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Banks sap ASX rebound; Afterpay leads tech surge

The ASX 200 is still in front on Thursday but has pulled back from a strong early start.

The benchmark index – which rose by as much as 1.3 per cent from a 10-week low – was last 0.6 per cent higher at 5911.0. The big four banks are now weighing on the market after an initial rise.

NAB has fallen the furthest, down 1.2 per cent at $17.23.

The ASX 200 has pulled back from early highs on Thursday.

The ASX 200 has pulled back from early highs on Thursday. Credit:Jim Rice

Local tech stocks continued to set the pace as the market bounced back from a $40 billion drop on Wednesday.

The tech sector climbed 2.7 per cent with the so-called WAAAX contingent all posting strong gains.

Afterpay was up 4.6 per cent at $77.48, Xero rose 1.6 per cent to 94.95, Wisetech Global 1 per cent to $28.37, Appen 3.1 per cent to $32.50 and Altium 1.2 per cent to $34.04.

Computershare was 1.9 per cent higher at $12.60 and NEXTDC jumped 2.9 per cent to $11.14. Technology One and Megaport were each up by more than 3.5 per cent.

Financials and property stocks were in the red and underperforming, but all other sectors had added to their tally.

Markets in China, Hong Kong, Japan, and Korea are also ahead. US futures are currently down 0.4 per cent.

Superannuation giant HESTA is demanding an independent review of all agreements between Rio Tinto and traditional owners saying it has lost confidence in the company’s ability to do this itself following the blasting of the 46,000-year-old Juukan Gorge caves.

As Rio Tinto’s board heads into crisis meetings to consider investor calls for senior staff including chief executive Jean-Sébastien Jacques to be dismissed, the $52 billion super fund has added to pressure for strong action, saying accountability for the disaster must “rest at the highest levels” of the organisation.

Rio Tinto investors are calling on the board for accountability at the 'highest levels' for the blasting of an ancient Aboriginal site.

Rio Tinto investors are calling on the board for accountability at the ‘highest levels’ for the blasting of an ancient Aboriginal site.Credit:AFR

But the fund has also launched a push for Rio’s board to urgently address the “larger, systemic” issue concerning its treatment of the traditional custodians of the land on which the miner operates.

The destruction of the two culturally significant Juukan Gorge rock shelters, against the wishes of the area’s traditional owners, has shed light on the power imbalance between resources companies and First Nations people and raised concerns around the use of restrictive contractual obligations contained in some land-use agreements that prohibit traditional owners from speaking out publicly.

Full story here

The ASX 200 is still in front on Thursday but has pulled back from a strong early start.

The benchmark index – which rose by as much as 1.3 per cent from a 10-week low – was last 0.6 per cent higher at 5911.0. The big four banks are now weighing on the market after an initial rise.

NAB has fallen the furthest, down 1.2 per cent at $17.23.

The ASX 200 has pulled back from early highs on Thursday.

The ASX 200 has pulled back from early highs on Thursday. Credit:Jim Rice

Local tech stocks continued to set the pace as the market bounced back from a $40 billion drop on Wednesday.

The tech sector climbed 2.7 per cent with the so-called WAAAX contingent all posting strong gains.

Afterpay was up 4.6 per cent at $77.48, Xero rose 1.6 per cent to 94.95, Wisetech Global 1 per cent to $28.37, Appen 3.1 per cent to $32.50 and Altium 1.2 per cent to $34.04.

Computershare was 1.9 per cent higher at $12.60 and NEXTDC jumped 2.9 per cent to $11.14. Technology One and Megaport were each up by more than 3.5 per cent.

Financials and property stocks were in the red and underperforming, but all other sectors had added to their tally.

Markets in China, Hong Kong, Japan, and Korea are also ahead. US futures are currently down 0.4 per cent.

NSW has recorded seven new coronavirus cases in the latest 24-hour reporting period, all with known sources. Of the seven cases:

  • One is a student at St Paul’s Catholic College, Greystanes, who had been in self-isolation after being identified as a close contact
  • Two are linked to Concord Hospital: a staff member and a close contact of a previous case who had both been in isolation
  • Two attended the Eastern Suburbs Legion Club at Waverley
  • Two are returned overseas travellers in hotel quarantine

Follow the live and free coronavirus blog here

A case from south-eastern Sydney described yesterday as having no known source has now been identified as having attended the Eastern Suburbs Legion Club.

Health authorities in Queensland have now carried out more than one million COVID-19 tests, with no new cases recorded in the state overnight.

Just 27 cases remain active from a total confirmed tally of 1143, Premier Annastacia Palaszczuk told Parliament on Thursday morning.

Victorian Premier Daniel Andrews began his daily media conference by confirming 51 new COVID-19 and seven additional deaths in the past 24 hours.

There have been 701 deaths in the state and there are now 1483 active cases, a drop of about 120 from yesterday.

The deaths, four of which are linked to aged care homes, include four men in their 70s, two women in their 80s and a man in his 80s.

The number of active cases in regional Victoria dropped by ten to 72 and there were no new cases in regional areas recorded in the past 24 hours.

Resolute Mining has withdrawn production and cost guidance for its Syama gold mine in Mali after receiving notice of a 10-day strike by workers.

The African-focussed miner slipped by as much as 13 per cent at Thursday’s ASX open and was last 7.6 per cent lower at 98 cents.

Resolute Mining shares are down after the firm withdrew cost and production guidance at its Syama mine.

Resolute Mining shares are down after the firm withdrew cost and production guidance at its Syama mine. Credit:Phil Carrick

Resolute said the principal demand of the union was a request to reinstate Syama workers who have been stood down on full pay due to the company’s COVID-19 protocol.

“Given the uncertainty of the impact of the strike and consequential actions that may be taken by the company on production at Syama, Resolute withdraws production and cost guidance for the full year ending 31 December 2020,” it said in a note.

RBC analysts said the strike could hurt operations at Syama, which it said had been relatively unaffected by the recent military coup in the region.

Syama is the cornerstone of Resolute’s portfolio and accounts for 65 per cent of net asset value and 68 per cent of RBC’s earnings forecasts.

Digital lender Plenti is hoping to cash in on major players retreating from the car loan market, which is undergoing a significant shift, as it aims to raise $55 million from investors.

Plenti, formerly known as RateSetter, is planning to float on the ASX later this month, and a key part of its growth plan is to exploit the “structural change” in the markets for automotive loans, renewable energy loans, and personal loans.

Plenti chief executive Daniel Foggo.

Plenti chief executive Daniel Foggo.Credit:AFR

Plenti chief executive and co-founder Daniel Foggo said car financing was the fastest-growing part of its new lending. He added that Australia’s automotive finance market was worth more than $30 billion a year in new loans – bigger than the credit card market – and Plenti saw an opening to give investors greater direct exposure to this business.

“If you think of equity investors… it’s very hard for them to get direct access to this market in the prime segment. That’s because it’s hidden within the big banks,” Mr Foggo said.

Full story here

Orica, Origin Energy and Qantas director Maxine Brenner is set to join the Woolworths board in December.

Woolies said Ms Brenner is also expected to chair the company’s sustainability committee, following the retirement of Jillian Broadbent at the 2020 annual general meeting.

Ms Brenner, who is also a member of the University of NSW Council and an independent director of Growthpoint Properties Australia, will also join the supermarket’s audit, risk management and compliance committee.

“I am delighted that the board was unanimous in the decision that Maxine should join,” Woolworths chairman Gordon Cairns said on Thursday.

“Having previously worked with her at Origin, I have no doubt that her skills and experience will add tremendous value.

Ms Brenner will stand for election at the 2021 AGM.

Fuel giant BP is the latest oil major to offload a clutch of petrol stations after selling a $NZ262 million ($240 million) half stake in its New Zealand petrol stations to two Australian-managed property funds.

The two funds, part of the acquisitive Charter Hall Group, will share a 49 per cent interest in 70 of BP’s servos, the bulk of its company-owned New Zealand convenience stores.

BP is offloading a $240 million half stake in its NZ petrol stations to funds managed by Charter Hall.

BP is offloading a $240 million half stake in its NZ petrol stations to funds managed by Charter Hall. Credit: Supplied

The Charter Hall Long WALE REIT (CLW) and Charter Hall Retail REIT (CQR) will control an equal share of the portfolio at an acquisition price of around NZ$130.8 million for each fund, putting a 6.25 per cent initial yield on the transaction.

Last month, Ampol spun off half of its service station properties into a $1.4 billion property trust to be jointly owned by Singapore sovereign wealth fund GIC and local real estate manager Charter Hall Group.

Charter Hall was also behind the $840 million purchase in December last year of a 49 per cent stake in 225 BP fuel outlets in Australia. Those outlets exchanged on a 5.5 per cent initial yield.

BP’s New Zealand portfolio is geographically diverse with about 78 per cent of the convenience stores in metro locations and about three-quarters of them in New Zealand’s top three cities.

The ASX-listed CLW fund manager said it will tap equity markets for capital to pay for the transaction.

The real estate trust will undertake a fully underwritten $60 million institutional placement to part-fund the acquisition and associated costs.

A non-underwritten security purchase plan for eligible securityholders in Australia and New Zealand will raise up to $10 million, it said.

The fund manager will stump up the balance of the transaction fee from available borrowing capacity.
CQR will fund its share from borrowings.

Completion of the transaction is subject to approval from the New Zealand Overseas Investment Office.

The Australian sharemarket bounced back from a 10-week low at Thursday’s open, with tech stocks leading the charge.

The ASX 200 jumped by as much as 1.3 per cent in the opening exchanges and appears on a mission to repair Wednesday’s $40 billion plunge.

After 15 minutes the local bourse was up 1.1 per cent, or 65.8 points, at 5944.4 and all sectors were ahead.

The opening rise came after Wall Street snapped a three-day losing streak that slashed 10 per cent off the NASDAQ.

ASX tech stocks were the furthest ahead in early trade. Afterpay was up 4.6 per cent at $77.48. Before the open it had shed 20 per cent of its value from a record high close on September 1.

Xero rose 3.2 per cent to $96.43 and Wisetech Global jumped 2.5 per cent to $28.78. Appen was 4.6 per cent higher at $32.96.

Miners were also doing some heavy lifting, with BHP and Rio Tinto up 1.1 per cent and 1.8 per cent respectively. Fortescue Metals bounced 1.3 per cent and gold miner Newcrest was 1.9 per cent higher on encouraging exploration results in Western Australia and Canada.

Department store Myer was down 13.7 per cent at 22 cents after reporting a massive $172 million loss for the year on coronavirus impacts.

The ASX 200 is now ahead 0.2 per cent for the week.

Pharmacy wholesaler Sigma Healthcare made $1.64 billion in revenue for the half with like-for-like growth of 9.5 per cent across its brands, though the company has warned its pharmacy business was still negatively impacted by the pandemic.

The owner of pharmacy brands Amcal and Guardian saw a reported net profit after tax jump from $2.5 million in the six months to July 31 last year to $4.7 million this year. However, the company is undertaking a large restructure and those numbers are impacted by a variety of expenses as well as the recent sale of two of its distribution centres.

Amcal pharmacy owner Sigma says sales were up, but it was still negatively impacted by the pandemic this half.

Amcal pharmacy owner Sigma says sales were up, but it was still negatively impacted by the pandemic this half. Credit:Glenn Hunt

Underlying net profit was down by 5.1 per cent for the half when those factors were taken into account.

The company’s turnaround strategy, ‘Project Pivot’, is aiming to realise more than $100 million in efficiency gains by 2021 and chief executive Mark Hooper said this morning the company is still on track to achieve this despite the pandemic, which is an “outstanding result”.

Sigma did flag challenges in its pharmacy business, however, where “reduced merchandise and marketing income” due to COVID-19 had an impact on the numbers. The business is also allowing a greater provision for ‘doubtful debts’ given the current economic conditions.

Sigma declined to give future earnings guidance, citing the “vagaries” of the pandemic. It did not declare an interim dividend.

Struggling department store Myer has swung to a massive $172 million loss for the past financial year after the retailer was forced to write down the value of its brand name after being battered by the COVID-19 crisis.

Myer told investors on Thursday its statutory net loss after tax for the year ending July 25 was $172.4 million, a massive 800 per cent decline on the net profit of $24.5 million in posted in 2019.

Department store Myer slumped to a $172.4 million loss, from a $24.5 million profit a year ago.

Department store Myer slumped to a $172.4 million loss, from a $24.5 million profit a year ago. Credit:Edwina Pickles

This huge loss was primarily driven by $159 million in significant items, including a $95.9 million write-down to the value of the company’s brand names and a $37 million impairment to the value of the company’s leases.

Excluding these significant items, Myer reported a net loss after tax of $11.3 million. Revenue for the retailer also fell, down 15.8 per cent to $2.52 billion.

Myer shares were last trading at 25.5 cents and have shed 47 per cent of their value in 2020.

The company’s shares traded above $3.70 a decade ago.

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