AU Weekly Wrap | The ASX 200 Rises for 6 Consecutive Trading Days, Up Nearly 2.5% This Week on Mixed Company Results

Moomoo News AU wrote a column · Aug 16 07:20

AU Weekly Wrap | The ASX 200 Rises for 6 Consecutive Trading Days, Up Nearly 2.5% This Week on Mixed Company Results

Australian shares gained for the sixth consecutive session on Friday, driven by investor confidence that the US economy would avoid a recession, improving the earnings outlook. The $S&P/ASX 200 (.XJO.AU)$ rose 1.3% to 7971.1 points, and for the week, the index increased by 2.4% as profits met expectations and bond yields eased.

Macro News

Australia Business Conditions Bounce in July, Cost Pressures Easing

Australian business conditions improved in July, driven by a rebound in employment, while cost pressures eased as high interest rates slowed demand, according to a survey by National Australia Bank (NAB). The business conditions index rose 2 points to +6, slightly below its long-run average, while the business confidence index fell 2 points to +1. Employment surged from 0 to +7, although sales eased to +9 from +11. Price pressures cooled, with product price inflation holding at 0.7% quarterly and purchase costs growing 1.1%. However, labour costs increased to a quarterly rate of 2.5% due to minimum wage hikes. The Reserve Bank of Australia kept interest rates steady at 4.35% in August, deeming it sufficient to curb inflation while maintaining employment gains.

Australia Q2 Wages Rise at Slowest Pace in a Year

Australian wages rose at their slowest pace in a year during the June quarter, indicating the peak for this cycle had passed and wages would not impede potential interest rate cuts. The Australian Bureau of Statistics reported a 0.8% rise in the wage price index, below market forecasts of 0.9%. Annual pay growth remained at 4.1%, with private sector wages increasing by 0.7% in the quarter.

RBNZ Cuts Benchmark Interest Rate by 25bps from 5.50% to 5.25%

The Reserve Bank of New Zealand (RBNZ) unexpectedly cut its cash rate by 25 basis points to 5.25%, the first cut since March 2020. Economists had anticipated the rate to remain at 5.5%. The RBNZ noted that inflation is returning to its target range and expects consumer price inflation to stay near 2%. The central bank also lowered its benchmark rate forecast, suggesting potential further cuts by year-end.

Company News

What Investors Need to Know About CommBank's Latest Earnings Report

Australia's leading bank stock, $CommBank (CBA.AU)$, released its latest full-year earnings report on Wednesday. The bank declared its dividend of A$2.5 per share after reporting a $9.84 billion profit. Despite a 2% drop in cash profit and a declining net interest margin, the results met analysts' expectations, leading to a positive share price reaction. While consumer arrears rose due to higher interest rates and living costs, CBA highlighted the economy's resilience.

Telstra Share Price Higher on Strong FY24 Results

$Telstra Group Ltd (TLS.AU)$'s share price rose after reporting positive FY 2024 results. The company saw a 1% increase in total income to $23.5 billion and a 9.2% rise in Mobile EBITDA to $5,026 million. This led to a 3.6% increase in underlying EBITDA to $8.2 billion and a 7.5% rise in net profit after tax to $2.3 billion. Consequently, Telstra raised its dividend by 5.9% to 18 cents per share. CEO Vicki Brady highlighted strong performance and expects further growth in FY 2025, with EBITDA guidance of $8.5 billion to $8.7 billion. Goldman Sachs noted the results exceeded expectations. Despite the recent gains, Telstra's share price is down 8% over the past 12 months.

Goodman Share Price Lower Despite Smashing FY24 Guidance

$Goodman Group (GMG.AU)$'s share price fell on Thursday following the release of its FY 2024 results. The company reported a 15% increase in operating profit to $2,049.4 million and a 14% rise in operating earnings per share to 107.5 cents, surpassing its guidance. Portfolio occupancy was at 97.7%, and like-for-like net property income grew by 4.9%. However, Goodman reported a statutory loss of $98.9 million due to negative revaluation movements. The full-year distribution remained flat at 30 cents per share. CEO Greg Goodman highlighted strong demand and operational performance despite market uncertainties. For FY 2025, Goodman provided conservative guidance with a 9% increase in operating earnings per share to 117.2 cents and maintained distribution at 30 cents per share.

Origin Energy Annual Profit, Dividend Rises

$Origin Energy Ltd (ORG.AU)$ increased its annual profit to A$1.4 billion and raised its dividend to 27.5 Australian cents per share, despite a 2% drop in revenue to A$16.14 billion. The profit rise was driven by strong operational performance, though hindered by a 17% fall in LNG prices. The Energy Markets division saw a significant increase in EBITDA to A$1.66 billion, benefiting from higher spot natural-gas prices and increased generation at the Eraring power plant. However, Origin expects a decline in Energy Markets EBITDA for FY 2025 due to anticipated lower electricity profits and higher coal procurement costs. Origin is continuing independently after a failed US$11 billion acquisition bid by Brookfield. The company's strategy includes building large-scale batteries and delaying the Eraring plant's closure to aid the transition to renewable energy.

National Australia Bank's Cash Earnings Drop to AU$1.75 Billion in Fiscal Q3

$National Australia Bank Ltd (NAB.AU)$ shares rose on Friday despite reporting a decrease in cash earnings to AU$1.75 billion for the quarter ended June 30, down from AU$1.90 billion a year ago. Statutory net profit increased to AU$1.90 billion from AU$1.75 billion. Lending balances grew by 1% over the quarter, driven by a 3% increase in Australian SME business lending.

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