Evening report Monday

A strong rally in the mining sector helped the Aussie market start the week on a bright note, with the ASX 200 up 81.5pts or 1.23 per cent, to 6687.1. Eight sectors finished higher, with resources doing
most of the heavy lifting. The materials and energy sectors both posted gains of 2.4 per cent and 2.2 per cent, respectively. Following strong gains by the tech-heavy Nasdaq on Friday, the local Tech sector also surged by 2.85 per cent.

For the week ahead, speeches by Reserve Bank (RBA) officials as well as minutes of the last RBA Board meeting will dominate investor attention locally. Overseas, the focus will be on the US earnings season which heats up along with updates on global manufacturing activity and inflation.

In company news, Australia and New Zealand Bank (ANZ) announced a $4.9 billion acquisition of Suncorp Bank. ANZ will use a combination of its existing capital and proceeds from a $3.5 billion equity raise ($18.90 offer price) to fund the acquisition. ANZ expects the acquisition to be completed towards the back end of 2023 (2HCY23), following approval from the Federal Treasurer and the Australian Competition and Consumer Commission (ACCC).

ANZ also released a trading update, outlining a 5 per cent quarterly lift in its revenues, and a 6 basis-point increase in its underlying net interest margin to 1.64 per cent. ANZ expects future interest rate hikes to be “supportive for margins”, but has also increased its collective provision balance due to the risks associated with higher inflation & interest rates. Shares of ANZ entered a trading halt (expected to resume trading on 21 July), while Suncorp shares climbed 6.1 per cent – its best day since August 2021.

Whitehaven Coal (WHC) shares climbed by as much 9 per cent before finishing up 5 per cent after announcing a21 per cent quarterly increase in its run-of-mine production, and a 19 per cent quarterly lift in its total managed coal sales. WHC currently stands at a net cash position of $1 billion, and expects FY22 EBITDA to be around $3 billion.

Lynas Rare Earths (LYC) posted a 10.1 per cent quarterly decrease in its sales revenue, and announced a 26.2 per cent quarterly fall in its REO (rare earth oxide) production. LYC says that decreased production levels were on the back of ‘unpredictable water supply interruptions’. Shares were up by as much as 3.1 per cent, but receded to finish 0.7 per cent higher.

2.3bn shares were traded, worth $4.9bn. 847 stocks rose, 506 fell & 400 finished unchanged.

In the US, the NAHB housing market index is issued with capital flows. Bank of America, Goldman Sachs and IBM are scheduled to post quarterly earnings tonight.

Originally published by Divik Nigam – (Author), CommSec