Weekly review: Local market fails to rise five days in a row

ASX 200 January 2019 stock market weekly review Local market
WEEKLY MARKET REPORT

The Australian share market just failed to match Wall Street and make it five up days in a row, finishing off the week with a 20.7 point slide on the ASX 200.

All told, it was still a positive week after the torrid falls in late 2018, with the ASX 200 adding 1.61% for the week to close out at 5,774.6 points.

The market was up Friday morning but lost steam in the afternoon, falling below the 5,800 mark as buyers went home early for the weekend.

Retailers rally

One of the big highlights for the day was a recovery in the retail sector following an unexpectedly strong 0.4% rise in retail sales for November – an improvement on analyst estimates of 0.3%.

That prompted a rally in the shares of many retailers, including JB Hi-Fi (ASX: JBH) which rose 2.57% or $0.54 to $21.58, although Harvey Norman (ASX: HVN) and Kogan.com (ASX: KGN) bucked the trend with falls.

Even troubled department store chain Myer (ASX: MYR) was up 1.27% to $0.40 and Treasury Wine Estates (ASX: TWE) added $0.605 or 4.25% to reach $14.85.

Treasury reverses losses

That recovery by Treasury came after it issued higher profit expectations followed a nasty slump on Thursday on the back of weaker sales expectations from US drinks giant Constellation Brands.

It was the heavyweights that eventually dragged the bourse lower with weaker prices from Westpac (ASX: WBC), Commonwealth Bank (ASX: CBA), BHP Group (ASX: BHP) and gold stocks overwhelming earlier optimism around the US-China trade dispute.

BHP continued to weigh on the market after trading without its special dividend which is due to be paid to shareholders later this month.

Small cap stock action

The Small Cap index was up 1.21% for the week to close at 2,501.3 points.

ASX 200 vs Small Cap index January 2019 bounce
ASX 200 vs Small Cap index

News flow has started to pick up in 2019 with some of the companies delivering noteworthy news being:

Kirkland Lake Gold (ASX: KLA)

Canadian producer Kirkland Lake Gold’s world-class Fosterville gold mine in Victoria has been cited as the main driver behind record gold production figures released this week for the last quarter and 2018 full year.

Fourth quarter figures were 28% higher than the previous quarter and 39% higher than the corresponding 2017 period, while full-year production was up 21% from the year before.

Fosterville increased production during the quarter by 57%, reflecting an average grade of 39.7 grams per tonne of gold.

The company’s Macassa, Taylor and Holt mines in Canada also made significant contributions to the record figures.

Nuheara (ASX: NUH)

Australian hearing aid supplier Nuheara has had a big week, unveiling the most powerful device in its flagship IQbuds range and launching the IQconnect “hearing screening kiosk” to assist sales for its retail distributors.

It also launched IQstore as the world’s first subscription-based hearing service, with initial apps including Soundscape for sleep support and tinnitus masking, and Autocros for those with unilateral hearing challenges.

“We are absolutely committed to democratising hearing healthcare for the millions of consumers who need hearing support and are currently priced out of purchasing hearing assistance on products which often don’t meet all their needs,” said Nuheara chief executive officer Justin Miller.

Pursuit Minerals (ASX: PUR)

Brisbane-based Pursuit Minerals will embark on a scoping study for its Koitelainen Vosa prospect in northern Finland after the re-sampling of 11 historical drill-holes confirmed the presence of high-grade vanadium magnetite concentrates.

The company remains bullish on the commercial potential for Koitelainen Vosa and the market fundamentals for vanadium.

Meanwhile, Pursuit’s four directors have made a financial investment in the company, reflecting their endorsement of the vanadium project portfolio.

The directors were issued with a total 7.3 million shares and 2.4 million options at $0.037 per share, equating to a $270,000 investment.

Esports Mogul (ASX: ESH)

Earlier this week, Esports Mogul added six of the world’s most popular console titles to its game catalogue under the umbrella of a new Asia-focused tournament series known as Silver Slam.

The new titles will be available via the flagship eSports platform Mogul.gg and include Fortnite, Call of Duty: Black Ops 4 and 2018’s best-selling sports game NBA 2K19.

Esports Mogul managing director Gernot Abl said being able to offer some of the biggest console games will extend Mogul.gg to a new demographic of users.

Pure Minerals (ASX: PM1)

Aspiring battery metals producer and Pure Minerals’ future subsidiary Queensland Pacific Metals strengthened its business ties with China this week when it signed an agreement with commodity trader Top Resources to establish potential investments and offtake agreements in the region.

Top Resources is headed by experienced commodity trader Norman Ting, previously linked to London-based trading house and Chinese market specialist Wogen Resources.

QPM is a private Australian entity looking to develop a refinery in Townsville to produce nickel and cobalt sulphates for the battery industry.

Authorised Investment Fund (ASX: AIY)

Investee company of Authorised Investment Fund, Aenea Cosmetics, has continued its rapid growth in the epigenetics space.

This week Aenea announced the signing of its new brand ambassador in the United States, self-made multi-millionaire real estate tycoon Dottie Herman.

Mrs Herman is the president and CEO of the third largest real estate firm in the US and has an estimated net worth of $375 million.

Seen by many as a positive role model for women, the move is likely to draw the attention to Aenea’s luxury cosmetics range to aspiring women in the country.

In addition, Aenea has received recent press coverage from the Financial Times, The Telegraph, luxury magazines in both the US and UK, and this week was featured in Town and Country magazine which boasts a circulation of 1.5 million readers.

The week ahead

There are a few reads on Australia’s economic performance coming up this week.

Among a fairly busy roster of releases, there are indicators spanning a variety of topics including building activity, housing finance, tourism, credit and debit card lending and consumer confidence.

It is also a fairly busy time on the US and Chinese economic calendars, with China changing the order in which it releases some of its data.

This week we get to see international trade, lending figures and house prices, with economic growth numbers on hold until 21 January.

For the US, there are several indicators including retail sales, housing starts, export and import prices and producer prices to look out for.

As usual, the focus will be on any signs of sliding growth and trade in both the US and China.

Weekly top stocks

John is a highly experienced business journalist and formerly chief business writer for the Herald Sun. He has covered Federal politics in Canberra, was Los Angeles Bureau chief for News Limited and was also chief of staff for the Herald Sun. He has covered a wide range of small and large cap ASX stocks and has a special interest in mining, technology and biotech.