The ASX took a bath today.
The S&P/ASX200 dropped 150.20 points or 2.11% to 6,953.90, despite crossing above its 125-day moving average. Over the last five days, the index has lost 1.26% and 7.08% over the last 52 weeks.
Bottom-performing stocks in this index are PolyNovo Ltd and Chalice Mining Ltd (ASX:CHN, OTCQB:CGMLF) down 17.68% and 9.67% respectively.
PolyNovo continued its poor run from Friday when its shares slid 18%, with investors disappointed in another earnings loss. The company lost $800,000, but according to Bloomberg, analysts were expecting PolyNovo to achieve positive earnings before interest, tax, depreciation and amortisation of $1.6 million.
While the company’s shares continued to fall today, the biotech did achieve substantial revenue growth, up 42.8% to $41.9 million.
The outlook is also solid.
Chair David Williams told the AFR, “About 54% of our US sales staff have come on in the last year. If I employed you today, trained you up and then set you on the road, you probably wouldn’t get your first sale for six months.
“It’s because of that, we’re confident we’ll continue to see sales growth in the US, UK, Ireland, Australia and New Zealand.”
What’s making news
Australia’s slow EV uptake
Australia’s electric vehicle adoption lags well behind the rest of the world and government policy, particularly that of the former federal government, has come under heavy scrutiny from multiple actors.
That lack of direction (and fuel efficiency standards) has led several EV manufacturers to shun the country.
The Albanese government has a long road ahead to change perception.
Climate Change and Energy Minister Chris Bowen said: “The lack of such standards in Australia is cited as one of the factors impacting the supply and cost of EVs.
“Why? Because while Australia doesn’t show leadership, manufacturers prioritise markets which do.”
That sentiment is echoed by eToro analyst Josh Gilbert.
"While the US has just announced a generous subsidy on electric vehicles, Australia continues to struggle to attract global car manufacturers due to its comparably low efficiency standards. Without stricter fuel efficiency standards governing the amount of carbon emitted per kilometre, manufacturers see no benefit in cross-subsidising EV sales to sell their more profitable combustion engine vehicles.
"It’s not all bad news, though. EV Sales in Australia tripled in 2021, representing a significant increase and a step in the right direction, but from a very low base.
"This increase represents a 2% market share of all light vehicle sales, compared to 0.78% in 2020 of the total light vehicle market. Still, this is significantly lower than the UK (15%), China (21%) and global sales of (9%).
"Only time will tell if rising petrol prices and consumer demand motivate a change to efficiency standards and manufacturer attitudes towards Australia."
That time may be sooner than later.
Interest among the general populace is increasing.
The current government is changing the tune and has legislated to get rid of the 5% import duty on some EVs and lift the fringe benefits tax. It is also looking to spend $500 million on expanding the charging network and will work with states on subsidies and to harmonise EV incentives and policies.
Positive moves are being made, yet, the final problem holding back a proper transition, is, as alluded to above, a large supply crunch.
“We have tens of thousands of people on our expression of interest list, but no matter which way you carve up numbers like 68, we’re always going to be left with people who are, unfortunately, disappointed. This is what I’m funnelling back to the factory … the Australian market is starved for EVs,” said head of Hyundai Motor Company Australia’s Direct to Consumer division, Andrew Stamatakis,
Retail sales increase month on month
Australians spent a record $34.7 billion at retail stores in July, a $430 million increase on June and a 16.5% increase over the year, despite high inflation and interest rates.
According to the Australian Bureau of Statistics (ABS), retail sales climbed 1.3% last month.
ABS head of retail statistics Ben Dorber said turnover increased in five of the six retail industries.
“This shows that, despite cost-of-living pressures, households are continuing to spend,” Dorber said.
CreditorWatch chief economist Anneke Thompson said of the figures, "The monthly change in retail sales has settled down in the post-lockdown era when wild shopping trends turned the data on its head. However, smoother monthly changes in 2022 are currently well above the pre-COVID era.
"In the years prior to COVID, the monthly change in Retail Trade averaged around 0.2%. A stark contrast to 2022 month-on-month changes which have averaged 1.28%. A portion of this will be attributable to rising prices, but still, there appears to be a lot of ‘catch up’ spending underway by consumers, especially in the clothing, footwear and personal accessories and department store sectors.
“Overall, the news is still positive for businesses, as consumers have yet to shut their wallets. The retail trade data also reflects the relative confidence of business in NAB’s latest Business Conditions Survey, which strengthened in July. It does, however, strengthen the likelihood of a further increase in the cash rate after the RBA’s meeting next week, as they continue to work on cooling red hot demand."
There is no doubt the cash rate will increase.
“Momentum in retail sales looked to be faltering over the last few months, but today’s data are ahead of expectations and suggest household spending remains resilient to mounting headwinds,” BIS Oxford Economics head of macroeconomic forecasting Sean Langcake said.
The data will “do nothing to dissuade the RBA from raising interest rates by another 50 basis points at the September meeting.”
The five at five
Galileo Mining higher on uncovering massive sulphides at Callisto discovery
Galileo Mining Ltd (ASX:GAL) has completed five core holes at Callisto, where it’s on the hunt for palladium, platinum, gold, rhodium, copper and nickel mineralisation.
Elixir Energy enters lucrative LNG market with Queensland petroleum permit purchase
Elixir Energy Ltd (ASX:EXR) will continue to pursue its existing natural gas and hydrogen projects in Mongolia in parallel with the new asset, which it says will provide shareholders with an opportunity to profit from the rapidly changing international and local gas market dynamics.
Creso Pharma launches into US CBD market on completing Sierra Sage Herbs acquisition
Creso Pharma Ltd (ASX:CPH, OTCQB:COPHF) has completed its acquisition of Sierra Sage Herbs LLC (SSH), highlighting the company's maiden entry into the US CBD market.
Skyfii’s acquisitions and investments build scalable platform for profitable growth
Skyfii Ltd (ASX:SKF, OTC:SFIIF) CEO Wayne Arthur said: “FY22 has been a year of investment into our operating model and resource base as we scale our operations to deliver operating leverage in FY23 and accelerated, profitable growth in the years beyond.”
Matador Mining bolsters board with appointment of “respected and accomplished” mining executive
New non-executive director Kerry Sparkes joins Matador Mining Ltd (ASX:MZZ, OTCQX:MZZMF) with more than 30 years of extensive experience as a well-respected geologist and made major discoveries in Newfoundland and Labrador.
On your six
Bitcoin may be up and down but Lux Vending aka Bitcoin Depot, the world’s largest crypto ATM company, plans to go public.
Bitcoin Depot to take its crypto ATM business public through SPAC deal
Deal places a US$885 million post-transaction equity value on the company.
The one for good luck
Proteomics International Laboratories set to expand its commercial footprint in the US
Proteomics International Laboratories Ltd (ASX:PIQ) managing director Dr Richard Lipscombe introduces Proactive to its work in diagnostics, specifically in the area of precision medicine.