Weekly review: Aussie shares hold firm after $322 billion Facebook meltdown

WEEKLY MARKET REPORT
Australian shares managed to hold the line against an amazing fall on Wall Street which saw Facebook – now called Meta – lose $322 billion after slumping by 27%.
The Facebook plunge happened after it revealed that user growth had stalled and it faced higher costs and weaker revenue, causing technology shares around the globe to drop.
While the plunge caused Facebook founder Mark Zuckerberg to personally lose $33.6 billion almost instantly, the Australian market proved to be resilient to the tech slump, with the ASX 200 rising 0.6% or 44.2 points to reach 7120.1 points by Friday’s close.
US futures were up on the back of price rises for Amazon after a very strong quarter, perhaps instilling confidence for Australian traders that Wall Street would do well when it re-opened.
Boral’s understandable slump
Australia did have its own mini version of the Facebook crunch with building products group Boral (ASX: BLD) falling a whopping 41% to $3.85 to hit a 17-month low, but the move was not nearly as surprising as it seemed.
Boral started trading ex-dividend and ex-capital return, which will see eligible shareholders get a total cash distribution of $2.72 per share, made up of a $2.65 per share equal capital reduction and an unfranked dividend of $0.07 per share, together worth more than $3 billion.
Australia pushing up the ASX 200 was a solid achievement given the Dow Jones Industrial Average had fallen 1.5%, the S&P 500 2.4% and the tech-dominated Nasdaq 3.7%.
News Corp jumps on more subscribers and strong advertising
Another individual company that did well was News Corporation (ASX: NWS) with shares up 5.7% to $33.38 after recording record revenues and the highest profit since the company was formed in 2013 in the December quarter.
News Corp said the growth came from all revenue streams including real estate, advertising, and recent acquisitions, with digital real estate revenues up 35%.
News’ media operations were buoyed by a rebounding advertising market plus new content licencing revenues and strong subscriber gains.
Looking at its streaming services, News Corp’s Foxtel subscribers grew by 66% against the same quarter last year with both BINGE and Kayo reaching more than 1 million total subscribers.
The Dow Jones also saw “its highest quarterly since its acquisition and highest revenue since fiscal 2011”.
News’ profitability for the first half of FY22 was up 30% year on year to almost $1 billion.
Aussie tech stocks hold firm
Perhaps surprisingly given the bad news for Facebook, Australian technology stocks enjoyed their biggest weekly gain since December while rising energy stocks also boosted the market on Friday.
Reserve Bank Governor Dr Philip Lowe’s speech during the week certainly calmed markets, with his cautious stance on raising interest rates and insistence that it is too early to tell if inflation is sustainably within the target range.
Backing up Dr Lowe’s bullish stance was the RBA’s statement on monetary policy on Friday which also predicted a strong economy.
Energy stocks rose all week with the sector adding almost 5% with rising energy prices pushing up shares in Woodside Petroleum (ASX: WPL) 1.1% and Santos (ASX: STO) by 0.95%.
South32 (ASX: S32) shares also jumped 3.3% on Friday.
Small cap stock action
The Small Ords index rallied 3.42% for the week to close on 3279.5 points.

ASX 200 vs Small Ords
Small cap companies making headlines this week were:
Vonex (ASX: VN8)
Amid Australia’s rapidly expanding telecommunications industry, Vonex has posted a 67% increase in revenue to $14.94 million for H1 FY2022, with this momentum expected to continue as the company pursues organic and inorganic growth opportunities.
Boosting the business was the acquisition of Direct Business in August last year and the takeover of Voiteck last month.
Vonex plans to continue disciplined merger and acquisition opportunities throughout FY2022 and FY2023, while also increasing sales through existing channels.
Sparc Technologies (ASX: SPN)
Sparc Technologies has partnered with Fortescue Metals Group’s (ASX: FMG) green energy spin-off Fortescue Future Industries (FFI) to develop green hydrogen technology.
The companies will form joint venture entity Sparc Hydrogen, which will develop and commercialise technology developed by the University of Adelaide and Flinders University.
This next generation technology can produce green hydrogen using sunlight and water, which will also have lower capital and operating expenditures compared to other forms of hydrogen production.
Shree Minerals (ASX: SHH)
Technical studies have identified gold and lithium at Shree Minerals’ Dundas project in Western Australia’s Albany-Fraser Orogen.
Shree executive director Sanjay Loyalka says the studies have “significant implications” for additional discoveries across the tenements, which are in an underexplored region that hosts Liontown’s Buldania lithium project only 25km away.
Mr Loyalka added Buldania resembles the same settings within Shree’s tenements, with its Dundas project comprising two exploration licences and one under application.
Melbana Energy (ASX: MAY)
Impressing investors this week was Melbana Energy, which announced strong oil shows and elevated gas readings while drilling the Alameda-1 exploration well within its Block 9 area in onshore Cuba.
Drilling at Alameda-1 has reached 3,200m with the oil and gas identified within the first primary targets referred to as the N sheet.
Once drilling is complete, Melbana will undertake wireline logging.
Wellnex Life (ASX: WNX)
Revenue has continued growing for Wellnex Life, despite difficult conditions brought about by COVID-19.
For the December quarter, Wellnex revealed revenue of $8.8 million, which was 18.5% higher than the previous corresponding period.
Margins also increased to about 33%, and the company also secured $1.6 million in purchase orders for its liquid paracetamol, which will be invoiced in H2 FY2022.
E2 Metals (ASX: E2M)
Argentina focused explorer E2 Metals has uncovered up to 19,381g/t silver while drilling at the Malvina prospect within its Conserrat gold and silver project.
The bonanza silver was part of a 1m interval that also returned 66g/t gold – resulting in 343g/t of gold equivalent.
E2 Metals managing director Todd Williams said this type of high-grade mineralisation rarely occurs in isolation, with the company currently drilling to discover more mineralised shoots in adjacent structures.
The week ahead
Company results will be an important indicator for the coming week with Commonwealth Bank’s result coming on the back of some good numbers from Westpac.
Other companies with results due that will be worth watching include Argo Investments, Shopping Centres Australasia, Suncorp, AGL Energy, AMP, Mirvac, CIMIC, ASX, Downer EDI, Insurance Australia and Baby Bunting.
There is no shortage of statistical releases either, including December retail spending, consumer and business sentiment, job advertisements, household spending intentions, payroll jobs and wages and building approvals.
Together, these results should give some clues to how the Omicron COVID-19 wave has hit consumer spending and confidence.
Looking overseas, US inflation data will be the big one to watch for with other US releases including consumer credit, chain store sales data, mortgage applications, unemployment claims and consumer sentiment.
Taken together, these releases should show whether the job market remains tight and consumers very nervous about hefty inflation and the Omicron wave.
In China the main event is the release of the purchasing managers’ index for the services sector.