Weekly wrap: six days of gains as rate cuts outlook improves
WEEKLY MARKET REPORT
Expectations of central bank interest rate cuts drove global markets higher, carrying the Australian market up for its sixth straight day of gains.
Stronger than expected US retail spending prompted a solid day on Wall Street after retail sales data topped expectations and jobless applications were lower than expected.
That strength carried over on to the Australian market, which was also buoyed by a recovery in mining stocks which have been battered so far this year.
The ASX 200 rose 1.3% to 7971.1 points, with a 2.2% rise in the energy sector and a 2.1% rise in materials some of the highlights of a broad recovery.
One of the notable individual stocks trading on news was National Australia Bank (ASX: NAB), with its shares up a solid 1.5% to $36.48 after it posted a third-quarter cash profit of $1.75 billion that largely confirmed expectations.
Some analysts pointed to NAB competing more strongly to maintain its home loan share in the past month that might point to a future weakening of its net interest margin.
Poorer asset quality on business loans was also evident even though bad debt charges remained subdued.
Miners recover some ground
On the big mining front, BHP (ASX: BHP) shares charged up 2% to $40.01 a share, with Rio Tinto (ASX: RIO) shares up 1.6% to $110.09 and Fortescue Metals (ASX: FMG) shares were up 3.1% to $17.34.
The good run for online real estate advertising continued with online property portal Domain (ASX: DHG) shares up 6% after reporting good results while rival REA Group (ASX: REA) added 2.5% to reach a record high of $213.52.
It wasn’t such a happy story for the market operator, ASX Ltd (ASX: ASX) with its shares up just 0.1% to $64.06 after it reported a slightly lower underlying profit of $474.2 million on record revenues of $1.03 billion.
Small cap stock action
The Small Ords index rallied 3.29% this week to close at 3022 points.
ASX 200 vs Small Ords
Small cap companies making headlines this week were:
LiveHire (ASX: LVH)
Humanforce has made an unconditional takeover bid for LiveHire at $0.045 per share, following LiveHire’s search for a strategic investor or buyer.
Humanforce, which already holds a 19.99% stake, has been recommended by LiveHire’s board as the preferred option, offering a 75.8% premium on the stock’s recent average price.
If successful in acquiring 90% or more of shares, Humanforce plans to delist LiveHire from the ASX.
LiveHire’s board has expressed concerns about the company’s viability without the takeover, citing potential financial difficulties if the bid fails.
Humanforce, backed by US private equity, aims to leverage its resources to help LiveHire scale more effectively.
Latin Resources (ASX: LRS)
Pilbara Minerals has agreed to acquire Latin Resources and its Salinas lithium project in Brazil, aiming to enhance its portfolio with a significant increase in mineral resources and future production potential.
The deal offers Latin shareholders an immediate premium and a 6.4% stake in Pilbara, with the acquisition expected to add around 20% to Pilbara’s global mineral resources and 30% to its production.
Latin’s board has unanimously recommended the acquisition, and key shareholders, including José Luis Manzano, support the deal.
The acquisition will strengthen Pilbara’s position as a leading lithium supplier, providing opportunities to diversify into new markets like Europe and North America
Latin’s managing director, Chris Gale, will join Pilbara as a consultant to help transition the Salinas project.
OncoSil Medical (ASX: OSL)
OncoSil Medical has reported a 78% increase in the use of its OncoSil brachytherapy device for treating pancreatic cancer, marking significant growth in its adoption during the June quarter.
This surge, 2.7 times higher than the average usage in the previous quarters of FY2024, reflects the success of OncoSil’s strategic initiatives to expand market reach.
Managing director Nigel Lange highlighted that the increased demand underscores industry confidence in the device’s effectiveness.
The OncoSil device, approved in over 30 regions, is designed for delivering targeted radiation to inoperable pancreatic tumors, with successful initial treatments recorded in several countries, including a notable case in Türkiye where the device enabled a previously inoperable tumour to be surgically removed.
This development illustrates the potential of OncoSil’s technology to improve outcomes for pancreatic cancer patients.
Alligator Energy (ASX: AGE)
Alligator Energy has made a substantial uranium discovery during its maiden drilling program at the Big Lake project in South Australia.
CEO Greg Hall stated that this discovery is the first proof of concept for significant uranium within the Lake Eyre Basin sediments, marking the state’s first major greenfields uranium find since 2007.
The drilling revealed uranium mineralisation in palaeochannel sand units, with thicknesses up to 20 meters, which is promising for this style of mineralisation.
While the grades are still low, the discovery validates the uranium formation model developed by previous geologists, and there is potential for developing a new in-situ recovery (ISR) uranium field similar to the Curnamona province.
Alligator Energy plans to continue drilling, with further analysis and heritage clearances to follow.
LTR Pharma (ASX: LTP)
LTR Pharma has partnered with US-based Aptar Pharma to co-develop and commercialise LTR’s SPONTAN erectile dysfunction nasal spray in the US and other key markets.
The collaboration will leverage LTR’s pharmaceutical development skills and Aptar’s expertise in nasal spray technology to streamline the regulatory process and market entry.
Aptar’s support includes access to regulatory, testing, and human factors services to strengthen the FDA application for SPONTAN.
The agreement also establishes a long-term strategic alliance between the companies for future healthcare innovations.
Clinical trials have shown that SPONTAN offers faster absorption and quicker onset of action compared to traditional oral treatments, leading to its prescription in Australia under a special access scheme.
The week ahead
Central banks will remain in focus in the coming week with our own Reserve Bank releasing its August monetary policy meeting minutes on Tuesday.
The central bank has kept interest rates at a 12-year high of 4.35% for a sixth straight meeting, and came close to ruling out an interest rate cut this year, although many market analysts are saying a cut this year is still highly likely given falling rates around the world, including New Zealand.
US Federal Open Market Committee minutes will be released this Thursday and might add some detail to the indications by chair Jerome Powell that rates will fall in September.
Locally the fourth week of the profit results season will produce lots of individual stock moves and should keep the brokers busy updating their outlook for the announcing companies.
The other major announcement will be global purchasing managers indices which should give a good indication of how factory production is tracking.