Market Wraps

Evening Wrap: ASX 200 bounces + Australian CPI in focus

Tue 27 Jun 23, 5:10pm (AEST)

 The S&P/ASX 200 closed 40 points higher, up 0.56%. 

The market snapped a four-day losing streak as it heads into the seasonally strong month of July. Australian CPI data is due tomorrow at 11:30 am AEST, Collins Food surges on an upbeat FY23 result, Goldman Sachs reaffirms a Buy for Technology One while UBS says Corporate Travel is a Buy amid the recent slump in share price.

Let's dive in.


Today in Review

Tue 27 Jun 23, 4:44pm (AEDT)

Name Value % Chg
Major Indices
ASX 200 7,118.2 +0.56%
All Ords 7,300.0 +0.49%
Small Ords 2,739.9 +0.02%
All Tech 2,334.6 -0.69%
Emerging Companies 1,992.2 -0.42%
Currency
AUD/USD 0.6715 +0.61%
US Futures
S&P 500 $4,383.5 +0.30%
Dow Jones $34,048.0 +0.23%
Nasdaq $14,911.5 +0.37%
Name Value % Chg
Sector
Real Estate 3,013.7 +1.95%
Materials 18,020.2 +1.16%
Financials 6,094.7 +0.66%
Consumer Staples 13,274.7 +0.30%
Energy 10,627.5 +0.21%
Consumer Discretionary 2,861.0 +0.02%
Industrials 6,695.3 -0.06%
Health Care 41,200.9 -0.12%
Utilities 8,835.9 -0.13%
Information Technology 1,759.2 -0.37%
Communication Services 1,515.9 -0.65%

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ASX 200 Session Chart

2023-06-27 16 53 12-S&P ASX 200 (LIVE DATA) Share Prices & Charts - Market Index
ASX 200 breaks a four day losing streak and closed near best levels (Source: Market Index)

Markets

Ooft. The ASX 200 snapped a four-day losing streak and finished near best levels. The market is beginning to pick up the pieces after a sharp pullback. But the question is whether or not this is the beginning of a sustained bounce or just a bounce off oversold levels. Let's see if the market can continue to find some traction over the next couple of sessions.

That said, Australia's Monthly CPI Indicator is due tomorrow at 11:30 am AEST. The previous print on May 31 was scorching hot at 6.8% (vs. 6.4% expected) and triggered a 1.6% selloff for the ASX 200.

On a seasonal note, the 26 June has historically marked the May-June low (based on ASX 200 data from June 1992 to March 2023). Of note, the last four days of June have historically been positive, which then leads into the seasonally strong month of July.

Economy

No major economic announcements.


Latest news


Market Insights: Australian CPI

Consensus expects Australian inflation to ease to 6.1% in May from 6.8% in the previous month. That said, analysts from Market Economics and JPMorgan expect a hot print of 6.6% and 5.9% respectively. While those from Macquarie and NAB are both forecasting a cool reading of 5.9%.

Hopefully we've cycled through those fuel excise prices.

h7kIMwXg (1)
Source: Bloomberg

Interesting news and movers

Trading higher

  • +17.7% Collins Food (CKF) – Earnings

  • +12.1% Impedimed (IPD)

  • +6.4% Chrysos Corp (C79)

  • +4.0% Centaurus Metals (CTM)

  • +3.0% Highfield Resources (HFR) – Secures access for Mulga Potash Mine

  • +2.2% Sonic Healthcare (SHL) – Acquires SYNLAB Suisse

  • REIT sector move: Scentre Group (+4.0%), Dexus (+2.8%), GPT Group (+2.7%), Homeco Daily Needs REIT (+2.6%), Charter Hall (+2.3%)

Trading lower

  • -16.7% Legend Mining (LEG) – Drilling update

  • -10.8% Starpharma (SPL) – Clinical trial update

  • -6.5% Leo Lithium (LLL)

  • -6.1% Perenti (PRN) – Downgrades by Citi 

  • -4.4% Lark Distilling (LRK) – Continuation selloff, down 15% in last three

  • -3.9% Medibank (MPL) – APRA imposes increased capital adequacy req

  • -3.6% Mesoblast (MSB) – Continuation selloff, down 11.8% in last three


Broker notes

Goldman Sachs on Technology One (TNE):

  • Buy with $18.30 target price

  • “Over the last two years TNE has demonstrated an improvement in the rate of underlying growth at the same time as it shifts legacy on-premise customers to cloud, creating a dual tailwind to ARR growth that has continued to surprise to the upside.”

  • “We highlight the defensiveness of TNE’s core end markets of Local Government (35% of 1H23 ARR) and Education (25%), and the public sector more broadly (>75%), with growing IT spending supported by revenue streams including council rates and government funding.”

UBS on Corporate Travel Management (CTD):

  • Buy with $25.95 target price

  • The Whole of Australia Government (WOAG) contract is positive for several reasons: 1) Reinforces CTD’s strong market position; 2) Generates ~$10m EBITDA; 3) Represents ⅓ of earnings from the recent HLO Corporate acquisitions and 4) Publicity around the tender process creates heightened reputational risk

  • “Furthermore, the absence of any negative trading update (being so close to year-end), in our view should derisk the FY23 result. We remain positive heading into the result - we believe investors should consider CTD's high exposure to government / essential services customers (UBSe 40-50% of EBITDA), which in our view reduces earnings volatility.”

UBS on Collins Food (CKF):

  • Neutral with $8.10 target price

  • “Strong top line and +6% NPAT beat. UBSe analysis suggests 1st 7wks trading LFL for KFC Aus +8.8% equates to +14.1% pricing / -4.6% vol (we prev est. KFC Aus could sustain -6% vol in FY24 without need to d/grade).”

  • “Stronger vs exp. top line, cost inflation impacting mgn, but still a beat and within g/ dance. Key 2H23 surprise = EU with very strong top line and 2H EBITDA mgns > 1H23.”


Scans 

Top Gainers

Code Company Last % Chg
FRS Forrestania Resou... $0.15 +97.37%
LVE Love Group Global... $0.115 +55.41%
IIQ Inoviq Ltd $0.71 +42.00%
PHL Propell Holdings Ltd $0.028 +27.27%
DCL Domacom Ltd $0.043 +22.86%
View all top gainers

Top Fallers

Code Company Last % Chg
BXN Bioxyne Ltd $0.016 -27.27%
BME Black Mountain En... $0.015 -25.00%
A8G Australasian Meta... $0.11 -21.43%
AHI Advanced Health I... $0.205 -19.61%
BOA Boadicea Resource... $0.047 -16.07%
View all top fallers

52 Week Highs

Code Company Last % Chg
LVE Love Group Global... $0.115 +55.41%
OZZ OZZ Resources Ltd $0.135 +22.73%
AFA Asf Group Ltd $0.062 +12.73%
IPD Impedimed Ltd $0.185 +12.12%
BKY Berkeley Energia Ltd $0.58 +10.48%
View all 52 week highs

52 Week Lows

Code Company Last % Chg
BME Black Mountain En... $0.015 -25.00%
A8G Australasian Meta... $0.11 -21.43%
SHG Singular Health G... $0.033 -17.50%
QXR QX Resources Ltd $0.025 -16.67%
TSI Top Shelf Interna... $0.16 -15.79%
View all 52 week lows

Near Highs

Code Company Last % Chg
VLUE Vaneck MSCI Inter... $23.61 -0.25%
SEMI Global X Semicond... $11.33 -0.53%
MSTR Morningstar Inter... $9.17 +0.22%
BILL Ishares Core Cash... $100.58 +0.04%
SLA Silk Laser Austra... $3.33 +0.30%
View all near highs

Relative Strength Index (RSI) Oversold

Code Company Last % Chg
CTD Corporate Travel ... $17.85 -0.39%
DGL DGL Group Ltd $0.67 -2.90%
RAC Race Oncology Ltd $1.27 +9.48%
HPI Hotel Property In... $3.15 +1.94%
AX1 Accent Group Ltd $1.565 +2.29%
View all RSI oversold

Written By

Kerry Sun

Content Strategist

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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