AU Weekly Wrap | Economists delay RBA rate cut forecast to May; Star Entertainment touches record low

Moomoo News AU joined discussion · Nov 29, 2024 17:57

AU Weekly Wrap | Economists delay RBA rate cut forecast to May; Star Entertainment touches record low

Market Review

Over the past week, $S&P/ASX 200 (.XJO.AU)$ dipped by 0.1%, losing 8.1 points to finish at 8436.2, with seven out of eleven sectors declining. The All Ordinaries remained unchanged. Over the week, however, the benchmark index managed to secure a 0.5% gain.

Macro News

Trump Plans Major Tariffs on Mexico, Canada, China

President-elect Donald Trump announced plans to implement steep tariffs on imports from Mexico, Canada, and China immediately after assuming office. He stated on Truth Social that he would impose a 25% tariff on all goods from Mexico and Canada and an additional 10% tariff on Chinese imports, adding to pre-existing tariffs on China. Trump linked these tariffs to concerns over drugs, particularly Fentanyl, and illegal immigration, suggesting they would remain until these issues are resolved. This move could potentially disrupt the USMCA trade agreement, which facilitated an estimated $1.8 trillion in trade in 2022.

Economists Delay RBA Rate Cut Forecast to May

In October, Australia's headline inflation remained flat, but trimmed mean inflation saw a rise, supporting Capital Economics' forecast that the Reserve Bank of Australia (RBA) will not cut interest rates before the second quarter of next year. Marcel Thieliant, head of APAC, highlighted that significant energy subsidies led to a sharp drop in electricity prices, influencing the October data. Yet, when energy costs are excluded, inflation still surpasses the RBA's target range of 2%-3%. This rebound in trimmed mean inflation indicates potential risks to the RBA’s prediction of 3.4% inflation for the fourth quarter, with price pressures easing slowly. Consequently, economists from ANZ, AMP, and Bank of Queensland have revised their predictions, now expecting the RBA's first rate cut in May, delayed from an earlier forecast of February.

Company News

Star Entertainment Touches Record Low

$The Star Entertainment Group Ltd (SGR.AU)$ reported an EBITDA loss of AU$27 million for the first four months of the fiscal year ending in October, as per their recent filing. Following new regulations at Star Sydney, daily revenue dropped 15.5%. The company, deemed unfit to hold casino licenses in New South Wales and Queensland, faced scrutiny from two external reports. A new inquiry, the Bell Two report, began on Feb. 19 to investigate The Star Sydney's operations. Facing significant liquidity challenges, the company secured AU$200 million in new debt facilities. To regain profitability, Star Entertainment revised its remediation plan, targeting various milestones by March 2025. Additionally, they restructured to a property-led model to improve management efficiency and address regulatory concerns, with each property now overseen by a local CEO and independent boards. CEO Steve McCann acknowledged the challenging path ahead for the company.

Cuscal Ltd's $336.8M IPO Draws Strong Demand

$Cuscal Ltd (CCL.AU)$ IPO, priced at $2.50 per share, is poised to be one of the year's largest, raising $336.8 million. Specializing in payment services for banks and B2B solutions for institutional clients, the company garnered significant demand quickly, with cornerstone commitments accounting for about half of the total, reports The Australian.

Web Travel Group Shares Surge with Strong Half-Year Results

$Web Travel Group Ltd (WEB.AU)$shares rose 6.52% on Friday, with trading volume expanding to A$18.45 million. Web Travel has risen 21.40% over the past week, with a cumulative loss of 28.75% year-to-date. Web Travel released its half-year results on November 27, 2024, revealing that WebBeds' Total Transaction Value (TTV) had increased by 25% compared to the first half of 2024. It is anticipated that TTV margins will stabilize at around 6.5%, with a continued target of A$10 billion in TTV for the fiscal year 2030, and approximately 50% EBITDA margins to ensure profitable growth.

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