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Mining heavyweight BHP powered the share market to a ten-week high as shareholders cheered a record dividend and the second-largest full-year profit in the company’s history.
A 4.09 per cent jump in the “Big Australian” helped lift the S&P/ASX 200 41 points or 0.58 per cent. The commodities giant accounts for roughly ten per cent of the Australian benchmark by index weighting.
Also piquing buying interest were a well-received trading update from app-maker Life360 and an improved takeover offer for seafood farmer Tassal Group. Energy stocks dragged after yesterday’s soft Chinese economic data.
What moved the market
Australia’s largest listed company did the heavy lifting as the share market rose for a second day. The ASX 200 closed above 7100 for the first time since the second week of June, finishing at 7105 after trading as high as 7132.
“After extending its rally this week above the critical psychological 7000 level, the ASX200 is eyeing crucial resistance at 7161, coming from the 200-day moving average – a level the ASX200 has not closed above in 15 weeks,” City Index market analyst Tony Sycamore said.
BHP shareholders will receive a record dividend after the miner defied expectations recent declines in commodity prices would dent earnings. The miner increased its full-year profit by 34 per cent.
The Big Australian will pay a final dividend of US$1.75 per share on record underlying earnings of US$40.6 billion at a record margin of 65 per cent.
“BHP remains the lowest cost iron ore producer globally and we delivered record annual sales from Western Australia Iron Ore,” CEO Mike Henry said.
Also helping sentiment was a rebound in consumer confidence and signs the RBA may slow the pace of rate hikes. The weekly ANZ-Roy Morgan confidence index bounced 4.9 per cent to 84.2 points last week
The minutes from this month’s RBA meeting indicated the bank expects to raise its benchmark rate in the months ahead, but will be guided by data. The bank said it was “not on a pre-set path”.
“The size and timing of future interest rate increases will be guided by the incoming data and the Board’s assessment of the outlook for inflation and the labour market, including the risks to the outlook. The Board is committed to doing what is necessary to ensure that inflation in Australia returns to the 2 to 3 per cent target range over time,” the minutes said.
The board raised the cash rate target at the conclusion of the meeting by 50 basis points to 1.85 per cent.
Wall Street rose overnight as traders bet weak economic data from the US and China might slow the pace of rate hikes this year. The S&P 500 overcame early weakness to advance 0.4 per cent. The Dow closed above its closely-watched 200-day moving average for the first time since April.
Winners’ circle
Seafood farmer Tassal Group climbed 5.11 per cent after accepting an improved takeover offer from Canada’s Cooke Inc valuing the business at $1.1 billion. The firm entered a Scheme Implementation Deed under which shareholders will receive $5.23 per share, up from a previous offer of $4.67.
Life360 gained 5.45 per cent after more than doubling half-year revenues to $99.8 million. Subscription revenue grew 88 per cent year on year.
Temple & Webster soared 29.77 per cent after beating profit expectations. The online furniture retailer reported an $11.97 million full-year net profit, down 14.2 per cent on last year but more than twice what the market expected. Revenues grew 31 per cent.
Aside from BHP, the best of the heavyweights were Aristocrat Leisure +1.91 per cent, Telstra +1.74 per cent, Fortescue Metals +1.57 per cent and Woolworths +1.13 per cent.
CSL gained 1.08 per cent ahead of tomorrow’s trading update. Macquarie Group and CBA were the pick of the banks, both rising around 1 per cent.
Hotel and bottlo business Endeavour climbed 2.26 per cent to an all-time high.
Doghouse
Volatility in investment markets knocked fund manager Challenger’s full-year net profit down 57 per cent to $254 million. Assets under management contracted 10 per cent to $99 billion. The share price slumped 10.11 per cent.
James Hardie eased 0.87 per cent after housing market uncertainty and inflationary pressures prompted a guidance cut. The fiber cement supplier lowered its fiscal year adjusted net income guidance to US$730-US$780 million from previous guidance of US$740-$US820 million.
Buy now, pay later player Sezzle dived 15.85 per cent after its half-year net loss blew out to US$43.1 million from US$30.4 million in the prior comparative period.
Landlord SCA Property dropped 3.73 per cent after warning changes to interest rates will impact distributions. The firm expects adjusted funds from operations to contract to 15 cents per unit this year from 15.3 cpu in FY22.
Industrial property giant Goodman Group increased its full-year operating profit by 25 per cent to $1.528 billion. The company expects to lift operating earnings per share by 11 per cent this fiscal year to 90.3 cents. The share price dipped 0.48 per cent.
Office landlord Growthpoint Properties faded 0.53 per cent after forecasting a stronger distribution this financial year despite rates and inflationary headwinds. Full-year profit declined to $459.2 million in FY22 from $553.2 million the previous year.
Seven West Media fell 3.85 per cent as a decline in 1H23 advertising overshadowed “the best Seven television EBITDA results in 11 years”. Underlying full-year net profit jumped 60 per cent to $200.8 million. However, the company warned the total TV advertising market declined 7 per cent in 1H23.
Job search engine SEEK fell 5.13 per cent despite increasing full-year profit from continuing operations by 130 per cent to $240.8 million. The company expects revenue to expand this year to $1.25-$1.3 billion.
Sims dropped 3.25 per cent after warning aggressive interest rate hikes had dented demand for recycled metals. The firm said ferrous prices peaked at US$700 a tonne in March and have since fallen to US$320-US$400.
Other markets
A downbeat session on Asian markets saw the Asia Dow ease 0.19 per cent, Japan’s Nikkei 225 index 0.01 per cent and Hong Kong’s Hang Seng 0.47 per cent. China’s Shanghai Composite inched up 0.03 per cent.
US futures drifted lower. S&P 500 futures faded four points or 0.1 per cent.
Oil remained under pressure from yesterday’s soft Chinese economic data. Brent crude declined 84 US cents or 0.9 per cent to US$94.26 a barrel.
Gold slipped US$1.40 or 0.1 per cent to US$1,796.70 an ounce.
The dollar bounced 0.23 per cent to 70.35 US cents after falling more than 1 per cent overnight.
