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. 🏡 Aussie's $3 Billion Housing Investment

2. 🏞 Transurban's 400% Profit Jump

3. 🍾 Endeavour's Boozy Business

4. 🧥 U.S. Retail's Unexpected Rise

5. 🏬 REITs' Reality Check

The Recap

Transurban's Traffic Nears Pre-Pandemic Levels

The ASX200 traded in red all day as a sell-off in overseas markets sent the index lower by 109.8 pts to 1.5% to 7,195.2. A slowdown in Chinese economic growth and a highly debted property market continue to weigh markets down. U.S. and European markets also finished the day lower.

No sector was spared, with all 11 trading in the red. The Tech sector released some steam from what’s been a strong 2023, falling by 2.93%. Materials dropped by 2.63%, with BHP, Rio and Fortescue all lower.

Transurban was one of the bigger companies to report today, posting a 400%+ increase in profit as traffic gets closer to pre-pandemic levels.

The national cabinet met in Brisbane this afternoon to agree on a $3 billion housing deal to build 1.25 million new homes within three years - 200,000 more than the previous agreement. Cabinet also decided to phase in minimum quality standards for rental properties, with a nationally consistent policy to implement a requirement for genuine reasonable grounds for eviction.

ASX200 Stock Snapshot

Wall Street

The U.S. market fell overnight as fears over the global economy, mainly from China, continue to worry markets. Nearly every sector was in the red. Parts of the Housing Building sector bucked the trend, likely thanks to yesterday’s disclosure of investment in the industry from Berkshire Hathaway. D.R Horton (+2.89%) and Amgen (+1.93%) were two stocks that rose. The S&P500 finished 1.16% lower, while the NASDAQ was 1.14% lower.

The Banking Sector felt the brunt of the pain, as rating agency Fitch warned of sweeping downgrades on the industry, including giants like JPMorgan Chase. Last week, Moodys downgraded to SME banks and warned of cuts for another 17 lenders.

The U.S. 10-year bond yield rose during the trading session, reaching heights not seen since in October-22.

Home Depot beat quarterly earnings and revenues estimates but reiterated its full-year guidance, which was lowered last quarter. The company said consumers are still holding back on discretionary purchases. Sales for Q2 were 2% lower than the same qtr. the previous year. The stock price rose 0.66% for the day.

Economic News

• U.S. Retail Sales rose 0.7% in July from June, beating forecasts of 0.4% with increases in various sales categories, including sporting goods stores, clothing outlets and restaurants and bars.

• The Reserve Bank of New Zealand (RBNZ) has left the official cash rate of 5.5% unchanged. Current annual inflation across the ditch is 6.0%, but the RBNZ expects this fall in the coming months.

• UK growth of regular pay (excl. bonus) rose 7.8% in Q2, the highest annual growth rate since comparable records began in 2001. Unemployment rose by 0.3% during the quarter to 4.2%.

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Markets

Index & Commodity Prices

Bond Prices

ASX By Sector

ETF Watch

Earnings

Company Earnings Summary

A quick snapshot of the companies who reported earnings today

• Endeavour Group - reported growth in both sales and profit stating, “Retail sales momentum is returning after a period of rebalancing post-pandemic.” Sales in the hotel unit climbed 4.6% in the first six weeks of FY24 after double-digit sales growth in FY23.

• Vicinity Centres - saw statutory profits slump after $338.4 million in property write-downs on its portfolio. Funds From Operations did increase by 14.5 % Y/Y to $648 million.

• Mirvac Group - saw its earnings drop in what the company called a “challenging economic backdrop”, with property developer also warning that earnings would fall further.

• Netwealth fell slightly after reporting $18.7 billion of fund inflows during FY23 to take total FUM to $70.3 billion. Netwealth grew its customer base by 11,865 to 127,507. The company said the macroeconomic backdrop had been “very challenging” as rising interest rates encouraged some investors to invest in term deposits rather than in investments.

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Quick Singles

🪃 Local News

• Wisr announced that the current CFO, Andrew Goodwin, has been appointed to the role of Chief Executive Officer, effective immediately.

• Little Green Pharma CEO Fleta Solomon will leave the top job and transition into an executive director role on 29th August. Long-term COO Paul Long will step into the CEO role.

• Core Lithium went into a trading halt today pending an announcement of a capital raise. The company will raise $120m from retail and institutional investors at a price of $0.40 per share. Yesterday’s share price close was $0.54, with CXO now down 66.3% in the last 12 months.

🌏 Around The Globe

• Foxconn beat analyst earnings estimates thanks to a hot A.I. sector but downgraded its full-year revenue outlook to a slight decline due to global economic uncertainty, especially in China.

• Hollywood studios have made a new offer to striking screenwriters, including ensuring humans are credited as writers of screenplays and sharing data on the number of hours viewed on streaming services. Netflix and Disney are pushing to reach an agreement and end the ongoing strike.

• Argentinas Central Bank hiked the key interest rate to 118% from the current rate of 97%. The country’s official peso rate is now 350 per $US, compared to 287 per $US just last Friday. One year ago, this was 134 pesos!

• Russia's Central Bank hiked its key interest rate by 350 basis points to 12%, an emergency move to try and halt the rouble's recent slide after a public call from the Kremlin for tighter monetary policy.

• PayPal named Intuit executive Alex Chriss as its new CEO. He’ll replace retiring CEO Dan Schulman on September 27, who’s held the position since 2015.

₿ Crypto Corner

• Bankrupt crypto lender Celsius Network received court permission to seek creditor approval for its bankruptcy plan.

• Federal prosecutors have accused Sam Bankman-Fried of using money he stole from his FTX cryptocurrency exchange customers to make more than $100 million in political campaign contributions.

• A spot ETF has been approved… in Europe, with Jacobi FT Wilshire Bitcoin ETF, trading under the name BCOIN approved on the Amsterdam Euronext exchange.

Movers and Shakers

✅ Biggest Gainers

• PactGroup (PGH) rose 7.9% to $0.82 despite reporting a $6.6m loss for FY23 due to a non-cash impairment of $37 million in the company’s Packaging & Sustainability segment. Underlying NPAT was $45m, down from $70m in FY22. The company announced the sale of 50% of its Crate Pooling and Crate Manufacturing business to global infrastructure investment manager Morrison & Co. Pact also scrapped its final dividend, saying tougher economic conditions and higher inflation resulted in softening demand for packaging in consumer products. Before today's announcement, PGH shares were down over 65% in the last 12 months.

• Bapcor (BAP) reported an underlying NPAT of $125.3m, which despite being 4.8% down from FY22, beat analysts’ estimates of $128.1m. Revenue rose 9.7% during the year to $2,021m, with higher cost inflation and interest costs squeezing margins. The total dividend for the year was 22.0c p/s, up 2% from last year. The company said that it expects solid underlying performance going into FY24. However, the retail segment will continue to face challenging market conditions in an uncertain trading environment. BAP shares ended the day 5.4% higher to $6.77.

🔻Biggest Fallers

• Fletcher Building (FBU) was the biggest faller of the ASX200 companies who reported today, dropping by 9.2% to $4.60. The New Zealand-based building products company reported a sliding profit of 46% to $NZ235 million. The drop was due to a $301 million non-cash impairment, mostly related to the company’s NZICC construction project. Operating cash flows from operations were down significantly, dropping from $592 million to $388 million. The final dividend payout was cut to NZ16c p/s from NZ22c p/s last year. The company has seen softer demand in its residential markets in New Zealand and Australia and expects further tightening in overall volumes going into FY24.

• Seven West Media (SWM) won’t be paying a dividend for the second straight year, as a 7.9% decline in the TV advertising market drove a 27% decline in full-year profits to $146.3 million. Revenue also fell by 3% to $1,488m as the market decline accelerated during the second half of FY23. The company said it achieved its market revenue share of above 39% during 1H23 and Q4 and is targeting for this to exceed 40% during FY23. Shares ended the day down 6.2% to $0.37 and have dropped by 21% in the last 12 months.

Deep Dive

Back on Track: Transurban's Traffic Nears Pre-Pandemic Levels

Toll road giant Transurban has well and truly bounced back from the pandemic, with a +400% increase in profits on the back of traffic growth both in Australia and globally.

The company also announced that CEO Scott Charlton will resign after 11 years at the helm. Michelle Jablko, the company's CFO, is set to take the reins. The transition will officially take place after Transurban's annual meeting in October. An announcement regarding the new chief financial officer will be made "in due course."

Financial Highlights

• Revenue - $4,157m, +22.1%

• Toll Revenue - $3,314m +26.2%

• EBITDA - $2,448m, +28.9%

• NPAT - $92m, +429.9%

• Free Cash - $1,726m, +12.8%

• Final Dividend - 31.5cps, +21%

Traffic has rebounded strongly post-pandemic, reporting record-breaking average daily traffic volumes which exceeded 2.4 million trips. Income from Transurban's toll roads saw a 29% jump, reaching $2.45 billion, which was a slight miss to analysts’ expectations.

While traffic increased year-on-year on most roads, the A25 in Montreal was an exception, witnessing a 3.5% drop. It's worth noting that Transurban sold half of its interest in the A25 this year to Canadian infrastructure investor Caisse de Depot et Placement du Quebec (CDPQ), resulting in a post-tax loss of $94 million.

Average Daily Traffic Increases:

1. Melbourne, +24.4%

2. Sydney, +24.1%

3. Brisbane, +9.4%

4. North America, +6.7%

Most of the increase came from car traffic, which saw double-digit increases in Melbourne, Brisbane and Sydney. Whilst large vehicle traffic saw single-digit growth.

Transburban benefits from a high inflation environment as it can pass through toll fares on most of its roads, which helped the company improve margins.

The total FY23 Dividend was 58.0 cps, with Transburan saying it expects the FY24 dividend to be 62.0 cps, a growth of 7% from FY23, as it’s likely to include WestConnex cash previously held during construction.

The company expects to reap further benefits from inflation, which will flow into FY24 revenue and continued traffic growth into FY24.

A Little Extra

📉 Going Down?

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

Imugene (IMU) has steadily risen, cracking the top 10. A month ago, 5.9% of shares were shorted, now up to 7.01%. IMU went into a trading halt today, pending a capital raise.

1. Core Lithium (CXO) - 10.66%

2. Flight Centre (FLT) - 10.19%

3. IDP Education (IEL) - 9.40%

4. JB Hi-Fi (JBH) - 8.01%

5. Select Harvest (SHV) - 7.95%

6. Syrah Resources (SYR) - 7.91%

7. Pilbara Resources (PLS) - 7.58%

8. Brainchip (BRN) - 7.55%

9. AMA Group (AMA) - 7.03%

10. Imugene Resources (IMU) - 7.01%

📊Broker Ratings

What do the brokers have to say?

• Pro Medicus (PME) - Upgraded to Hold from Reduce (Morgans)

• REA Group (REA) - Upgraded to Overweight from Equal-weight (Morgan Stanley)

• Sims (SGM) - Upgraded to Neutral from Underperform (Macquarie)

• Treasury Wine Estates (TWE) - Upgrade to Add from Hold (Morgans)

💲Dividends

Companies trading ex-dividends today

1. Resmed (RMD) - $0.05 p/s

2. Commonwealth Bank of Australia (CBA) - $2.40 p/s

3. Dicker Data (DDR) - $0.10 p/s

📅 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.