AU Morning Wrap: ASX Lifts 0.4%; Mineral Resources Jumps 5% on Albemarle Deal

Moomoo News AU wrote a column · Jul 20, 2023 19:34

G'day, mooers! Check out the latest news on today's stock market!
• Dow logs 8th straight day of gains as bank results reassure investors
• ASX lifts 0.4%; Mineral Resources jumps on Albemarle deal
• Stocks to watch: QBE, Flight Centre, Mineral Resources
- Moomoo News AU

AU Morning Wrap: ASX Lifts 0.4%; Mineral Resources Jumps 5% on Albemarle Deal

Wall Street Summary

Stocks rose Wednesday, bringing an eighth consecutive day of gains for the Dow, as bank results and easing inflation overseas helped sustain the recent rally.

The $Dow Jones Industrial Average(.DJI.US)$ added 109.28 points, or 0.3%, to finish at 35061.21 for its longest streak of gains since 2019. The broad $S&P 500 Index(.SPX.US)$ index climbed 0.2%, led by real-estate and utility shares. The tech-centric $Nasdaq(NDAQ.US)$ added less than 0.1%.

AU Market Watch

The $S&P/ASX 200(.XJO.AU)$ is up 0.4 per cent in early trade with Mineral Resources shares adding 4.7 per cent to $75.28 after it agreed a deal to sell its interest in the Kemerton lithium hydroxide refinery to partner Albemarle.

Flight Centre is also up 4.8 per cent after it said leisure and business travel conditions are strong as it upgraded EBITDA guidance for financial 2023. Shares in insurance group QBE have also advanced 2.1 per cent after it said it expects to meet operating guidance for financial 2023.

BHP is up 0.5 per cent after it said it might iron ore production guidance in 2023, with Fortescue shares up 0.6 per cent.

Stocks to Watch

$Rio Tinto Ltd(RIO.AU)$: Broker Citi has kept a buy rating on miner Rio Tinto after it said it expects full-year iron ore production for financial 2023 to be at the top end of guidance between 320 million and 335 million tonnes.

Citi has pencilled in a first half 2023 dividend of $US1.75 per share and total 2023 dividends of $US3.31 per share on an underlying profit of $US10.1 billion.

$Santos Ltd(STO.AU)$: Santos said it expects to report free cash flow of $US400 million over the second quarter of 2023 on sales of $US1.3 billion. Total free cash flow for the first half of the year is expected to be more than $US1.1 billion.

Chief executive Kevin Gallagher said the result "positions the company well to deliver shareholder returns, backfill and sustain our existing business while also investing in our decarbonisation projects."

$Evolution Mining Ltd(EVN.AU)$: Gold miner Evolution Mining said it expects to post higher cash flows and capital returns in financial 2024.

Total gold production in financial 2023 was 651,155 ounces, around 1 per cent higher than prior guidance on an all in sustaining cost of $1450 per ounce, it said.

$Mineral Resources Ltd(MIN.AU)$: Iron and lithium processing giant Mineral Resources said it has amended its joint venture with $Albemarle(ALB.US)$ so that its share of the Wodgina lithium mine will increase to 50 per cent and Mineral Resources will remain the operator of the mine.

Albemarle will take full ownership of the Kemerton lithium hydroxide plant, which it currently operates.

As a result of the revised deal Albemarle will pay Mineral Resources an estimated $US380 million and $US400 million including the net consideration for MinRes' share of Kemerton and completion adjustments at Wodgina and Kemerton.

$BHP Group Ltd(BHP.AU)$: BHP Group said it's committed to improving employees' safety after the death of two workers over the financial year to June 30.

The miner added full year production guidance was achieved for copper, iron ore, metallurgical coal and energy coal. Meanwhile, nickel achieved revised guidance and finished in line with the lower end of original guidance.

$QBE Insurance Group Ltd(QBE.AU)$: Sprawling insurance group QBE has warned storms in North America means it now expects catastrophe costs in the region of $700 million over the six months to June 30.

Gross premium growth is expected to reach 10 per cent in the first half of 2023 with gross written premiums around $12 billion.

$Flight Centre Travel Group Ltd(FLT.AU)$: Leisure and business travel operator Flight Centre said it now expects to post an EBITDA (operating income) of between $295 million and $300 million in financial 2023, versus prior guidance between $270 million and $290 million.

$Zip Co Ltd(ZIP.AU)$: Buy now, pay later player Zip Co said June quarter revenue climbed 21.1 per cent to $193.8 million, with total transaction volume up 6.4 per cent to $2.3 billion.

Total bad debts equalled 0.85 per cent of total transaction value, versus 2.7 per cent in the final quarter of financial 2022.