The ASX All Ordinaries remained relatively stable during the week, making some last-minute gains today to rise about 1.48% over the last seven days, finishing the week out at 7,407 points as of writing.
The Small Ordinaries have been on a downward slide since Monday, approaching the lower end of its 52-week range, but managed to make up a little of that lost ground today to gain 0.71% and finish at 3,018.4 points.
In other market news, BetaShares will launch two new Exchange Traded Funds (ETFs) to the market in the coming months; a solar ETF providing exposure to solar manufacturers, inverter suppliers and solar tech, and a uranium ETF investing in miners, explorers, refiners and nuclear energy.
Energy and Materials were the sectors with the largest gains this last week, averaging out to 1.81% and 1.99% respectively, while Information Technology took the biggest hit, shedding 3.70%, although it rallied somewhat (0.88%) today.
Biggest annual increase in investment goods in 33 years (source: Commsec)
The Australian Bureau of Statistics (ABS) released data from a business survey today, revealing that the cost of investment goods – the physical goods that are used by a business to manufacture products – rose 2.2% in the quarter, up 6.6% on the year, the highest annual increase in over 33 years.
While a good indication that Australian businesses are investing in the future, high investment goods costs are a compounding issue in a high-inflation environment, where businesses show a greater tendency to kick the can down the road and pass extra expenses onto already struggling consumers.
The numbers support this grim prediction, indicating 38% of firms intend to increase the prices of their goods and services, although these percentages are mostly unchanged from the March survey.
Of that 38% of businesses intending to raise prices, 92% pointed to increased costs of products and services used by the firm, while 78% said rising fuel and/or energy prices were the main contributing factors.
Energy wholesale rates soar; Australians reduce non-essential power use
Spiking energy prices are also hitting the average Australian in the hip pocket, with new independent research commissioned by Money.com.au indicating that about half of Australians will be changing their power usage habits this winter to cope with rising prices.
- 51% of respondents said they would limit non-essential appliances used;
- 48% said they would only use appliances and power points when necessary; and
- 24% said they’d be shopping for better prices with a new provider.
New South Wales and the ACT were the most energy-conscious states, unsurprising given how much higher NSW’s energy prices are than most states, averaging $48 per megawatt more expensive back in April.
Australian Energy Regulator allows providers to increase prices
Prices also won’t be falling anytime soon, as the Australian Energy Regulator (AER) just recently announced it would allow energy providers to charge their customers 2.9% above inflation in NSW.
This means standing offer customers will cop rises of 8.5% to 18.3% in NSW, 11.3% to 12.6% in Queensland and 7.2% to 9.5% in South Australia.
AER chair Clare Savage said setting the default market offer (DMO) was not about setting the lowest price.
“In setting these new DMO prices, we understand the significant impact they will have on some consumers who may already be struggling with cost-of-living pressures,” Savage said.
“We are required to set a price that will allow retailers to recover their costs, earn a reasonable margin and support retailers to compete and offer better deals and products in a competitive retail environment.
“If a large number of retailers are unable to recover their costs and are forced to exit the market – as we have seen recently in the United Kingdom – that will add more cost to consumers.”
The regulator pointed to higher coal and gas prices, – partially due to the winding down of hydrocarbon-based generators without a similar uptake in new energy sources – the war in Ukraine and extreme weather as the core reasons prices were on the rise.
State and Federal governments attempt to ease the pain
Various state governments are offering relief to Australians in the face of these rising costs, with NSW offering up to $1,600 a year to 50,000 low-income households, Queensland announcing a $175 rebate, and Victorians to receive a one-off $250 cost-of-living payment to help with energy bills.
Western Australia is offering one million citizens a $400 credit, while pensioners, seniors, veterans, and low-income earners in South Australia will receive a $233 rebate.
Tasmania made no direct offer of support but has allocated $186 million in its state budget to help concession card holders manage power costs.
Federal Energy Minister Chris Bowen laid the blame on "nine years of Liberal denial and cost" and suggested Angus Taylor, the former Federal Energy Minister, had sat on the regulator’s report during the election campaign.
“There are international factors at play here ... but the lack of energy policy, the lack of investment in new energy, the lack of investment in renewable energy, and the lack of transmission over the last nine years means that Australians are paying more for electricity than they should be,” Bowen said.
“The good news is that the Australian government will now have a policy to see power prices fall through investments in renewable energy, the cheapest form of energy. That's the better news for the Australian people.”
Small cap wins for the week
Galileo Mining Ltd (ASX:GAL) made some huge gains recently, rocketing to an all-time share price high of $1.68 after gaining an incredible 740% since May 10, 2022, including a 55% bump since Friday last week after the company announced it had found rhodium in drill assays at the Norseman Project in Western Australia. Rhodium is the rarest and most valuable precious metal on earth, far outstripping gold and silver.
Discovery Alaska Ltd (ASX:DAF) continued its upward lithium-based momentum from last week, reaching a 10-year share price high of $0.11 on Monday, up 69.3% on the previous close.
DAF shares have since fallen to a more modest $0.075, but show no sign of faltering just yet, having gained a further 5.63% today.
Imugene Ltd (ASX:IMU, OTC:IUGNF) was featured in the mainstream news after dosing its first participants in a Phase 1 trial to test the cancer-killing oncolytic virus VAXINIA against solid tumours, gaining 17% to sit at $0.24 on Tuesday before falling back to $0.193 today.