All roads led to a rise on the ASX this morning, but such is the nature of the markets that by lunch time the rise had materialised only briefly and the ASX is, in fact, down.
Shares opened 0.3% higher with every sector higher except financials and materials. The energy sector was up 0.8% and real estate sector was up 1.65%.
However, by midday the S&P/ASX200 dropped 28.70 points or 0.39% to 7,342.10, despite crossing above its 125-day moving average.
The index has lost 1.36% for the last five days but sits 3.81% below its 52-week high.
The bottom performing stocks in this index are Insurance Australia Group Ltd down 6.51% and Whitehaven Coal Limited (ASX:WHC) down 4.58%.
On the flipside, Praemium Ltd (ASX:PPS) shares were 17.7% higher at $1.47 after it received and then rejected a takeover bid from Netwealth valuing it at $1.50 per share.
The acquisition would have created a superannuation dynamo, with $94 billion in superannuation and investment funds under management.
Westpac arrested some of its fall, down just 0.7% after yesterday’s 7.4% crash.
In response, Morgan Stanley (NYSE:MS) has downgraded Westpac shares to an equal-weight rating.
“In our view, the 2H21 result was poor and the FY22 outlook for both margins and expenses is far worse than expected,” Morgan Stanley said.
“We think this highlights the challenges of addressing 2015-2020 legacy issues: strategic inertia, weak franchise momentum, an incomplete integration of St George Bank, ineffective cost control, an inadequate risk culture and governance, and suboptimal capital management.”
Morgan Stanley cuts its valuation of the shares from $28.90 to $24.80.
The horse race that stops the ASX
The ASX’s dip this morning could be due to the Melbourne Cup.
There really is something to be said about a horse race that stops the nation.
It’s likely many of those who trade, have put their trading accounts aside and are getting ready for a punt on the runners.
Or they could be waiting for the RBA’s statement today, which is expected to leave interest rates unchanged despite higher inflation expectations and wage growth.
“Higher inflation expectations signal wages are accelerating at a faster pace than what the RBA thought,” said David Plank, ANZ’s head of Australian economics. “But the important piece of the puzzle is that while wages growth is picking up, it’s picking up to a level that’s well short of where it needs to be.”
Judo continuing to do well on listing
Judo Bank listed yesterday under the ticker code JDO.
It closed 6.6% higher as investors bought into the first bank to list on the ASX in 25 years.
The offer price was $2.10. It rose quickly closed to $2.26, with funds from the initial public offering raising $657 million.
Judo has been in operation for just six years.
Judo Bank chief executive and co-founder Joseph Healy said of the listing, “Banks are quite capital-intensive business, we have now raised $1.5 billion over the last few years but there comes a point that as you grow and you need to go back to the capital market it’s a lot easier to do that in the public market.”
Healy has a paper stake of $77 million and has railed against acquisition by a big bank.
“At a personal level the idea of being acquired by a big bank has never appealed to me,” Healy said.
“The company is now in the public market and in theory, anyone can buy stock in the company,” he said.
“The challenge my colleagues have is to run Judo really well and increase valuation so it becomes prohibitive for someone to buy us, that’s the only defence we have.”
Judo is currently trading at $2.38 up 5.31% today.
On the small cap front
GTI Resources Ltd (ASX:GTR) is up 6.90% and is now approved to drill at the Thor ISR Uranium Project in Wyoming’s Great Divide Basin.
Aurumin Ltd (ASX:AUN) is up 2.78%. AUN has kicked off its latest drilling campaign at the Mt Dimer Gold Project in Western Australia.
Latitude Consolidated Ltd (ASX:LCD) is up 2.17%, potentially off the back of its recent quarterly which shows a strong cash position of $7.8 million at the end of the September quarter, with the final assays from St Anne’s confirming the presence of very high-grade mineralisation.
archTIS Ltd is up 1.75% as its shares can now be traded on the US OTCQB market under the ticker ARHLF.
Cirralto Ltd (ASX:CRO) is up 1.67%. CRO has entered into an agreement with Chinese importer James Tyler for A$2 million in Buy Now, Pay Later (BNPL) funding per month to facilitate better trade partnerships between Australian fresh produce providers and Chinese retailers, targeting large chains like Aldi, Costa Coffee, Costco (NASDAQ:NA:COST) Wholesale, Starbucks and City Shop.