Australian headline inflation hits highest in 32 years: ASX up 0.12% at noon

Market Reports

by Lauren Hayes

The S&P/ASX 200 posted gains this morning as sentiment from Wall Street overnight improved over the Fed potentially turning less aggressive, combined with a decline in yields.

The local market was awaiting the annual consumer price index data, which came in at 7.3 per cent -- the highest level since December 1990 (rising 1.8 per cent in the September quarter). The benchmark was trading 0.34 per cent higher ahead of the report before trading almost flat. At noon, the S&P/ASX 200 is 0.12 per cent or 8.00 points higher at 6,806.60.

The hot headline inflation data caused bond yields to rise amidst heightened speculation the RBA will increase the cash rate by 50 basis points next week. Three-year yields rose 8 basis points to 3.58 per cent, and the ten-year rate added 3 basis points to 3.99 per cent.

The SPI futures are pointing to a rise of 7 points or 0.10 per cent.

Best and worst performers

The best-performing sector is Real Estate Investment Trusts, up 1.60 per cent. The worst-performing sector is Consumer Staples, down 2.87 per cent.

The best-performing stock in the S&P/ASX 200 is Costa Group Holdings (ASX:CGC), trading 8.97 per cent higher at $2.43. It is followed by shares in IGO (ASX:IGO) and Ramelius Resources (ASX:RMS).

The worst-performing stock in the S&P/ASX 200 is Medibank Private (ASX:MPL), trading 15.98 per cent lower at $2.94. It is followed by shares in Endeavour (ASX:EDV) and Whitehaven Coal (ASX:WHC).

Asian news

The Nikkei 225 in Japan has risen 0.87 per cent in early trade, and the Topix has so far gained 0.79 per cent. South Korea’s Kospi has gained 0.2 per cent and the Kosdaq is 0.3 per cent lower. MSCI’s broadest index of Asia-Pacific shares outside Japan has ticked marginally higher.

India’s market is closed for a holiday. In corporate news, Standard Chartered, Ping An, and SK Hynix are among the companies slated to report earnings Wednesday.

Company news

European Lithium (ASX:EUR) has entered into a business combination agreement with Sizzle Acquisition Corp, a US special purpose acquisition company. The company will combine their European lithium assets with the US$159m NASDAQ cash box. In consideration for the transaction, EUR will be issued US$750 million worth of ordinary shares in Critical Metals (approximately 73.52 million shares). Upon the closing of the transaction, EUR will be issued US$750 million worth of ordinary shares in Critical Metals, which represents an approximate 80 per cent ownership interest in the combined entity. The valuation of US$750m mentioned in the ASX announcement assumes that EUR shareholders can sell their stock at the SPAC closing price of US$10.20, when in fact EUR shareholders will receive shares issued in the new company, Critical Minerals, and ignores an 80 per cent dilution to the SPAC shareholders who can redeem prior to the agreement. Shares are trading 13.3 per cent higher at 10 cents.

Matador Mining (ASX:MZZ; FSE:MA3) announced this morning a private, non-brokered $3.6 million strategic investment by B2Gold Corp, which represents approximately 9.9 per cent of Matador’s outstanding shares (on an undiluted basis). The proceeds from this strategic investment will be allocated to advancing the company’s exploration program in Newfoundland, Canada. Matador’s Managing Director and CEO Sam Pazuki commented: “We are very pleased to welcome B2Gold’s strategic investment in Matador and look forward to their partnership in advancing our exploration program in Newfoundland. B2Gold’s investment demonstrates their confidence in the gold potential of our extensive tenement package, our greenfields exploration strategy with our systematic approach to discovery and the team we have in place to create long-term shareholder value.” Shares are trading 5.3 per cent higher at 10 cents.

Following the announcement last week that it had been successful in its application for a US Government grant of US$150 million, Novonix (ASX:NVX) has appointed two new directors to its board, Mr Dan Akerson and Mr Ron Edmonds. Mr Akerson previously served as an executive and director for multiple Fortune 100 companies, including as the former Chairman and Chief Executive Officer of General Motors from 2010 to 2014. Mr Edmonds is a highly accomplished finance executive, currently serving as Chief Accounting Officer at Dow, a $55 billion global materials science company. NVX Chairman Admiral Robert Natter commented: “These new directors will join an already stellar and more diverse Board than what we were only a year ago.” Shares are trading 0.7 per cent higher to $2.97.

Arizona Lithium (ASX:AZL) announced today the signing of a Letter of Intent for a strategic partnership with Cemvita Factory to utilise Cemvita’s portable organic lixiviant production plant at the company’s newly established Lithium Research Centre. AZL Managing Director Paul Lloyd commented: “We are very pleased to have signed this partnership with Cemvita. We are focused on our responsibility to our shareholders and to the environment and believe that both of these stakeholders will greatly benefit from the successful implementation of Cemvita’s technology. We aim to be a model for sustainable development and be the pioneer for Lithium producers to use technology like Cemvita’s. We are excited to see the initial results of the partnership in the next 3-6 months, at which time we will assess further partnership potential.” Shares are trading 4.8 per cent higher to 9 cents.

Radiopharm Theranostics (ASX:RAD), a developer of a world-class platform of radiopharmaceutical products for both diagnostic and therapeutic uses, and NorthStar Medical Radioisotopes, LLC, a global innovator in the development, production and commercialisation of radiopharmaceuticals used for therapeutic applications and medical imaging, today announced they have entered into a clinical supply agreement that will see NorthStar supply Radiopharm with Actinium-225. Actinium-225 is key to the development of several radiopharmaceutical products within Radiopharm’s broad portfolio of technologies, with this being the second supply agreement the company has secured for Actinium-225. Actinium-225 will be utilised in drug trials involving targeted alpha therapy in multiple disease areas. Riccardo Canevari, CEO and Managing Director of Radiopharm Theranostics, stated: “It remains a priority for us to secure these key supply agreements, which allow us to continue with our clinical development unimpeded. We are fortunate to lock in another outstanding partner such as NorthStar, who has proven itself as a reliable, high-quality supplier of medical radioisotopes.” Shares are trading 8.3 per cent lower at 11 cents.

Arovella Therapeutics (ASX:ALA), following a strategic review of its development pipeline, will close its Perth-based research and development facility. The company will focus its resources on its invariant natural killer T (iNKT) cell platform and cease expenditure on the OroMist platform. The iNKT cell therapy platform has significant potential to generate allogeneic cell therapies that target both blood cancers and solid tumours. Arovella’s CEO and MD, Dr Michael Baker, commented: “It will enable all staff and resources to be focused on bringing a potential off-the-shelf cell therapy to market that can target both blood cancers and solid tumours.” Shares are trading 10 per cent higher at 3 cents.

Valor Resources (ASX:VAL) has taken further important steps towards unlocking the exploration potential of its 100 per cent-owned Picha Copper Project in Peru after receiving highly encouraging results from an Induced Polarisation survey and ground magnetic survey completed in September 2022. The Picha Project is located in the Moquegua and Puno Departments of southern Peru within a highly prospective porphyry-epithermal copper-gold-silver district that also includes the Berenguela, San Gabriel and San Antonio De Esquilache polymetallic deposits. Valor Executive Chairman George Bauk stated: “The extensive amount of high-quality work completed by our team in Peru over the past eighteen months has now brought this project to the drill-ready status. The results of the September IP survey represent the cherry on the top of what is potentially a fantastic large-scale system.” Shares are trading 16.7 per cent higher at 0.7 of a cent.

Metalicity (ASX:MCT) has completed its maiden exploration program at its newly acquired 100 per cent owned Mt Surprise Lithium Project (EPM 28052) located circa 57km northeast of the town of Mt Surprise, 165 km west of the major centre of Cairns. The company’s exploration team completed extensive fieldwork activities last week and returned with a promising amount of information regarding the prospectivity of the project and potential target areas. Commenting on the expanded drilling program, Metalicity Managing Director Justin Barton said: “We are excited to get on with exploring this highly prospective tenure. We are really encouraged by the initial sample of rock chips that we have collected to date, particularly the extensive copper sulphides of azurite and malachite identified, and eagerly await these results.” Shares are trading 33.3 per cent higher at 0.4 of a cent.

Northern Minerals (ASX:NTU) has signed a rare earths concentrate supply agreement with Iluka Resources (ASX:ILU) covering the initial 8+ year mine life (30.5k tonnes of contained TREO) from Browns Range. The agreements provide for ILU to make a series of investments in NTU, and for NTU to provide ILU with an initial 30.5kt supply of total rare earth oxide (TREO) in concentrate from its Browns Range Project. Northern Minerals has entered into a funding package to raise up to $78.0 million to fund the Browns Range Project (subject to satisfaction or waiver of certain conditions, and receipt of shareholder approvals). Shares are trading 7.3 per cent higher at 4 cents.

MinRex Resources (ASX:MRR) provided an update this morning on its activities during the September 2022 quarter. During the period, MinRex focused on Native Title Heritage surveys over the Marble Bar and Tambourah North Lithium Projects. Geological mapping and rock chip sampling programmes were also completed over the Tambourah North area, along with the commencement of the maiden drilling programme over Sisters Project. Shares are trading unchanged at 4 cents.

Immutep (ASX:IMM; NASDAQ:IMMP), a clinical-stage biotechnology company developing novel LAG-3 immunotherapies for cancer and autoimmune disease, today announced that the Independent Data Monitoring Committee (IDMC) for the randomised, controlled Phase IIb TACTI-003 trial has reviewed initial safety data and recommended continuing the trial with no modifications. Immutep’s CSO and CMO Dr Frédéric Triebel said: “We are very pleased with the IDMC’s recommendation. While early, this represents positive affirmation of the decision to move TACTI-003 into the 1st line setting for head and neck squamous cell carcinoma patients following the robust results and durable responses that efti in combination with pembrolizumab achieved in the 2nd line setting. Notably, the encouraging antitumour activity previously attained spanned the entire spectrum of PD-L1 expression, which is important as the majority of patients have lower PD-L1 levels and are in need of new approaches to fight cancer.” Shares are trading unchanged at 28 cents.

TNG (ASX:TNG) provided an update this morning on its activities during the September 2022 quarter. The summary includes: updated equipment pricing and capital expenditure estimates being prepared by Clough Projects Australia for the Company’s Mount Peake Project were adversely impacted by unprecedented market conditions, with Clough’s work ongoing, incomplete and in progress. Conditional Letters of Support/Interest for up to A$800 million in debt funding received for the Mount Peake Project from Australian, German and Korean Government backed funding sources. Technical reports for the Environmental Impact Assessment are well advanced, with the referral document expected to be submitted to the Northern Territory Environmental Protection Agency (NTEPA) late 2022/early 2023. Planning completed for a brownfields drilling program at the Mount Peake Project expected to be undertaken during the December Quarter, supported by $143,000 in co-funding under the Geophysics & Drilling Collaborations program administered by the Northern Territory Geological Survey. Metso Outotec engaged to assess the use of hydrogen reduction within the TIVAN Process and the integration of Metso Outotec’s Circored technology into the TIVAN flowsheet. The use of hydrogen is a key part of the company’s medium to longer term strategy to reduce its net carbon footprint from processing operations at the Mount Peake Project. The company’s cash position at 30 September 2022 was $9.2 million. Shares are trading down 2.3 per cent at 8 cents.

Altech Chemicals (ASX:ATC & FRA:A3Y) has appointed leading German company Leadec Automation & Engineering GmbH (Leadec) as the lead engineer for the Definitive Feasibility Study in relation to Altech's CERENERGY 100MWh Sodium Alumina Solid State Battery project for grid energy storage, which will be constructed in Saxony, Germany. Altech Managing Director Iggy Tan stated: “We are pleased to appoint Leadec as lead engineer for Altech’s CERENERGY 100MWh project. Leadec has extensive battery manufacturing experience and will play a key part in advancing the Definitive Feasibility Study to commercialise the CERENERGY Sodium Alumina Solid State Batteries.” Shares are trading unchanged at 9 cents.

Qualitas Real Estate Income Fund (ASX:QRI) provided today their September 2022 quarterly update. The announcement stated QRI is well positioned to capture upside from a rising interest rate environment, with a high proportion of variable interest rate loans and a relatively short average loan term. These key factors, combined with the recent widening of credit spreads, is anticipated to benefit the returns generated for QRI investors. QRI maintains a strong track record of delivering attractive monthly returns and no loan impairments to date. The Manager continues to see a dynamic CRE debt market delivering a strong pipeline of opportunities for QRI. The Manager also remains vigilant with respect to asset management and to their approach to managing risk across the portfolio.
Shares are trading unchanged at $1.47.

Commodities and the dollar

Gold is trading at US$1651.03 an ounce.
Iron ore is 3.8 per cent lower at US$89.50 a tonne.
Iron ore futures are pointing to a rise of 0.29 per cent.
One Australian dollar is buying 63.82 US cents.

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