Good Evening,

Welcome to the ASX News Daily Recap.

Lost track of what happened on the market today?

Don’t stress. We’re here to catch you up.

Here’s a sample of what you may have missed:

1. 💰 The Start of Magellan's Turnaround Story?

2. 📈 Broker Ratings: Sonic, Inghams & More

3. 🚘 AMA's Negotiation Dance with Suncorp

4. 🚫 NY Officials Swipe Left on TikTok

5. ⤵️ Bitcoins Space X Slip

The Recap

Magellan Climbs as ASX
Finishes Marginally Higher

All indicators pointed to another down day on the market. However, the ASX200 eeked the slightest of gains, closing 0.03% or 2.1 pts higher Overnight markets in the U.S. and Europe were down, with China continuing to dominate global headlines.

Magellan Financial Group was the big story today; the maligned global fund manager has been in the investor dog house the last 12 months amidst fund outflows and management re-shuffling. Today, the company surprised the market with a special dividend and a commitment to reduce operating expenses by at least 17% in FY24. More on that later →

Hong Kong and Japan markets declined on Friday due to concerns over China and prolonged higher interest rates. Chinese state-owned property developers warned of widespread losses, fueling fears that the housing crisis is expanding from the private sector to companies with government backing.

China's second-largest property developer, Evergrande Group, filed for bankruptcy protection in New York on Thursday after defaulting on its debt in 2021. The property crisis in China continues to have ripple effects on the economy.

REITS (+1.68%) were in the green again, thanks to Goodman Group (7.2%), marking two consecutive bumper days as several brokers upped their target price. Utilities (+1.16%) and Materials (+0.80%) also finished higher. Telco (-1.89%) fell the most of the sectors that finished in the red.

Bitcoin and Ethereum dropped suddenly today, the Wall Street Journal reported that Space X had sold all its Bitcoin. The Bitcoin price fell as low as $25,392.05 having traded between $28,000 - $31,000 over the last few weeks. Ethereum also lost 6% to $1,685.

Next week is the busiest week on the earnings calendar; we kick off Monday with A2 Milk, Adairs, Altium, Ampol, Bluescope Steel, Breville, Charter Hall Group, Chorus, IAG Insurance, McGrath, McPherson’s, NIB Holdings, oOH Media, Reliance Worldwide all reporting.

ASX200 Stock Snapshot

Wall Street

Markets continue to fall as investors are concerned that monetary policymakers may not be done raising interest rates. The S&P500 (-0.77%) finished lower, while the NASDAQ (-1.17%) posted its worst three-day stretch since February. Wall Street’s fear gauge, the Cboe Volatility Index or VIX, touched 18 for the first time in seven sessions.

The yield on 10-year Treasuries advanced two basis points to 4.27%, while West Texas Intermediate crude fell 0.5% to $79.97 a barrel overnight, heading for its first weekly loss since June.

Walmart stock traded nearly 2% lower on Thursday despite relatively upbeat earnings. The supermarket retailer reported an increase in revenue of 5.7% to $161.6 billion, with an EPS increase of 4% to $1.84 - above consensus estimates.

Cava reported same-store sales bumped 18.2% Y/Y in its first earnings report since the Mediterranean chain’s IPO in June.

Economic News

• U.S. unemployment benefits dropped by 11,000 to 239,000 for the week ending August 12, down from 248,000 the previous week.

Sponsor

Become Smarter In
AI, Business & Tech

New business ideas, productivity life hacks, future technologies, and more – all in a 5-minute newsletter.

Join over 60,000 visionaries. It’s completely FREE.

Subscribe Here

Markets

Index & Commodity Prices

Bond Prices

ASX By Sector

ETF Watch

Quick Singles

🪃 Local News

• Coles Group have advised of cost blowouts at its Victoria ($70m) and NSW ($50m) customer fulfilment centres, which the company is developing with UK retail group Ocado. Total expenditure is now expected to be approximately $400 million, of which 55% has been incurred at the end of FY23.

• Sezzles listing on the NASDAQ never got off the ground, with the stock exchange halting trade of the BNPL provider due to an inadequate supply of publicly available common stock to make a market and facilitate proper trading.

• Fonterra has cut its forecast milk price for the second time in two weeks from $6.25 -$7.75 per kilogram of milk solids (kgMS) with a midpoint of $7 per kgMS, to $6.00-$7.50 per kgMS with a midpoint of $6.75 per kgMS.

• Piedmont Lithium announced it would exercise its option to acquire a further 22.5% stake in Atlantic Lithiums (ASX:A11) Ghana-based Ewoyaa Lithium project. Piedmont will now earn a 50% equity interest in the project.

• AMA Group announced that it had finalised its pricing agreement with Suncorp Insurance for its Capital S.M.A.R.T. business under the Motor Repair Services Agreement. The revised agreement resulted in a lower FY24 guidance of $86 million - $96 million normalised, post-AASB 16 EBITDA. It is anticipated that the remaining $58 million balance of the

  goodwill of Capital S.M.A.R.T. will be fully impaired.

🌏 Around The Globe

• Google has reportedly partnered with Scale AI to build a bot that offers life advice, tutoring, and planning help.

• Arm Ltd. has filled out the roster of underwriters for its initial public offering, with 28 banks in all on the deal.

• To address security concerns, New York City has joined numerous U.S. cities and states in prohibiting using TikTok on government-owned devices. 

• A recent study suggests that Novo Nordisk's popular weight loss injection, Wegovy, can potentially prevent approximately 1.5 million cardiovascular events, such as heart attacks and strokes, in the U.S over 10 years.

• Officials from seven US states wrote to the FTC urging them to block Kroger's $24.6bn takeover of Albertsons, citing concerns that the combined entity would own almost a quarter of the US food retail market.

• California approved expanding driverless car services in San Francisco, allowing companies to offer paid rides to anyone, anywhere. Previously, these rides were only available to a select few with access and were restricted to certain areas. Additionally, self-driving vehicle operators were limited in charging fares in certain parts of the city.

₿ Crypto Corner

• Coinbase has launched its crypto services in Canada with a free trial offer for Canadian citizens. The company hopes to expand its presence and make its services more accessible to Canadian investors. The new subscription service, Coinbase One, is the first to be introduced.

• OpenAI has acquired Global Illumination, a team of developers specialising in open-source technology for online game production. In a statement released on Wednesday, OpenAI confirmed that the entire team will now be working on various projects, primarily focusing on ChatGPT.

• A technical issue with the bridge contract in Shibarium's layer-2 network has caused approximately 7 million dollars worth of Ethereum to become trapped, hindering the network's highly anticipated launch.

Movers and Shakers

✅ Biggest Gainers

• Abacus Group (ABG) reported a Funds From Operations (FFO) increase of 8.8% in FY22, underpinned by growth in the group’s investments in its core commercial and self-storage sectors. The Commercial portfolio delivered 13% growth in net rental income. Statutory profits fell by 95.1% to $ 25.5 million due to a $248 million property write-down of its office and retail assets by more than 10%. Shares ended the day up 10.2% to $1.19.

• PWR Holdings (PWH) rose 8.5% after reporting FY23 earnings after yesterday's market close. PWR reported a 4.4% lift in Net Profit and a 17.1% increase in revenue. The company said it grew third-party sales from the U.K. and Australia by 17.6% and 16.7%, respectively. The company declared a fully franked final dividend of 8.90 cents per share, taking the full-year dividend to 12.50 cents per share, an increase of 4.2% on last year’s full-year dividend.

🔻Biggest Fallers

• Centuria Capital (CNI) reported a full-year statutory profit of $105.9 million in FY23, turning around from the previous year’s $37.9 million loss. Operating NPAT was $115.6m and was in line with last year. The share price fell by xx% after the property funds manager forecasted that FY24 operating EPS would be between 11.5 cps & 12.0 cps, with the drop due to lower performance fees and development profits.

• Imugene (IMU) announced it raised $35 million in capital from investors at $0.084/share. Additionally, Imugene is launching an SPP to raise about $30 million more for eligible shareholders at a rate of $0.084/share or a 2.5% discount to the 5-day Volume Weight Average Price. Participants will get a free option for each share, with these options set to be listed on the ASX at an exercise price of $0.118, expiring on August 31 2026. The funds will support Imugene's acquisition of the Azer-cel Allogeneic CD19 Car-T license and related trial expenses. Shares fell 16% to $0.079

Earnings

Company Earnings Summary

A quick snapshot of the other companies who reported earnings

• Latitude Finance reported a cash profit fall of 88% to $7 million and also scrapped its dividend in today’s first-half earnings report. Latitude also booked $76 million of pre-tax costs and provisions due to a cyber breach discovered in March.

• Spark New Zealand reported bumper profits thanks to the sale of its Towerco business which bought in an additional $529 million in FY earnings. Bottom-line earnings rose by 49.7% to $1.1 billion. Excluding the one-off sale, revenues increased 5.1 per cent to $3.9 billion, and profit jumped 5.6 per cent to $433 million.

Deep Dive

Magellan's FY23 Results: A Dive into Profits and Management Overhaul

Global equities manager Magellan Financial Group reported FY23 earnings today, which included a surprise special dividend and a commitment to lowering costs next year, pleasing investors. It has been a challenging year for the company, with large outflows and management changes.

The decrease in FUM and Net Profit was no surprise to investors, with the share price up xx% to $xx. MFG shares have been on a steady decline, down 34% in the last 12 months before today’s update

Financial Highlights:

• Net Profit: Down 52% to $182.6 million.

• Revenue: Decreased by 22% to $431.7 million.

• FUM (Funds Under Management): Dropped from $61.3 billion to $39.7 billion.

• Dividend: A final dividend of 39.8¢ and a special dividend of 30¢, bringing the full-year dividends to $1.167.

• FM Business Operating Expense - $121.3 million

• EPS (Earnings Per Share): Fell to $1, compared to $2.07 in FY22.

• Cash on Hand: As of June 30, the company had $373.4 million.

The company's flagship Magellan Global Fund reported a return of 20.6% over the year, net of fees. This fell short of the benchmark, the MSCI All-World Index, which returned 22.4%.

Magellan's Australian equities fund returned 18.1% over the year, outperforming its benchmark, the S&P/ASX 200 Accumulation Index, which returned 14.8%.

There has been a leadership shuffle at Megallan; Andrew Formica has been appointed as the new non-executive chairman, replacing Hamish McLennan, who will now serve as the deputy chairman. The company has also seen the retirement of Robert Fraser from the board, with Deborah Page joining in his place.

New chairman, Andrew Formica, hinted at potential mergers and acquisitions as part of the company's strategy to rejuvenate its fortunes.

In terms of outlook, Magellan said its FY24 Funds Management business operating expense will be $95-$100 million. The company plans to implement programs to deliver year-on-year improvement in cost and operational efficiency across the business.

A Little Extra

📉 Going Down?

Top 10 shorted stocks on the ASX - as of August 14

Elders shot into the Top 10, increasing from 3.60% on June 30 to 7.25% on August 14. Elders’ share price fell from $7.54 to $7.08 on August 14. Elders operates on an October - September financial year, last updating the market on its half-year result ending March.

1. Core Lithium (CXO) - 10.74%

2. Flight Centre (FLT) - 10.20%

3. IDP Education (IEL) - 9.37%

4. Syrah Resources (SYR) - 8.25%

5. JB Hi-Fi (JBH) - 8.12%

6. Pilbara Resources (PLS) - 7.91%

7. Brainchip (BRN) - 7.56%

8. Select Harvests (SHV) - 7.49%

9. Elders Limited (ELD) - 7.25%

10. Lake Resources (LKE) - 7.05%

📊Broker Ratings

What do the brokers have to say?

• Bapcor (BAP) - Downgraded to Neutral from Buy (UBS)

• Beacon Lighting (BLX) - Upgraded to Buy from Neutral (Citi)

• Evolution Mining (EVN) - Upgraded to Hold from Lighten (Ord Minnett)

• Inghams Group (ING) - Upgraded to Buy from Hold Bell Potter

• Inghams Group (ING) - Downgraded to Neutral from Outperform Macquarie

• IPH (IPH) Downgraded to Hold from Add (Morgans)

• Rio Tinto (RIO) - Upgraded to Add from Hold (Morgans)

• Sonic Healthcare (SHL) - Upgraded to Neutral from Underperform (Macquarie)

• Sonic Healthcare (SHL) - Upgraded to Buy from Sell (UBS)

• Telstra Group (TLS) - Downgraded to Hold from Add (Morgans)

💲Dividends

Companies trading ex-dividend today

1. Ansell (ANN) - $0.3956

2. Lendlease Group (LLC) - $0.111

3. GWA Group (GWA) - $0.07

4. Newcrest Mining (NCM) - $0.3056

📅 Economic Calendar

Data to keep an eye on this week

DISCLAIMER: None of the information provided in this newsletter should be constituted as financial advice. This newsletter is strictly for educational purposes only. It should not be taken as investment advice or a solicitation to buy or sell assets or make financial decisions. Please do your research.