Bega falls on profit warning, Centuria snaps up 38 facilities, Magellan recoups: ASX up 0.2% at noon

Market Reports

by Melissa Darmawan

The Australian sharemarket lived up to the SPI futures rallying at the open, touching as high as 0.4 per cent following a two-day rally on Wall St. Volumes are on the lighter side as we approach year-end with the S&P 500 within striking distance of record highs.

The Nasdaq was the outperformer out of the major indexes with technology shares galloping after investors put aside their Omicron fears ahead of Christmas. However, on the local bourse, technology stocks defied the outperformance over in stateside leading the declines.

Afterpay (ASX:APT) is trading 2.5 per cent lower while Wisetech (ASX:WTC) is down by 2 per cent after RealWise Holdings, a company controlled by chief executive, Richard White entered into a deal to sell of 4.3 million Wisetech shares. Mr White reached an equity swap with Macquarie Bank yesterday to facilitate the sell-down that will take about six months to complete starting next year.

Meanwhile, real estate sector is the best performing sector with property titan Centuria (ASX:CNI) surging over 3 per cent at $3.46 pushing the sector higher. The company revealed a $466 million spend on acquisitions in the past two months in Australia and New Zealand. Adding to their portfolio are an additional 38 new facilities into two open ended funds, Aussie healthcare property, and New Zealand healthcare property fund.

The worst performer of the session so far is Bega Cheese (ASX:BGA) with its share price melting nearly 12 per cent lower at $4.95. As covered in Stocks of the Hour here, the cheese maker said that short term impacts from the pandemic amid a highly competitive milk-buying landscape are expected to impact financial year 2022 earnings. The company is forecasting normalised EBITDA in the range of $195 million to $215 million versus $142 million in the previous financial year.

Shares in Magellan (ASX:MFG) are trading over 2.7 per cent higher at $20.47 after Hamish Douglass, chief investment officer and chairman reassured investors after Monday’s 33 per cent tumble in the company’s share price following the loss of its biggest investment mandate. The mandate with St James’ Place made up about 12 per cent of annual group revenue. The video interview comes after MorningStar analysts released a note saying that “these near-term headwinds are bumps in the road, not nails in the coffin. Its investing calibre and upside from growing distribution remain intact” amid a number of brokers downgrading the company’s rating, and target price.

Traders are also digesting the climb in Covid-19 cases with NSW recording 5715 new cases in the 24 hours to 8pm last night and one death. Covid-19 medical players Sonic Healthcare (ASX:SHC), Healius (ASX:HLS), and Australian Clinical Labs (ASX:ACL) are extending its rally as testing volumes surge ahead of Christmas across the nation.

Across the heavyweights, miners are trading lower as the price of iron ore dipped with futures pointing to a further fall. Fortescue Metals (ASX:FMG) are leading the decline by 1.4 per cent, followed by BHP (ASX:BHP) down 0.8 per cent, while Rio Tinto (ASX:RIO) down by a hairline of 0.02 per cent.

Gold miners are taking a leap with Evolution Mining (ASX:EVN) surging 3.4 per cent after the miner pulled out from its gold-focused joint venture with Enterprise Metals after results from 30 months of exploration "were not sufficient" to continue. The four-year deal started in June 2019 and earmarked Evolution to earn an 80 per cent interest in the project by spending $6 million on exploration. Newcrest Mining (ASX:NCM), and Northern Star (ASX:NST) are both up shy of 1 per cent.

Energy players are seeing marginal gains helped by the small boost in the price of crude. Woodside (ASX:WPL) is up 0.4 per cent while shares in Santos (ASX:STO) are trading 0.3 per cent higher. 

Meanwhile, after we heard of news that CEO Elon Musk sold 10 per cent of his stake in Tesla, Aussie-listed Syrah Resources (ASX:SYR) has executed an offtake deal with Tesla to supply an ingredient that makes up the EV battery called natural graphite anode. The ingredient will come from its production facility in Vidalia, USA. Shares are powering up 23 per cent higher at $1.63.
 
Elsewhere, major banks are rallying with Commonwealth Bank (ASX:CBA) leading the pack adding 0.6 per cent, followed by ANZ (ASX:ANZ) and National Australia Bank (ASX:NAB) both adding 0.3 per cent, while Westpac (ASX:WBC) is trading 0.1 per cent higher. Macquarie (ASX:MQG) is up 0.4 per cent.

At noon, the S&P/ASX 200 is 0.2 per cent or 15.8 points higher at 7,381. The SPI futures are pointing to a rise of 15 points.

Best and worst performers

The best-performing sector is Real Estate Investment Trusts, up 0.6 per cent. The worst-performing sector is Information Technology, down 1.1 per cent.

The best-performing stock in the S&P/ASX 200 is Regis Resources (ASX:RRL) trading 3.4 per cent higher at $1.91, followed by shares in Deterra (ASX:DRR), and Evolution Mining (ASX:EVN).

The worst-performing stock in the S&P/ASX 200 is Bega Cheese (ASX:BGA) trading 12.3 per cent lower at $4.93, followed by shares in Afterpay (ASX:APT), and WiseTech Global (ASX:WTC).

Commodities and the dollar

Gold is trading at US$1803.85 an ounce.
Iron ore is 1.0 per cent lower at US$122.60 a ton.
Iron ore futures are pointing to a fall of 2.5 per cent.
One Australian dollar is buying 72.17 US cents.

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