Australian stocks hit new heights in hopes of strong US growth

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WEEKLY MARKET REPORT

Australian stocks eventually hit new highs, wiping out virtually all of the heavy losses from the COVID-19 wobble to hit a new 15-month record close.

The rallies were broad-based across most sectors as investors parked their inflation worries for now and instead celebrated the record amounts of stimulus expected to be pumped into the US.

The new closing high caused the ASX 200 to gain 1.2% to 7,179.5 points as the two major barbell sectors of the Australian market – resources and banks – fired at the same time.

The ASX 200’s absolute all-time high of 7199.79 points was already reached in February 2020 and is now largely in the target zone.

Miners and banks show the way

BHP (ASX: BHP), Rio Tinto (ASX: RIO) and Fortescue (ASX: FMG) all performed very strongly, while the big banks CBA (ASX: CBA), Westpac (ASX: WBC), ANZ (ASX: ANZ )) and NAB (ASX: NAB) also rose sharply, with Commonwealth breaking the $ 100 mark and closing 1.6% at $ 100.56.

One particularly notable large-cap stock was BHP spinoff South32 (ASX: S32), which rose an impressive 5.6% to $ 3.00.

At the close of trading, the financial sector was up 1.34% and the materials sector was up 1.8%, making a significant contribution to the record performance.

The only sector that fell on Friday was information technology.

$ 4 billion bid on Tabcorp bookmaker and media arm

The market leaders weren’t the only ones who helped. Betting technology company BetMakers, backed by Matthew Tripp, has launched a $ 4 billion cash and scrip offering for Tabcorp’s (ASX: TAH) bookmaker and media arm.

If successful, the offering would add a global focus for the Australian gambling group.

The offer follows cash bids of $ 3.5 billion from Ladbrokes’ owner Entain and private equity group Apollo.

BetMakers said the offer would consist of $ 1 billion in cash to Tabcorp, which would be raised through debt and $ 3 billion in treasury stock.

If the offer is successful, Tabcorp investors would own 65% of the shares in BetMakers, which sells back-end technology to betting companies around the world and is seeing significant growth in the US after tripling its market value last year.

The Tabcorp board said it has not yet commented on BetMaker’s proposal, but the company is conducting a strategic review of TAB that is expected to complete in late June.

Shareholders have put pressure on the TAB board to sell or divest the TAB betting business from its booming lottery arm due to mounting pressure from online competitors like Sportsbet and Ladbrokes.

Tabcorp shares rose 2.2% to $ 5.17.

The strong market came despite the seven-day lockout on the Victorian circuit breaker to contain a COVID-19 outbreak, showing that investors are more relaxed about outbreaks.

Small cap stock action

The Small Ords Index rose an excellent 3% and closed the week at 3293.4 points.

May 2021 ASX 200 Chart Small Ords
ASX 200 versus Small Ords

Small-cap companies that made headlines this week were:

Kleos Space (ASX: KSS)

Under a new contract, the Netherlands-based company Innovative Solutions in Space (ISISPACE) will build and support a cluster of four nanosatellites for Kleos Space. The cluster is to be launched before the end of the year.

The satellites will form Kleos’ Polar Patrol Mission (KSF2) and will be the company’s third cluster to be launched.

KSF2 is expected to double Kleos’ data-as-a-service coverage across both poles and generate revenue.

Kin Mining (ASX: KIN)

An initial drill program on Kin Mining’s Mount Flora prospect has uncovered “spectacular” gold intersections, with the company now focusing on the prospect’s potential due to its proximity to the flagship Cardinia WA gold project.

The drilling returned a better interval of 22 meters at 8.96 g / t gold over 24 meters, including 8 meters at 21 g / t gold over 32 meters.

At Cardinia, the company also achieved high grade gold during an aircore program with “significant” gold tests returned on the Eagle and Crow prospectuses.

Lifespot Health (ASX: LSH)

It was an Australian premiere this week for Lifespot Health, which launched its Medihale Sealed Pod Medical cannabis inhaler for Australian patients under the Therapeutic Goods Administration’s Special Access Scheme.

A first group of patients has used the device, the pod and the cannabidiol e-liquid formulation from EC Pharma from third-party suppliers.

Chief Executive Officer Matthew Golden said Small caps The early patient feedback was “very positive”.

The Medihale is the first sealed inhalation device of its kind in Australia, according to Lifespot.

Meteoric Resources (ASX: MEI)

Gold and copper explorer Meteoric Resources has resumed drilling on the Palm Springs gold project in the Kimberley region of Western Australia.

The company plans to complete 10 holes and will also conduct geophysical surveys.

In Brazil, Meteoric is drilling an “exciting” copper target on the Juruena gold-copper project.

Managing Director Dr. Andrew Tunks said he was “lifted” by the geology seen while drilling the target.

Caravel Minerals (ASX: CVV)

Drilling at the Caravel Minerals Bindi copper deposit continues to encounter large areas of copper mineralization. The latest results come from the Bindi East Limb.

Highlight intersections were 164 m at 0.34% copper from 32 m and 62 m at 0.37% copper from 148 m, including 12 m at 0.77% copper.

The company has built on its success at Bindi with similarly wide zones in the Dasher deposit announced earlier this week.

Dasher South’s highlight results were 56 meters at 0.34% copper over 192 meters and 32 meters at 0.38% copper over 100 meters, including 4 meters at 0.4% copper.

TZ Limited (ASX: TZL)

TZ Limited, technology developer for smart lock and self-service safe deposit box banks, has continued its global expansion strategy after it was reported that it had signed a hosting and service upgrade contract for US $ 1 million with global transportation and logistics company DSV South Africa. Dollar has been completed.

The agreement builds on previous agreements in which TZ DVS provided new safe deposit box banks in the amount of USD 3 million in this financial year alone.

Under the new agreement, TZ will provide hosted high availability infrastructure, system monitoring, network management, software subscription and maintenance services for DSV’s 450 Locker Bank network.

In the US, TZ is seeing growing demand for its technology. The company has reportedly received orders from new and existing customers in the country worth $ 2.2 million since early April.

Sayona Mining (ASX: SYA) and Piedmont Lithium (ASX: PLL)

Sayona Mining and Piedmont Lithium are one step closer to lithium production in the Abitibi-Temiscamingue region of Quebec.

Through the joint venture subsidiary Sayona Quebec, an agreement was reached with secured creditor Investissement Quebec that leaves final approval for the acquisition of North American Lithium’s production facilities in the hands of the Quebec Supreme Court.

If the Supreme Court gives the go-ahead, the duo will acquire the lithium production facilities in the Abitibi-Temiscamingue area. The Sayona Quebec joint venture expects to begin producing lithium “as soon as possible” after the transaction is completed.

Envirosuite (ASX: EVS)

As part of a global expansion strategy, Envirosuite is raising $ 14 million through an expedited, non-cancelable entitlement offering and institutional placement.

The procurement funds will help Envirosuite expand its customer base for its environmental management technology, offered as SaaS, and its solution as a service product.

Envirosuite is primarily targeting the water treatment market with its recently launched water solution product, which is said to be valued at $ 2.8 billion.

Next week

A blizzard of statistical data is released this week, including an impressive 15 pieces of data released by the Australian Bureau of Statistics and many other offshore companies alone.

There is also news from the Reserve Bank, which will release the results of its monthly meeting on Tuesday with no expectation of any change in interest rates.

However, the RBA could also announce its expectation of the economic growth (GDP) data released on Wednesday and give market participants an idea of ​​their bond purchase target and 3-year yield curve target.

Another interesting release to look out for is CoreLogic’s May Australian House Prices Report. House prices are likely to have risen another 2% over the month.

Other publications to look out for include government finances, balance of payments, building permits, purchasing manager numbers, consumer sentiment, new car sales, and international and retail and new loan numbers.

The biggest international news is the US employment data, which shows the number of jobs increased by 620,000, with the unemployment rate expected to fall from 6.1% to 5.9%.

A number of other U.S. releases are expected, including a number of purchasing manager estimates, payrolls, and retail and new car sales. When it comes to moving markets, however, the US job market numbers are the main catalyst.

This week’s top stocks



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