Energy stocks have driven the ASX down this morning.
The S&P/ASX200 dropped 23.20 points or 0.32% to 7,280.80. The index has lost 1.33% for the last five days but sits 4.61% below its 52-week high.
The bottom-performing stocks at time of writing were Magellan Financial Group Ltd (ASX:MFG) down 28.34% and CIMIC Group Ltd, down 15.11%.
Magellan this morning detailed the loss of a massive $18.6 billion major investment mandate with British wealth manager St James's Place.
“SJP’s mandate, which was a separate account and not an investment in any of Magellan’s retail global funds, represents approximately 12% of the group’s current annual revenues and is anticipated to have approximately a 6% impact on the revenues for the year ended June 30, 2022,” Magellan said.
Cimic fell on media reports of unpaid wages.
St Barbara Ltd (ASX:SBM)’s $157 million acquisition of Bardoc Gold Ltd (ASX:BDC) has seen it drop 6.8%, while Santos fell 4.9% as WTI crude fell 2% to $US69.43 a barrel after losing 2.1% on Friday.
Neutral rating for Afterpay and Zip
UBS has outlined a neutral rating for Afterpay and Zip following the US Consumer Financial Protection Bureau investigation into Buy Now Pay later (BNPL) practices.
Due to developments of regulatory intervention in Europe, Australia and the US, UBS has told clients, “While we see increasing regulation as a barrier to entry that may aid first-movers, we also see it as limiting the size of the sector relative to the status quo, as well as encouraging competition and transparency (eg the RBA's proposal to ban 'no surcharge' rules in Australia).
"Regulation is likely to impact the various BNPL companies differently depending on their business models and practices.
"For Afterpay, while the focus remains the proposed takeover by Block, with a credit impairment charge of ~17% in 2H21 (annualised) that was >50% higher than US credit card charge-off rates observed at the peak of the Great Recession, heightened credit checking requirements may help lower its experienced loss rates, however, they also may require stronger credit checking processes, which may impact top-line growth."
The UBS price target for Afterpay is $127 (currently trading at $84.57). The price target for ZIP is $5.20, higher than its current price of $4.20.
On the small cap front
Bardoc Gold Ltd (ASX:BDC) is up 13.41% after ASX-200 gold producer St Barbara Ltd (ASX:SBM) entered into a binding scheme implementation deed which will see St Barbara acquire Bardoc and consolidate gold assets in the Leonora region of Western Australia.
Golden Rim Resources Ltd (ASX:GMR) is 13% higher. GMR announced high-grade gold assay results from its second round of resource definition drilling at the Kada Gold Project.
Poseidon Nickel Ltd (ASX:POS, OTC:PSDNF) is up 6.59%. POS is encouraged by the latest batch of infill drilling assays from a program at its Silver Swan nickel camp in WA.
SenSen Networks Ltd (ASX:SNS, OTCQB:SNNSF) is 4.17% higher. SNS has been awarded a contract to supply its fuel theft reduction solutions to EG Group Australia (EG) fuel stations across Australia.
Greenland Minerals Ltd (ASX:GGG, OTC:GDLNF) is up 2.44%. GGG has met with Greenland’s Department of Mineral Resources and Justice to discuss the effect of the northern nation’s latest mining bill.