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.
Rates concerns derail Aussie market
The Australian sharemarket had a poor day on Thursday, in fact its worst loss in more than three months, spooked by Federal Reserve Chairman Jerome Powell telling the US Congress that higher rates might be needed, albeit at a slower pace of rising.
The benchmark S&P/ASX 200 index sank 119.4 points, or 1.6 per cent, to 7195.5, led by a sell-off in mining and technology stocks. The broader All Ordinaries index dropped 124.6 points, or 1.7 per cent, to 7,381.
All sectors ended lower, with information technology the worst performing sector, down 3.9 per cent. Network-as-a-service platform Megaport plunged 64 cents, or 8.2 per cent, to $7.16; logistics software company WiseTech shares slid $3.20, or 4 per cent, to $76.90; accounting software leader Xero gave up $5.21, or 4.4 per cent, to $113.33; data centre operator NEXTDC slipped 36 cents, or 2.8 per cent, to $12.42; enterprise software company TechnologyOne dropped 77 cents, or 4.8 per cent, to $15.38; imaging software company ProMedicus surrendered $2.29, or 3.3 per cent, to $67.02; and electronic design automation software business Altium retreated $1.44, or 3.9 per cent, to $35.90.
The interest rate-sensitive real estate sector also had a bad day, led by a 26-cent, or 3.7 per cent fall by Dexus, to $7.93; after it announced about $1 billion in write-downs. Stockland Group lost 14 cents, or 3.3 per cent, to $4.10; Charter Hall Group slipped 31 cents, or 2.8 per cent, to $10.76;, and Mirvac lost 5 cents, or 2.1 per cent, to $2.28.
Interest-rate concerns also flowed through to the financial sector, with Macquarie Group losing $4.80, or 2.7 per cent, to $175.67; ANZ falling 38 cents, or 1.6 per cent, to $23.30; Commonwealth Bank sliding $1.60, or 1.6 per cent, to $100.08; and Westpac easing 18 cents, or 0.9 per cent, to $21.04. “Mini-major” Bendigo Bank lost 13 cents, or 1.5 per cent, to $8.59, while Bank of Queensland’s share price woes continued, down a further 12 cents, or 2.1 per cent, to $5.51.
Building services group Johns Lyng dived 71 cents, or 11.9 per cent, to $5.24 after it downgraded its forecast on commercial construction revenue and earnings in a trading update, taking the shares back to where they were a year ago.
Healthcare heavyweight CSL lost $1.63, or 0.6 per cent, to $281.99, but Telix Pharmaceuticals regained 22 cents, or 1.8 per cent, to $12.50.
Resources on the downward ride
The miners were also under pressure. In the bulk miners, BHP sank $1.10. or 2.4 per cent, to $45.12; Rio Tinto lost $1.40, or 1.2 per cent; and Fortescue Metals walked back 49 cents, or 2.2 per cent, to $21.53.
In gold, Gold Road Resources dipped 14.5 cents, or 8.3 per cent, to $1.60 after it lowered its forecast on annual production from the company’s Gruyere mine. Ramelius Resources dropped 9.5 cents, or 6.9 per cent, to $1.285; St Barbara gave up 3 cents, or 5.9 per cent, to 48 cents; and Northern Star Resources declined 42 cents, or 3.2 per cent, to $12.62.
In the lithium space, producer Allkem eased 3 cents, to $16.29; fellow producer Pilbara Minerals slipped 9 cents, or 1.8 per cent, to $4.96; IGO, which mines nickel and lithium, edged ahead by 2 cents, to $15.11; and Mineral Resources, which produces iron ore as well as lithium, lost 14 cents, or 0.2 per cent, to $73.11.
Among the lithium project developers, Core Lithium burnt 3.5 cents, or 3.6 per cent, to 94 cents; Lake Resources closed 1.5 cents, or 4.7 per cent, lower at 30.5 cents; and US-based Piedmont Lithium retreated 2.5 cents, or 2.8 per cent, to 88 cents; but Liontown Resources managed to advance 4 cents, or 1.4 per cent, to $2.95.
In energy, Woodside Energy slipped 29 cents, or 0.8 per cent, to $35.35; Santos walked back 4 cents, or 0.5 per cent, to $7.63; and Brazilian-based producer Karoon Energy softened 3 cents, or 1.5 per cent, to $2.01.
In coal, Whitehaven Coal came back 7 cents, or 1 per cent, to $6.72; New Hope Corporation lost 13 cents, or 2.4 per cent, to $5.24; Coronado Global Resources eased 1.5 cents, or 1 per cent, to $1.505; Yancoal Australia slipped 6 cents, or 1.3 per cent, to $4.45; Stanmore Resources weakened 10 cents, or 3.6 per cent, to $2.65; and Terracom was stripped of 2 cents, or 4.4 per cent, to 43 cents.
‘Old Lady’ surprises with oversized hike
In the US, the major indices were mixed as investors and traders grapple with confusion over whether global central banks – not just the Federal Reserve – are finished with interest rate rises. Last night, the Swiss National Bank raised its base rate by 25 basis points to 1.75 per cent and in the UK, the Bank of England, a.k.a. the ‘Old Lady of Threadneedle Street,’ surprised the markets by lifting rates 50 basis points (0.5 percentage points), when most economists had expected a 25-basis-point increase. The rate hike came after UK inflation came in higher than expected, earlier in the week.
The 30-stock Dow Jones Industrial Average retreated 4.81 points to 33,946.7; the broader S&P 500 rose 16.2 points, or 0.4 per cent, to 4,381.89, and the tech-heavy Nasdaq Composite index rallied 128.41 points, almost 1 per cent, to 13,630.61.
On the bond market, the US 10-year yield gained 7.2 basis points, to 3.797 per cent, while the 2-year yield rose 8.6 basis points, to 4.8 per cent.
Gold eased US$20.54, or 1.1 per cent, to US$1,913.55 an ounce, while in oil, the global benchmark Brent crude oil grade fell sharply, down US$2.98, or 3.9 per cent, to US$74.14 a barrel, and US West Texas Intermediate crude gave up 4 cents, to US$69.47 a barrel.
The Australian dollar is buying 67.60 US cents this morning, slightly weaker from 67.64 US cents at the local ASX close on Thursday.
