RBA Hikes Rates as ASX Wobbles 

What made the news today?

• RBA strikes fear in the market.

• Nuix wins court case.

• Macquarie posts strong results as banking sector continues surge.

• Transurban CEO departs.

It was all about the RBA as the market took a tumble post the expected rate raise this afternoon with the ASX200 ending the trading day lower by 34.90 points, or 0.46%, to close 7,504.10. The hawkish comments made by the RBA after raising the cash rate by 25 basis points was the major driver of the fall which was up as high as 0.1% at midday.

There were nine of the eleven sectors which fell today with the Real Estate sector continuing its drop this week, falling by 1.59% followed by the Health Care (-1.41%) sector which continues to lag the market. Energy was the biggest winner for the day, increasing by 0.48%.

ARB Corporation and Lifestyle Communities had the worst performance among the stocks in this index, falling 12.39% and 5.73% respectively.

Quick Singles

• Transurban (ASX:TCL) fell 0.57% to $13.95 per share after the company posted first-half earnings today including an improved distribution guidance. Transurban also announced that CEO Scott Charlton would be leaving his position at the end of the calendar year.

• Pushpay Holdings Ltd (ASX: PPH) share price increased by 0.9% to $1.19 after the company reaffirmed and narrowed its fiscal year 2023 guidance.

• Macquarie Group Ltd (ASX: MQG) share price increased 0.7% to $190.33 after the publishing of a third-quarter report.

Economy

In December 2022, Australia's trade surplus decreased from November's five-month high of AUD 13.47 billion to AUD 12.23 billion, below market expectations of a AUD 12.5 billion increase.

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Top Story

RBA Hikes Interest Rates as Inflation Soars to 1990 Highs

The Reserve Bank of Australia (RBA) increased interest rates by 25 basis points on Tuesday, bringing the official cash rate to 3.25 percent. This decision was in response to the Consumer Price Index (CPI) inflation for the year ending December, which reached a staggering 7.8% - the highest level since 1990.

RBA Governor Philip Lowe warned of further interest rate hikes to come, causing the market to drop 0.5% almost instantly. Lowe attributed the high inflation to both global and local factors, stating that robust local demand is exacerbating inflationary pressures in various economic sectors.

Despite this, the central estimate predicts that CPI inflation will decrease to 4.4% this year and continue to decrease to 3% by mid-2025. Lowe emphasized the importance of maintaining well-anchored medium-term inflation expectations.

This move by the RBA highlights the ongoing battle to control inflation in the country. 

Movers and Shakers

✅Biggest Winners 

Nuix (ASX: NXL) share price increased by 43.7% to $1.30 after a court ruled that the technology company would not have to pay former CEO Eddie Sheehy $183 million. Sheehy had claimed that he was entitled to a stock split and could cash out during the company's billion-dollar IPO in 2020. However, Justice John Halley dismissed the claim, saying that it had already been dealt with in a 2019 Supreme Court decision. Technology investors had been wary of the company's shares for the past year while waiting for the decision, but the ruling boosted the stock to $1.28, capping off a 96% lift since January 1.

Medibank Private (ASX: MPL) shares increased by 2% to $3.03. after the private health insurer stated this morning that it will hike its prices by an average of 2.96 percent beginning in April. This is the smallest growth in the past 22 years. 

❌ Biggest Losers 

Cettire Ltd (ASX: CTT) share price dropped 6.6% to $1.70 despite reporting positive first-half earnings today.  In the last half, Cettire had 313,982 active clients, an increase of 50%, and 56% of its gross revenue came from repeat consumers. Additionally, the average order value increased 7% to $759. Cost optimisation strategies decreased shipping costs, while marketing expenditure efficiency reduced paid acquisition costs to 7.9% of sales revenue.

Centuria Capital Group (ASX: CNI) share price has decreased by 5.6% to $1.86. after the release of the property company's half-year results. Despite Centuria Capital seeing a significant increase in its top line, the company's operating profit remained the same from year to year.

Small-Cap of the Day

EV Resources Secures $25 Million Investment from Sapphire Global Energy Fund

EV Resources (ASX:EVR) announced a $25 million investment commitment from Sapphire Global Energy Fund, which will result in a 53.33 percent increase in the company's share price to $0.02. The funding will support the acquisition of properties and provide working capital to expand EV Resources' current portfolio, which includes but is not limited to supporting drilling campaigns and working towards mineral resource estimations in compliance with JORC standards.

EV Resources Limited, together with its subsidiaries, engages in the exploration and development of mineral properties. The company explores for gold, silver, copper, tin, lead, tungsten, zinc, lithium/borate, molybdenum, antimony, and other deposits.

Executive Director of EV Resources, Navin Sidhu, described the funding pledge as a significant milestone that will allow the company to grow dramatically in the coming year. "Sapphire recognizes the potential we have and is tremendously supportive of the company, thus providing us with a highly competitive and spacious location," he said.

The investment comes in the form of an equity drawdown facility with the option to drawdown on the facility for 60 months starting on March 1, 2023 or an earlier date agreed upon by both parties. The company plans to use the proceeds towards acquiring projects and for working capital to develop its portfolio, including drilling campaigns and funding towards JORC-compliant mineral resource estimates.

The investment highlights the potential of the company's growth plans and will help EV Resources towards becoming a strategically diversified explorer and developer of precious and green energy metals. According to the agreement, a security of 35 million shares will be issued prior to the first drawdown which can be used to offset any drawdown.

Sidhu said the flexibility of the investment will help better manage the company's funding needs, reduce dilution, and not be at the mercy of the markets. The funding boost is a significant milestone that will enable the company to grow significantly in the next 12 months.

Outlook

10th February 

• US Initial Job Claims (est. 194k)

That's it from the team at ASX-News today. We hope you enjoyed our EOD wrap-up. Good night and happy investing!