Roy Keenan from Yarra Capital Management shares insights with James Dunn from The Inside Network on the role of active management. The Inside Adviser
After the Hayne Royal Commission many advisers decided to steer away from large dealer groups in favour of becoming self-licensed. In the last six months, however, that trend has taken an abrupt turn.
Local market trades lower ahead of US inflation print
A tech slide dragged the ASX indices lower on Wednesday, ahead of the US inflation data coming in overnight.
Consensus expectations were for the US headline consumer price index (CPI) to show core inflation at 3.6 per cent for the year to August, up from 3.2 per cent a month ago – a significant rise. Such a jump would imply a stronger likelihood of another interest rate hike by the Fed next month, unnerving the markets.
Nine of the ASX’s 11 sectors finished weaker on Wednesday, led by tech stocks, which retreated 1.6 per cent on the sector index. Sector heavyweights WiseTech Global, Xero and NEXTDC led the fall, with WiseTech down 68 cents, or 1 per cent, to $67.32; Xero shedding $2.33, or 1.9 per cent, to $119.44; and NEXTDC down 28 cents, or 2.2 per cent, to $12.72.
The tech woes helped erode the S&P/ASX 200 by 53 points, or 0.7 per cent, to 7,153.9, while the broader All Ordinaries index dropped 57.2 points, or 0.8 per cent, to 7,345.7.
The utilities and energy indices were slightly higher, the latter as the global benchmark Brent crude oil prices rose above $US92 a barrel for the first time since last November. Woodside Energy put on 16 cents, or 0.4 per cent, to $37.85; while Santos added 2 cents, or 0.3 per cent, to $7.74. Fuel refiner and retailer Viva Energy fell 7 cents, or 2.4 per cent, to $2.86 as it confirmed that major Dutch shareholder Vitol was selling a 16 per cent stake in the company, taking its remaining interest to about 30 per cent.
In big mining, BHP was down 39 cents, or 0.9 per cent, to $43.80; Fortescue Metals weakened 36 cents, or 1.8 per cent, to $19.60; and Rio Tinto walked back 72 cents, or 0.6 per cent, to $113.39.
In lithium, takeover target Liontown Resources – in which Gina Rinehart’s Hancock Prospecting has revealed a strategic 7.7 per cent stake, which could block the $6.6 billion bid from US lithium giant Albemarle – advanced 3 cents to $3.03; but producer Allkem lost 44 cents, or 3.3 per cent, to $12.74, and fellow producer Pilbara Minerals sank 20 cents, or 4.4 per cent, to $4.40. Lithium and nickel miner IGO, which went ex-dividend on the day, was hammered $1.08, or 7.6 per cent, lower to $13.17.
Among the big banks, National Australia Bank eased 13 cents, or 0.4 per cent, to $28.98; Westpac gave up 7 cents, or 0.3 per cent, to $21.49; and Commonwealth Bank lost 41 cents, or 0.4 per cent; but ANZ managed to add 6 cents, or 0.2 per cent, to $25.33.
Pact to be packed-off private
Elsewhere, beleaguered packing manufacturer Pact Group rebounded 5 cents, or 7.4 per cent, to 72.5 cents, after billionaire businessman Raphael Geminder revealed plans to take the company private. Geminder’s Kin Group, which owns a 50 per cent stake in Pact, has made a 68 cents per share off-market takeover offer for the remaining shares.
Household cleaning products company Pental surged 9.5 cents, or 30.2 per cent, to 41 cents, after announcing that it is selling its consumer products business to paints group Dulux. The deal, which excludes Pental’s Duracell and Bondi Soap brands, is valued at $60 million.
Drug developer Starpharma jumped 3 cents, or 23.1 per cent, to 16 cents, after positive interim results for its cancer drug, DEP irinotecan.
US inflation jump points to rate hike
In the US, the Labor Department reported that consumer price inflation (CPI) rose by 0.6 per cent during August, for a 3.7 per cent annual increase, up from 3.2 per cent in July. The monthly increase in inflation – the biggest increase in a year – was mainly driven by increases in rent and fuel costs. The core rate, which strips out food and energy, rose by 0.3 per cent, slightly higher than economists had forecast, with the annual rate falling to 4.3 per cent from 4.7 per cent in July. The data implies that the Fed’s leaning toward rate rises is not over, with another hike coming into play at the September meeting in a week.
On the back of the inflation report, the blue-chip Dow Jones Industrial Average shed 70.46 points, or 0.2 per cent, to 34,575.53, while the broader S&P 500 eked out a 5.54-point gain to 4,476.44 and the tech-heavy Nasdaq Composite index advanced 39.97 points, or 0.3 per cent, to 13,813.59.
On the bond market the US 10-year Treasury yield retreated 2.7 basis points to 4.259 per cent, while the 2-year yield was down 5.1 basis points to 4.99 per cent.
On the commodity front, gold eased US$3.99, or 0.2 per cent, to US$1,909.09 an ounce; the global benchmark Brent crude oil grade lost 18 cents, or 0.2 per cent, to US$91.88 a barrel, and US West Texas Intermediate crude gained 22 cents, or 0.3 per cent, to US$88.74 a barrel.
The Australian dollar is buying 64.21 US cents this morning, up from 64.1 cents at the ASX close on Wednesday.
