members' bills towards this push.

"Master Builders strongly opposed the abolition of the ABCC in 2022, knowing it would give the CFMEU and other building unions the green light for thuggery, bullying and intimidation on worksites,” said chief executive Denita Wawn.
"An industry specific regulator makes sure that everyone on building and construction sites have to play by the rules, so that workers and small businesses are protected… This is a step in the right direction, because we need to see an industry specific regulator with real teeth to ensure permanent change," she said.

But these measures will not be successful without the first step of appointing of an external administrator to the CFMEU, the group said. The industry has urged both sides of Parliament to reach an agreement and pass the CFMEU administration legislation as a matter of urgency.

11:52 am August 19, 2024

Australia the home of ten-bagger stocks: eToro

David Rogers

Want to find the next 'ten-bagger' stock? Look no further than the Aussie market.

New analysis from eToro finds retail investors are more likely to hit a jackpot by investing in ASX companies than their FTSE 350 counterparts.

eToro says the ASX is currently home to 19 ten-baggers – or stocks that have delivered 1,000 plus per cent returns in a decade. Unsurprisingly, mining stocks continue to dominate, with 12 of the 19 ten-baggers being resource companies.

In contrast, the FTSE 350 only has two ten-baggers, giving investors a meagre 0.7 per cent hit rate. Meanwhile, the tech-heavy S&P 500 boasts 21 ten-baggers.

Given the S&P 500's tech-heavy nature, almost all of the US ten-baggers are tech stocks, with names such as Nvidia, Tesla and Palo Alto Networks on the list.

“A ten-bagger is the holy grail for many investors and looking locally could be the ticket for finding that stock when compared to other major markets," says eToro Market Analyst Josh Gilbert.

"The complexity of finding and investing in such opportunities requires careful analysis, risk management, and a willingness to take a long-term view.

"Riding a stock to a 1,000 per cent gain without taking profit requires serious patience, belief in the business and a strong mentality.”