Major banks gain after NAB results, buyback. Pexa jumps on NatWest deal. Investors dump Bapcor after profit warning. Woolworths sales disappoint, boss says Coles 'out-traded us'. US investigation hits Block.
Welcome to the Trading Day blog for Thursday, May 12. The ASX 200 closed 0.2 per cent higher at 7587.00 points. Wall Street ended mixed after the Fed kept rates steady and chair Jerome Powell said a hike is unlikely.
The Aussie dollar is trading around US65.38c.
Construction giant Boral will be removed from the ASX 200 index, to be replaced by pharmacy group Sigma Healthcare.
S&P Dow Jones Indices says it will remove Boral from the ASX 200 as a result of the board-approved, off-market takeover offer from Seven Group.
Boral will drop out of the benchmark index before the open of trading on Friday, May 10. It will be replaced by Sigma Healthcare, which plans to merge with pharmacy giant Chemist Warehouse.
Australia's share market ends slightly higher after a solid intraday rise.
The S&P/ASX 200 index ends up 0.2 per cent at 7587 after rising as much as 0.6 per cent to 7616 amid a similar rise in S&P 500 futures after an overall dovish Fed statement and press conference from chair Powell.
Sectors are mixed with gains in tech, financials, materials, industrials, property and health care offset by falls in consumer staples, communications, utilities, energy, consumer discretionary stocks.
NAB led solid gains in banks, climbing 1.5 per cent as its 1H profit met estimates and a $1.5bn buyback was announced. Macquarie reports Friday.
Amcor jumped 4.2 per cent after strong results and guidance this week.
PEXA jumped 11 per cent on optimism about its strategic alliance with NatWest in the UK. Qube rose 6.7 per cent on improved earnings guidance.
But Woolworths dived 4.2 per cent on weak sales. Coles fell 1.9 per cent.
Woodside fell 1.2 per cent after Brent crude oil fell 5 per cent.
Block fell 5.6 per cent as NBC News said Federal prosecutors are investigating its financial transactions and practices.
Telstra sank 1.4 per cent to an almost 3-year low of $3.59 per cent.
Former EY partner Robert Perry has joined the board of department store group Myer Holdings.
Myer says Mr Perry has extensive experience and expertise in audit, internal audit and risk management from a 36-year career with the professional services firm, with a major focus on the retail and consumer sector.
"With his deep experience and expertise in finance, audit and risk management, especially in the retail and consumer space, Rob’s appointment enhances and complements the board’s existing skills set," Myer executive chair Olivia Wirth says.
Eureka Group's board has rejected a sweetened takeover offer for the listed accommodation company from Aspen Group.
Aspen on Thursday lifted its all-scrip offer to 0.28 Aspen securities per Eureka share, from 0.26, saying it is its best and final offer.
However, Eureka's directors unanimously recommend that shareholders reject the revised offer. "The Eureka board has considered the revised offer and remains of the view that the implied value of the revised offer is inadequate," the board said.
"The directors’ recommendation is subject to the independent expert’s review of the revised offer but the directors note the implied value of the revised offer of $0.481 per Eureka share remains below the independent expert’s fair value of Eureka shares on a 100 per cent controlling interest basis of $0.52 – $0.55 per Eureka share (representing an 8-13 per cent discount)."
The Eureka board says it has written notice from Filetron, trustee for the Hunter Discretionary Trust that holds 19.68 per cent of Eureka shares, that its position remains unchanged and it will not accept Aspen's revised offer.
Net exports are expected to detract from first quarter GDP growth, according to Commonwealth Bank economists.
Australian Bureau of Statistics data shows the nation's goods trade balance fell to $5.02bn in March, the smallest surplus since November 2020. Goods exports rose by 0.1 per cent while goods imports lifted by 4.2 per cent.
CBA senior economist Belinda Allen says net exports are expected to detract as much as 0.8 percentage points from first quarter GDP growth, after adding 0.6 percentage points in the fourth quarter of 2023. That fits the recent pattern of a positive then negative contribution, she adds.
"We do anticipate that at least some of this weakness from the external sector will be offset by a lift in inventory build‑up," Ms Allen says.
Oxford Economics also expects merchandise trade will likely make a negative contribution to GDP growth in the first quarter. "Given the surge in import volumes relative to exports, trade appears to have been a large drag on growth in Q1, adding downside risks to our forecast of a small rise in GDP in Q1," Oxford economist Sarah Ray says.
"Looking ahead we doubt the recent strength in import values can last and we still expect weak domestic demand to drag values lower over the remainder of 2024. This should provide an offset to our expectation of continued weakness in export commodity prices over the coming quarters."
Bonza customers have been told there won’t be any flights until next Wednesday at the earliest as negotiations continue over the airline’s grounded fleet.
Currently, five Boeing 737 Max 8s remain parked at Sunshine Coast, Gold Coast and Melbourne Airports after being repossessed by leasing company AIP Capital early Tuesday.
The move prompted Bonza to enter voluntary administration, appointing Hall Chadwick to try to navigate a way out of its financial predicament and back into the air.
Initially customers were told there was no chance of flights resuming before Friday with the repossession in force until at least midnight on Thursday.
An update from Hall Chadwick said discussions with the lessor and relevant parties regarding the resumption of operations were continuing.
“As such the administrators are unable to resume flight operations from Friday 3 May 2024 up to and including Tuesday 7 May 2024,” said Hall Chadwick.
Commonwealth Bank has completed the sale of its Indonesian subsidiary PT Bank Commonwealth.
CBA announced in November that it was selling its 99 per cent shareholding in PT Bank Commonwealth to PT Bank OCBC NISP (OCBC Indonesia), a subsidiary of Oversea-Chinese Banking Corporation, for an upfront cash consideration of approximately $220m.
OCBC Indonesia, the country's ninth largest bank, assumes ownership over PTBC which has more than 1.2 million customers and total assets of about $1.8bn.
CBA on Thursday said completion of the sale follows the required regulatory approvals. "The sale of the shareholding in PTBC is consistent with CBA’s strategy to focus on its banking business in Australia and New Zealand," CBA said. "The transaction is expected to be broadly neutral to the Group’s Common Equity Tier 1 ratio."
Receivers have been appointed to copper producer Austral Resources, with the business to continue to trade as they attempt to determine its future.
Deloitte turnaround and restructuring partners Jason Tracy, Grant Sparks and Sean Holmes were appointed joint and several receivers and managers of Austral Resources on Wednesday, a statement to the ASX on Thursday said.
"The business will continue to trade while the receivers and managers undertake an urgent assessment of the financial position and determine the future of the business and its assets," the Deloitte statement said.
Queensland-based Austral Resources said secured creditor Win Finance No.359 appointed the receivers, over a secured debt owed to it by Austral Resources Operations.
"Austral advises that constructive negotiations had been continuing with secured creditors until receipt of this notice. Austral will continue to deal with the receivers and other stakeholders and will update the market as required," Austral Resources said.
Austral Resources shares have voluntarily suspended from trading on the ASX since September, as it sought to complete financing and a significant restructure.
A Robe River Kuruma woman from the Pilbara told the Rio Tinto board at the AGM their country's bloodlife was "sucked dry" by more than a decade's worth of water extraction.
The West Pilbara (Bungaroo) Water Supply Scheme was established in 2011 to help supply water to five Pilbara coastal towns almost 200km away via a Rio Tinto borefield on Robe River Kuruma Country. Rio Tinto also uses the water from the system for mining related operations including dust suppression.
Between 6 to 10 gigalitres (One gigalitre is the equivalent of 1 million litres) are being taken from the Bungaroo aquifer each year.
The Robe River Kuruma People are named after the Robe River and they describe it as their lifeblood. The Bungaroo feeds into the Robe and they say the country has been drying up for years and is being destroyed.
Robe River Kuruma Aboriginal Corporation (RRKAC) deputy chairwoman Leanne Evans said they have made repeated requests to the company to stop the extraction and are trying to take their plea to the Board.
"The water you are pumping from the Bungaroo is killing our country, it's sucked dry," Ms Evans said. "I came to Brisbane to speak with the board of Rio Tinto face-to-face, because the letters do not work. The Robe River is a bloodline for our culture, our heritage and our people."
Rio chief executive Jakob Stausholm said he visited the Robe River site two months ago. "This is a very long and difficult history stemming back from the 1960s," Mr Stausholm said.
"Yes, we have made agreements in the past, but the question is how do we make agreements as equals? I remain convinced that we can find a great pathway forward for the mutual benefits and we'll have a solution that can work for the Kuruma people as well."
– Mohammad Alfares
Australia's share market extends its intraday rise as US futures continue to point to a solid rise in the US market as investors digest US rates guidance.
The ASX 200 is up 0.6 per cent at 7612 matching a rise in S&P 500 futures.
Sectors remain mixed with only six of 11 in the green.
Consumer staples, discretionary and energy continue to drag after updates from Woolworths and Bapcor and a sharp fall in oil prices overnight.
But banks are soaring after NAB sweetened a mostly in-line interim profit with a $1.5bn share buyback announcement.
Shares and NAB and Westpac are up more than 2 per cent.
Charter Hall Retail, Hostplus bid $718m for HPI. Smiggle boss sacked over 'serious misconduct'. Premier Investments flags lower earnings. Westpac CEO successor named. Stockland's divestment offer to clear ACCC hurdle. Star updates awaited.
CBA hits all-time intraday high. Macquarie up 2.3pc on the day. First Super's CFMEU-linked co-chair steps down after APRA action. Pacific Smiles CEO Andrew Vidler resigns.
