Regional Express Group (ASX:REX) launch domestic operations plans: Aus shares close 1.5% lower

Market Reports

by Ortenzia Borre

The Australian share market was down at the open and continued to struggle, closing 1.5 per cent down at the end of trade, with all sectors in the red.

Travel shares took a hit today apart from Regional Express Group (ASX:REX) upon the announcement of their domestic travel plans.

The total number of global COVID-19 cases has surpassed 10 million, with the death toll reaching 500 000. This comes as Victoria records 75 new cases overnight, one of the highest increases on record for the state.

The S&P/ASX200 index

At the closing bell the S&P/ASX 200 index closed 89 points lower to finish at 5,815.

Futures market are proving to be softer

Dow futures are suggesting a fall of 69 points.
S&P 500 futures are eyeing a dip of 8 points.
The Nasdaq futures are eyeing a fall of 50 points.
And the ASX200 futures are eyeing a 84 point fall tomorrow morning.

Local economic news

Australians who had reduced spending on items including eating out and recreational activities due to COVID-19 are expecting this to increase when restrictions ease, according to latest data from the Australian Bureau of Statistics (ABS).

However, the sixth Household Impacts of COVID-19 Survey found that people who had spent less on items including household furnishings, clothing and footwear expected this to remain at lower levels.

ABS head of Household Surveys, Michelle Marquardt, said: “This survey showed us a mixed picture of what Australians plan to spend their money on once restrictions ease.

Australians reported an 87 per cent decrease in spending on eating out, 85 per cent on child care and 79 per cent on recreation or leisure.

Michelle Marquardt added the majority expected to increase their spending on recreational activities, eating out, private transport and personal care.

Broker moves

Citi has downgraded Australian Pharmaceutical Industries (ASX:API) to Neutral from a Buy. The broker believes the company is most likely to benefit from the new Community Pharmacy Agreement (CPA), in play from July 1 for 5 years. The industry will receive additional funding of at least $92m, and most of it should flow through to earnings. Shares in Australian Pharmaceutical Industries (ASX:API) closed 1.3 per cent lower at $1.12.

Company news

Regional Express Group’s (ASX:REX) board has approved plans for domestic operations. The airline will launch an initiative to raise a minimum of $30 Million, which the Board now believes will be all that is needed for the launch of limited domestic operations.Rex will commence preparations for the operation of an initial fleet of five to ten narrow-body jet aircraft to be based out of Sydney and/or Melbourne to service the golden triangle (Sydney- Melbourne-Brisbane). The targeted start date for domestic operations is 1 March 2021. Rex’s Deputy Chairman, John Sharp, said, “Rex has the biggest regional network in Australia and we are the only carrier in Australia that has been able to successfully navigate the turmoil and shocks over the last two decades with uninterrupted operational profits since 2003.” Shares in Regional Express Group (ASX:REX) closed 17 per cent higher at $1.10.

Looking at some more headlines:

SeaLink Travel Group’s (ASX:SLK) RiverCity Ferries awarded Brisbane contract

Servcorp (ASX:SRV) will close of 12 offices in the United States of America (USA) due to restructuring.

Ampol (ASX:ALD) has officially appointed their current Interim Chief Executive Officer Matthew Halliday to Managing Director and Chief Executive Officer.

Best and worst performers of the day

The sector with the fewest losses was Consumer Staples, shedding 0.2 per cent, while the worst performing sector was REITs, losing 2.9 per cent.

The best performing stock in the S&P/ASX 200 was Fisher & Paykel Healthcare (ASX:FPH), rising 6.9 per cent to close at $31.67. Shares in Avita Therapeutics (ASX:AVH) and Evolution Mining (ASX:EVN) followed.

The worst performing stock in the S&P/ASX 200 was Jumbo Interactive (ASX:JIN), dropping 13.2 per cent to close at $9.90 cents. Shares in NRW Holdings (ASX:NWH) and Wisetech Global (ASX:WTC) followed lower.

Asian markets

All lower: Japan’s Nikkei has lost 2.4 per cent, Hong Kong’s Hang Seng lost 1.4 per cent and the Shanghai Composite is 0.7 per cent down.

Commodities and the dollar

Gold is trading at US$1,773 an ounce.
The iron ore price is flat at $103.34.
Iron ore futures are pointing to a fall of 3.2 per cent.
Light crude is US$0.94 down at US$37.71 a barrel.
One Australian dollar is buying 68.82 US cents.


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