ACCC investigates Qube, UBS rates Super Retail as buy, ASX trading 0.7% higher at noon

Market Reports

by Melissa Darmawan

The Australian sharemarket is off to a positive start, bouncing back from yesterday’s fall by 0.7 per cent or 49.7 points higher at 7,256 at noon. The SPI futures are pointing to a rise of 44 points.

The gains are mostly across the board with energy stocks taking a breather as the only outlier, down 1 per cent on an unexpected lift in U.S. crude supply. Technology stocks are fired up as the best performer by 2.4 per cent, following lead from Wall St as the Nasdaq outperformed the major indexes for its second day. Communication services, property, and healthcare are advancing by 0.9 per cent.

Qube slapped by the ACCC

Logistics service provider Qube (ASX:QUB) has been slapped with an investigation by the competition watchdog. The Australian Competition and Consumer Commission has launched an investigation into the company’s acquisition of the Newcastle Agri Terminal. The deal went ahead before the watchdog gave its tick of approval on potential competition concerns.

Qube Logistics owns and operates up-country grain storage sites at Narromine and Coonamble, and supplies rail haulage in NSW. It also owns and operates the Quattro bulk grain terminal in Port Kembla, NSW. Newcastle Agri Terminal is a bulk grain terminal at the Port of Newcastle.

The terminal is one of two bulk grain terminals located at the Port of Newcastle servicing export grain from farms and storage in northern NSW. Qube said that the spending spree boosted its “ability to provide reliable export logistics solutions”.

Shares are trading 0.2 per cent lower after dropping 0.3 per cent on market open at $3.28.

Sezzle & Collins Food gets tap on shoulder from offshore giants

Wall St-listed Target tapped buy-now pay-later Sezzle (ASX:SZL) on the shoulder to partner with the retail giant ahead of the holiday season. Sezzle will provide shoppers in the U.S the ability to split purchases into four interest-free payments over six weeks. Joining the retail giant, is rival Affirm listed on the Nasdaq. Shares in Sezzle (ASX:SZL) are on the move, soaring 7.3 per cent at $5.29.

Restaurant group Collins Foods (ASX:CKF) has inked a deal to run the franchise business of KFC in the Netherlands. Under the deal, Collins Foods is slated to “develop, manage, market, support and operate the KFC business in the Netherlands, including the introduction, management and oversight of existing and future franchisees”. Shares are soaring 6.1 per cent at $12.71.

Wesfarmers & Super Retail Group shines

Owner of Bunnings and Officeworks Wesfarmers (ASX:WES) jumped on the 19.3 per cent stake in Priceline operator API (ASX:API) in an effort to push takeover talks forward. The retail giant agreed to acquire its stake in API, which is owned by Washington H. Soul Pattinson’s (ASX:SOL) despite Sigma’s (ASX:SIG) bid who are behind the Amcal and Guardian brands. Wesfarmers are trading 0.9 per cent higher, Soul Patts are trading 0.5 per cent lower while Sigma are trading 1.2 per cent higher.

Super Retail Group (ASX:SUL) have sped up their performance today, trading 7.3 per cent higher at $12.33 after UBS upgraded the company to a buy. Check out broker moves to find out what it’s all about.

Resource stocks showing signs of weakness while Afterpay leads

Energy stocks are showing signs of weakness with Santos (ASX:STO) and Oil Search (ASX:OSH) both down by over 1.5 per cent. Rio Tinto (ASX:RIO) is up 0.3 per cent while BHP (ASX:BHP) is trading 0.3 per cent lower.

A couple of stocks that are taking the spotlight are Afterpay (ASX:APT) trading 2.8 per cent higher, Sonic Healthcare (ASX:SHL) adding 2.1 per cent, NAB (ASX:NAB) rising 1.2 per cent, and Macquarie (ASX:MQG) up 1.6 per cent.

Elsewhere, Japan’s Nikkei is off to a firmer start, trading 0.9 per cent higher after declining for their eight straight day. Let’s see what the Hang Seng does when they open in an hour. Shanghai Composite is pencilled it to resume trading on Friday.

Local economic news

Australia's residential property market has notched a new record of $9.1 trillion, a surge of 14 per cent from five months ago when it peaked at $8 trillion. The spike followed the recent capital gains across the nation on a hot property market putting housing values around 28.2 per cent higher than the estimated aggregate value of superannuation, the ASX, and commercial real estate according to CoreLogic.

The Australian Industry Group Australian performance of services index rose slightly by 0.1 points to 45.7 in September, marking a second month in contraction following stronger results earlier in the year. Any reading below 50 points indicates contraction while anything above, signals growth.

Payroll jobs fell by 0.7 per cent in the fortnight to 11 September following a larger fall of 1.5 per cent in the previous fortnight, according the Australian Bureau of Statistics.

Broker moves

UBS upgrades Super Retail Group (ASX:SUL) as a buy with a price target of $13.50. The moves followed review of the economic landscape pointing to a lift in consumer retail spending.

The broker believes that the owner of Supercheap Auto are slated to be the beneficiaries of the post lockdown math and therefore, upgrades its EPS forecast and rating.

Adding to the bullish outlook, the share price has declined by over 11 per cent since their financial year 2021 result where the broker sees further upside. The target price is lifted to $13.50 from $13.20.

Shares in Super Retail Group (ASX:SUL) are trading 7.3 per cent higher at $12.33

Best & worst performers

The best-performing sector is Information Technology, up 2.4 per cent. The worst-performing sector is Energy, down 1 per cent.

The best-performing stock in the S&P/ASX 200 is Super Retail Group (ASX:SUL), trading 7.3 per cent higher at $12.33. It is followed by shares in Collins Foods (ASX:CKF) and HUB24 (ASX:HUB).

The worst-performing stock in the S&P/ASX 200 is Whitehaven Coal (ASX:WHC), trading 6.1 per cent lower at $3.37. It is followed by shares in Sealink Travel Group (ASX:SLK) and The Star Ent Group (ASX:SGR).

Commodities & the dollar

Gold is trading at US$1763.50 an ounce.
One Australian dollar is buying 72.84 US cents.
Iron ore is 0.1 per cent higher at US$116.71 a ton.

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