AU Weekly Wrap | ASX 200 Closes at Record High; Energy and Utilities Sectors Shine

Moomoo News AU wrote a column · Nov 22, 2024 17:38

AU Weekly Wrap | ASX 200 Closes at Record High; Energy and Utilities Sectors Shine

Market Review

Over the past week, $S&P/ASX 200 (.XJO.AU)$ closed higher 1.31%, setting a new record close at 8,393.80 points. The market performance was mixed, with 8 out of 11 sectors seeing gains, reflecting an overall upward trend for the index. Notably, the Energy and Utilities sectors led the gains, rising 4.32% and 4.29%, respectively.

Source: ASX

Macro News

Geopolitical tensions escalate

Earlier this week, Ukraine utilized weapons from the United States and the United Kingdom to launch attacks on two Russian military facilities in Kursk and Bryansk. In response, Russian forces conducted a joint strike against Ukrainian defense industry enterprises. Concerns over the escalating conflict between Ukraine and Russia have led to a rise in oil prices, which in turn, has propelled energy stocks higher.

Analysts: The RBA will have sufficient employment data to justify a rate cut

Gareth Aird, the Chief Economist at Commonwealth Bank of Australia, stated in the past that there was a growing consensus that Australia's unemployment rate did not need to rise from its then-current level for the Reserve Bank of Australia (RBA) to justify a rate cut with the necessary data. He anticipated a rate cut in February of the following year, as wage growth had already slowed and was in line with inflation consistently returning to the 2%-3% target range.

Over the past six months, the unemployment rate had been hovering around 4.1%, and Aird believed that a higher unemployment rate may not be necessary to bring inflation back to target. He added that the RBA's implied estimate of a 4.5% unemployment rate for full employment seemed too high. This suggested that the Australian economy could potentially see interest rate reductions without a significant increase in unemployment, which would be positive news for economic stability and growth.

Company News

A2 Milk raised its revenue projection and initiated a dividend program

$The a2 Milk Co Ltd (A2M.AU)$ updated its FY25 revenue guidance and announced its dividend policy in the past. The company had expected mid to high single-digit revenue growth for FY25 compared to FY24, which was an upgrade from the previous guidance of mid single-digit growth. The company announced a dividend policy. The policy targeted a payout ratio range of between 60% and 80% of net profit after tax.

Technology One announced strong earnings performance

$Technology One Ltd (TNE.AU)$ announced its financial results for the year ended 30 September 2024, showcasing strong performance across key financial metrics. Profit Before Tax reached A$152.9 million, marking an 18% increase and surpassing the guidance of 12%-16% growth.Profit After Tax also saw a significant rise, up 15% to A$118.0 million. The Total Annual Recurring Revenue (ARR)1 climbed to A$470.2 million, a 20% increase, while the Net Revenue Retention (NRR) stood at 117%, exceeding the long-term target of 115%.

GQG Pantners stock tumbled on Adani probe

$GQG Partners Inc (GQG.AU)$ plummeted as the Florida-headquartered asset management firm reassessed its substantial investment in Adani Group following allegations by US authorities that Gautam Adani, the chairman of Adani Group, was involved in facilitating a $250 million bribery plot. The investment firm disclosed that over ninety percent of its portfolio holdings are in companies that have no affiliation with the Adani Group.

Wise Tech Global made the decision to reduce its revenue and profit estimates for the fiscal year 2025

$WiseTech Global Ltd (WTC.AU)$ decision to lower its revenue and profit forecasts for the fiscal year 2025 during its annual general meeting. The founder, Richard White, apologized to shareholders for the scandal involving the billionaire and attributed the delay in the release of key products to "media distractions".

Accent Group profits hit by deep retail discounts

$Accent Group Ltd (AX1.AU)$ cautioned that its gross profit margins were being squeezed as retailers heavily discount their products to lure customers back into stores. This aggressive discounting strategy is taking a toll on Accent Group's financial performance.

Pinnacle Investment Management Group raises A$400 million fund Pinnacle's strategic investments in VSS Capital and Pacific Asset Management

$Pinnacle Investment Management Group Ltd (PNI.AU)$ successfully raised A$400 million through an institutional share placement, issuing 19.7 million ordinary shares at AUD 20.30 each. The funds raised will be allocated to finance Pinnacle's strategic investments in VSS Capital and Pacific Asset Management, as well as to bolster new strategies for current affiliates and other expansion efforts.

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