Market Wraps

Evening Wrap: ASX 200 nosedives, CBA flops 5% on half-year earnings, Woodside dividends at risk

Wed 15 Feb 23, 5:23pm (AEST)

The S&P/ASX 200 closed 79 points lower, down -1.06%.

Commonwealth Bank and peers rock the market, Woodside flags a massive US$4.4 billion in depreciation and amortisation, ASX 200 now faces a sharp U-turn from near all-time highs and UBS views on companies that reported today.

Let's dive in.

Today in Review

Wed 15 Feb 23, 4:18pm (AEST)

Name Value % Chg
Major Indices
ASX 200 7,352.2 -1.06%
All Ords 7,559.1 -0.91%
Small Ords 2,887.1 -0.19%
All Tech 2,184.7 -0.28%
Emerging Companies 2,192.7 -0.77%
AUD/USD 0.6937 -0.72%
US Futures
S&P 500 4,128.5 -0.41%
Dow Jones 34,028.0 -0.27%
Nasdaq 12,563.75 -0.53%
Name Value % Chg
Utilities 7,890.8 +1.12%
Consumer Discretionary 2,986.7 +0.55%
Industrials 6,511.4 +0.23%
Communication Services 1,499.3 +0.06%
Health Care 43,237.7 +0.05%
Real Estate 3,217.2 -0.02%
Materials 18,663.2 -0.07%
Information Technology 1,469.1 -0.73%
Energy 11,006.2 -0.88%
Consumer Staples 13,169.2 -1.36%
Financials 6,507.5 -3.39%

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ASX 200 Session Chart

ASX intraday
ASX 200 trends downwards from the open until 1:30 pm AEDT, closing a little off session lows (Source: TradingView)


The ASX 200 was battered after Commonwealth Bank flopped more than 5% on first half earnings that were a little below consensus. This triggered a broad-based selloff among banks with NAB, Westpac and ANZ all down around 3-4%. Its worth noting that CBA trades at a hefty premium relative to its peers and global banks, so when things head south, boy do they go south.

  • Consumer Staples was heavy with Treasury Wine (-5.8%) slumping on first-half earnings

  • Energy slumped as the resurgence of coal stocks was outweighed by Woodside (-2.4%)

    • Barrenjoey notes that Woodside's line-item guidance D&A of US$4.4 billion was US$1.3 billion higher than consensus, which implies a lower dividend outlook

  • Tech names were generally higher but heavyweight Computershare (-3.4%) posted a weaker-than-expected full-year outlook


RBA Lowe speech highlights:

  • On peak rates: "I don't think we're at the peak yet but how far we have to go up I don't know."

  • A narrow path: "So the risks are two-sided and we're trying to navigate our way through a narrow path. I understand why some people focus on the risks on the one side but we've got to be attentive to the risk from higher inflation."

  • On fixed-rate roll off shock: “It’s a critical issue because the pool of excess savings in Australia … is more than 20 per cent of one year’s household disposable income. So there’s a huge pool of excess savings.”

Latest news

Market Insights

Banks smashed

Its probably worth taking a look at the stock that smashed the market today: Commonwealth Bank.

Earnings at a glance (expected as per StreetAccount consensus:

  • Net interest income of $11.64 billion vs. $11.56 billion expected

  • Cash EPS of $3.04 vs. $3.01 expected

  • Net interest margin of 2.10% vs. 2.12% expected

  • Loan impairment expense of $511 million vs. $451.8 million

  • On-market share buy-back increased by an additional $1 billion

Optimistic but cautious commentary:

  • Expect that business credit growth to moderate and global growth to slow during 2023

  • Optimistic that a soft landing for the Australian economy can be achieved

  • Reaffirmed that banks remain well provisioned and capitalised

  • Flagged downside risks as further cash rate hikes are expected, and that impact on households and businesses is lagging

CBA chart: CBA staged a 2.8% bounce off session lows (by 10:40 am AEDT) but that was quickly sold into. The stock is holding the 200-day moving average, but the next few days will be key (e.g. brokers update their ratings and institutions rejig their exposure).

Of note, Wednesday's volume was 230% vs. 20-day averages (7.1m shares traded vs. 2.15m).

CBA price chart
Source: TradingView

Which leads into the ASX 200

The ASX 200 rallied to within 1.5% of all-time highs thanks to outsized performances from banks and miners. But now they're on the back foot.

  • CBA has de-rated aggressively on today's results

  • BHP, Rio Tinto and Fortescue have retreated ~5% from recent highs

I've said this to death in my Morning Wraps but from a technical standpoint, the pullback is just as important as the rally. Especially coming out of a bear market (which we still might be in one), you want the pullbacks to be well-supported and also for volatility to drop off.

At the Index level, we're seeing the opposite of that, where distribution and volatility is picking up.

The other bit of food for thought is does the performance of the ASX 200 actually matter for other pockets of the market like tech, biotech and lithium. The big fall today mostly reflects the performance of five companies (the big four banks and Woodside).

Would the S&P 500 or Nasdaq be a better indicator or barometer for those types of growth-y sectors?

XJO weekly chart
XJO weekly chart (Source: TradingView)

Interesting news and movers

Trading higher

  • +14.4% Star Entertainment (SGR) – Bounce, down more than 30% in prev three

  • +8.1% GUD Holdings (GUD) – Reports 1H earnings

  • +7.8% Cochlear (COH) – Reports 1H earnings

  • +7.1% Magellan Financial (MFG) – Upgraded to Buy from Sell at UBS

  • +5.6% Tourism Holdings (THL) – Issues full-year guidance

  • +5.4% Pact Group (PGH) – Reports 1H earnings

  • +4.8% Piedmont Lithium (PLL)

  • +3.3% Paladin Energy (PDN)

  • +2.7% Netwealth (NWL) – Reports 1H earnings

  • +2.0% Vicinity Centre (VCX) – Reports 1H earnings 

  • +1.3% Seven Group (SVW) – Reports 1H earnings

  • +1.3% Wesfarmers (WES) – Reports 1H earnings

Trading lower 

  • -13.6% Brainchip (BRN)

  • -6.9% Treasury Wines (TWE) – Reports 1H earnings

  • -5.7% Commonwealth Bank (CBA) – 1H earnings, announces buyback

  • -4.0% Computershare (CPU)

  • -2.9% Lifestyle Communities (LIC)

Broker updates 

UBS target prices and commentary for companies that reported results today.

Seven Group (SVW)

  • Retains Buy with $25.40 target price

  • “Solid result with 1H23 Group EBIT 13% beat on UBSe. Beat driven by stronger than forecast performance across SVW's premium assets … Group EBIT guidance range raised but in our view may be conservative …” 

Commonwealth Bank (CBA)

  • Retains Neutral with $105.00 target price

  • “Storm clouds gathering, outlook less certain but "soft landing" still expected”. From a valuation perspective, “CBA is trading at 2.4x Price / Book Value, in-line with historical average and PE of ~17.7x, slightly above its historical”

GUD Holdings (GUD)

  • Retains Neutral with $8.40 target price

  • “Outlook commentary and Jan/Feb trading generally pleasing. Operating cash conversion missed out 1H23 forecast and gearing is slightly higher than expected.”

Wesfarmers (WES)

  • Retains Buy with $56.00 target price

  • Net profit was in-line with UBS estimates but 5% above market consensus, led by Kmart and WesCEF. “Retail trading for the first 5 weeks broadly in-line with 1H12 growth. WES retail divisions to manage softer demand … because of value credentials and low cost operating models.” 

Treasury Wine (TWE)

  • Retains Buy with $14.75 target price

  • “1H23 NPAT-S above UBSe but below mkt; EBIT margin expansion surprises. NSR below UBSe.” UBS says given trading conditions in the 1H and expectations of the 2H to be consistent, risk to FY23 earnings is to the downside.


Top Gainers

Code Company Last % Chg
ECG Ecargo Holdings Ltd $0.035 +75.00%
OM1 Omnia Metals Grou... $0.305 +69.44%
BVR Bellavista Resour... $0.215 +22.86%
AGD Austral Gold Ltd $0.059 +20.41%
EMT Emetals Ltd $0.012 +20.00%
View all top gainers

Top Fallers

Code Company Last % Chg
CAQ CAQ Holdings Ltd $0.016 -36.00%
PNR Pantoro Ltd $0.059 -32.96%
W2V Way 2 Vat Ltd $0.015 -21.05%
FZR Fitzroy River Cor... $0.135 -20.59%
AHQ Allegiance Coal Ltd $0.012 -20.00%
View all top fallers

52 Week Highs

Code Company Last % Chg
ECG Ecargo Holdings Ltd $0.035 +75.00%
OM1 Omnia Metals Grou... $0.315 +75.00%
LGI LGI Ltd $2.46 +11.31%
LGM Legacy Minerals H... $0.175 +9.38%
AKL Auckland Real Est... $0.95 +7.35%
View all 52 week highs

52 Week Lows

Code Company Last % Chg
PNR Pantoro Ltd $0.059 -32.96%
W2V Way 2 Vat Ltd $0.015 -21.05%
AHQ Allegiance Coal Ltd $0.012 -20.00%
TUL Tulla Resources Plc $0.28 -20.00%
HYD HYDRIX Ltd $0.049 -16.24%
View all 52 week lows

Near Highs

Code Company Last % Chg
SMLL Betashares Aust S... $3.46 0.00%
OZBD Betashares Austra... $44.09 -0.02%
AN3PI Australia and New... $102.40 -0.48%
PCI Perpetual Credit ... $1.005 0.00%
WVOL Ishares Edge MSCI... $34.37 -0.46%
View all near highs

Relative Strength Index (RSI) Oversold

Code Company Last % Chg
ANN Ansell Ltd $25.79 +0.59%
CY5 CYGNUS Metals Ltd $0.32 -4.48%
PPK PPK Group Ltd $1.12 +0.45%
E25 Element 25 Ltd $0.77 +1.32%
JRV Jervois Global Ltd $0.20 -9.09%
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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