ASX 200 ends flat; Lendlease chair Michael Ullmer to exit; Webjet lifts; Eagers drops; D-Day for BHP’s Anglo move

Inghams says not impacted by bird flu case. Webjet gains on demerger plan. Eagers dives on earnings warning. Telstra hit by downgrades. D-Day for BHP’s next Anglo move. 

Earnings updates, corporate moves and economic updates on investor radars. Picture: Gaye Gerard

Welcome to the Trading Day blog for Wednesday, May 22. The ASX 200 index gave up its gains to end flat, down just 3.6 points at 7848.10 points. Wall Street's Nasdaq and S&P 500 closed at fresh highs overnight.

The Aussie dollar is trading around US66.68c.

Updates

5:15 pm May 22, 2024

Inghams queried over shares tumble

Megan Neil

Inghams' big share price drop has been queried by the ASX, with the poultry group blaming reports about the detection of bird flu at a Victorian egg farm.

Inghams shares tumbled as much as 16 per cent to a low of $3.21 on news that Agricultura Victoria had confirmed the presence of the avian influenza virus after a number of poultry deaths at the egg farm near Meredith.

The falls were trimmed after Inghams issued a biosecurity update to the ASX, noting the media reports and saying there was no impact on its operations.

In response to the price query from the ASX, Inghams pointed to the media reports about the detection of bird flu at a table egg farm.

"Inghams has no commercial broiler farms located in the affected region. As a result, there is currently no impact to Ingham’s operations or its supply chain, and the company continues to supply the market as usual," Inghams said, repeating the information in its earlier ASX statement.

Inghams shares closed 5.8 per cent weaker at $3.60.

4:54 pm May 22, 2024

UK inflation slows sharply

Agency writers

Britain’s annual inflation rate dropped to a near three-year low in April as energy prices cooled further, official data showed Wednesday, easing a cost-of-living crunch and stoking rate cut expectations.

The Consumer Prices Index slowed to 2.3 per cent from 3.2 per cent in March, the Office for National Statistics revealed in a statement. That marked the lowest level since July 2021, when inflation had stood at 2.0 per cent – which is also the target for the Bank of England.

The news comes after the BoE this month signalled a summer interest rate cut, after holding borrowing costs at a 16-year peak of 5.25 per cent to further dampen price rises.

Inflation slowed rapidly last month after energy regulator Ofgem lowered the price cap on energy bills for most UK households to the lowest level for more than two years.

“There was another large fall in annual inflation led by lower electricity and gas prices, due to the reduction in the Ofgem energy price cap,” said ONS chief economist Grant Fitzner. “Tobacco prices also helped pull down the rate, with no duty changes announced in the budget.

“Meanwhile, food price inflation saw further falls over the year. These falls were partially offset by a small uptick in petrol prices.” Gas and electricity bills sank in April on lower wholesale energy prices, which had surged in the wake of key producer Russia’s invasion of Ukraine.

– AFP

4:37 pm May 22, 2024

ASX 200 flat before FOMC minutes, Nvidia results

David Rogers

Australia's share market erased an intraday gain in disappointing fashion before FOMC minutes and Nvidia's results early Thursday Australian time.

The S&P/ASX 200 index closed down 0.1 per cent at 7848.1 points after hitting a three-day high of 7879.6, only about 30 points off a record high.

Gains in big banks and miners were offset by falls in the consumer discretionary and communications sectors.

Rio Tinto led iron ore miners with a 1.6 per cent rise as Singapore iron ore futures rose 1.3 per cent to a three-month high of $US122.35 after China's latest property stimulus measures announced last week.

ANZ rose 1.1 per cent and Macquarie added 1.3 per cent but CBA fell 0.2 per cent. Transurban soared 2.4 per cent but Telstra fell 4.2 per cent to a fresh three-year low close of $34.42 on multiple broker downgrades.

Technology One rose 6.6 per cent on upgrades and Webjet soared 7.7 per cent on demerger plans. But Eagers dived 15 per cent on a profit warning.

Inghams fell 5.8 per cent, partly recovering from bird flu worries after the company said it was currently unaffected after the virus was found in Victoria.

Volatility in some stocks may have been magnified by a large transition portfolio through Citi which is believe to have been completed Thursday.

Bell Potter's Richard Coppleson says it caused two-day business in mid-to-large cap growth stocks and "huge" volume worth $7.8bn.

3:18 pm May 22, 2024

Treasury assumes 3.5pc rise for low-paid

Ewin Hannan

Treasury’s wage growth forecasts assume the Fair Work Commission will award a 3.5 per cent minimum wage increase this year, halfway between competing union and employer claims, the Albanese government says.

Appearing before the commission on Wednesday, the government said the 3.5 per cent “technical assumption” was based on the 3.6 per cent March quarter inflation figure and was consistent with its position that the real wages of low-paid workers did not go backwards.

A 3.5 per cent increase would split the difference between the competing claims of the ACTU, which wants a 5 per cent rise, and the Australian Chamber of Commerce and Industry, which is pushing for a two per cent increase.

Treasury is forecasting real wages growth over the next four years, growing from 0.5 per cent in the next two financial years to 1 per cent in the subsequent two financial years.

In the current commission proceedings, the ACTU is also seeking a further 4 per cent increase for award-reliant workers in female-dominated industries.

Asked by Justice Hatcher what the government’s position was on ACTU’s secondary 4 per cent claim, the government said it did not comment on specific submissions by other parties but noted the importance of gender equality and addressing gender inequities in the system.

The government said any increase would need to be considered in the context of the capacity of business and government to fund the pay rises.

While productivity has grown for two consecutive quarters, the expected recovery in both cyclical and long term productivity remained highly uncertain, the government said. Weaker than expected productivity growth and higher than expected nominal wages growth could have implications for inflation.

3:01 pm May 22, 2024

All eyes on Nvidia results: eToro

Megan Neil

Investors are focused on first-quarter earnings by the world's biggest chipmaker Nvidia amid "tension in the market", eToro market analyst Sam North says ahead of the results announcement after the US market closes on Wednesday.

"Despite the stock's incredible recent performance, there's tension in the market, with investors eager to see if Nvidia's impressive momentum from 2023 has carried into early 2024," he says.

"The company has been riding high on the AI wave, with its stock price soaring over 200 per cent in the previous year, and Wall Street is expecting Nvidia to report a whopping $US24.5bn in quarterly revenue, which would be an astounding 240 per cent increase from the previous year."

Mr North says analysts expect Nvidia to post quarterly earnings of $US5.58 per share, which would represent another increase.

"Nvidia's growth remains astonishing, positioning it as the third most valuable company globally, bolstered by the AI boom which is driving its expansion across various industries. Despite facing competition from AMD in graphics processors, Nvidia maintains an 80 per cent market share. However, further market share declines could challenge its growth targets."

2:54 pm May 22, 2024

Former ASX exec is new NSX CEO

Megan Neil

Former ASX executive Max Cunningham has joined NSX as its new chief executive, as the alternative bourse tries to drive new listings growth.

Mr Cunningham has been CEO of private company capital platform FCX and was previously the group executive of listings at the ASX from 2013 to 2022. He was also head of equity capital markets at Goldman Sachs from 2008 to 2012.

NSX chair Tim Hart said Mr Cunningham's main initial responsibilities will be to drive business growth in NSX in new listings development and other business opportunities.

Mr Cunningham will begin as CEO on June 3. "NSX has challenges to provide a viable alternative to a strong incumbent and compete for new listings, however with those challenges come great opportunities to provide both better service and more transparent regulatory outcomes and accountability for both listed companies and investors," he said.

Acting CEO Tod McGrouther will remain as a non-executive director.

2:29 pm May 22, 2024 Highlight

Inghams sees no impact from bird flu

David Rogers

Inghams currently sees no impact on its operations or supply chain from the detection of bird flu at an egg farm in Victoria.

In a biosecurity update, the ASX-listed poultry producer says it has no commercial broiler farms in the affected region. "As a result, there is currently no impact to Ingham’s operations or its supply chain, and the company continues to supply the market as usual."

Inghams notes that Victoria's agriculture department has quarantined the infected farm and implemented an exclusion zone around it.

Agriculture Victoria is also undertaking a disease investigation, which includes detailed tracing of all movements related to the infected farm, Inghams says.

"In response, Inghams has implemented enhanced biosecurity measures, which are in addition to its already strict standard protocols, throughout its Victorian operations. These measures include restricting access to all Victorian operations – livestock and processing.

The update should be positive for Inghams shares which were last down 11 per cent at $3.41 after hitting a nine-month low of $3.21 on Wednesday.

2:03 pm May 22, 2024

'Give us our $4bn' Allan Gray tells Lendlease

Tansy Harcourt

Allan Gray chief investment officer Simon Mawhinney said he has met with embattled property company Lendlease to advise on “what rational people should do.”

Lendlease is facing calls for a major executive shakeup after a long period of poor performance.

“They are too arrogant by half and they're trying to take over the world, they've expanded into geographies in which they have no competitive advantage,” Mr Mawhinney told investors at its annual conference.

“They've allocated $4 billion of shareholder capital to those geographies and collectively made zero for shareholders. That's not a good outcome.”

As for what Lendlease should do, the Allan Gray executive is clear.

“Just exit those geographies, come back home and give us our $4 billion and get someone else to do your job.”

The Leadlease chair Michael Ullmer has already announced he will leave the poor performing property developer.

1:32 pm May 22, 2024 Highlight

Bosses want 'real' wage cut: FWC

Ewin Hannan

Fair Work Commission president Justice Adam Hatcher has told employers their bid to limit the annual minimum wage increase to two per cent represents a "real wage cut" for low-paid workers.

During the final hearing ahead of handing down the minimum wage decision in weeks, Justice Hatcher questioned Australian Chamber of Commerce and Industry chief economist Peter Grist about the chamber’s call for a below-inflation two per cent pay increase.

Mr Grist told the hearing that containing inflation needed to be the priority and inflation needed to return to the middle of the RBA's target range of two to three per cent as quickly as possible. “All parts of the economy must play their role in achieving this, including administered wages through this annual wage review,” he said.

At this point, Justice Hatcher asked Mr Grist: “When you say their role. What’s their role? To take a further real wage cut in order to achieve that result?” Mr Grist initially denied the chamber was proposing a real wage cut, but Justice Hatcher replied; “well, you’re proposing two per cent, aren’t you?”

The ACTU is seeking a 5 per cent increase in minimum and award wages and a further 4 per cent for workers in female-dominated industries. The government’s recommendation was that the commission ensured the real wages of low-paid workers did not go backwards.

1:25 pm May 22, 2024

Inghams dives amid bird flu fears

Valerina Changarathil

Shares in poultry giant Inghams are down nearly 12 per cent to $3.37 in afternoon trading as Agriculture Victoria races to investigate the strain of avian influenza detected at a farm south of Ballarat.

The Meredith farm has been placed in quarantine and tests on samples will be undertaken to check if it's the same variant of bird flu responsible for a global outbreak impacting farms in Europe, Asia, the Middle East, Africa and North and South America.

It's the first time the virus has appeared in Australia since 2020 when it was found on an egg farm south of Ballarat.

Inghams is the largest poultry company across Australia and New Zealand with a network of 345-plus facilities across Australia and NZ, including farms and hatcheries.