The ASX closed lower today.
The S&P/ASX200 shed 0.21% or 15.00 points to 6,983.30 – setting a new 20-day low. The index has been essentially flat over the last five days but has fallen 6.20% in the year to date.
Most sectors fell or finished flat, but Information Technology (+1.46%), Financials (+1.00%) and Communication Services (+0.64%) bucked the trend.
The best performers were Clinuvel Pharmaceuticals (ASX:CUV) Ltd, which gained 17.2% on the back of strong 2022 financial results, and Tyro Payments Ltd, which has gained 10.0% for similar reasons.
On the downside, betting companies lost out with Pointsbet Holdings Ltd dropping 12.46% and Tabcorp Holdings shedding 5.69%.
Commodities fell across the board, with West Texas Intermediate crude oil taking the biggest hit (-4.82%) and tin not far behind (-4.67%).
Making news today
Housing construction costs jump $80,000 in two years
Data from the Australian Bureau of Statistics (ABS) has underscored skyrocketing house construction prices over the last two years, which have climbed an average $80,000 since the pandemic began as the sector was hammered by rising material costs, supply chain delays and COVID-related labour shortages.
The cost of building a new house has risen to an average $400,000 but those numbers don’t take into account the growing number of Australians who have paid for houses that will never be built.
Something of a ‘construction crisis’ has engulfed Australia over the last few months, as huge building companies are forced into administration and liquidation still owing millions to potential homeowners, suppliers, workers and subcontractors.
More than 16 construction companies have gone under in recent weeks, and they won’t be the last.
Industry market researcher IBISWorld has forecast a 9% drop in home building firms over the 2022-23 year, contracting for the first time in a decade “by thousands”.
KPMG Australia chief economist Dr Brendan Rynne warns that a fall in housing supply will hit renters hard.
“On the one hand, this will put upward pressure on rents and the consumer price index, which will be of concern to the Reserve Bank of Australia as it considers how far interest rates need to rise to get inflation back into the target range,” Dr Rynne said.
“On the other hand, the lack of supply will support dwelling prices in the face of rising interest rates and underpin a turnaround in dwelling prices at some point in the future.”
ACCR takes Santos to court
Santos has been accused of ‘greenwashing’ by shareholder activist group the Australasian Centre for Corporate Responsibility (ACCR) and will face court over allegations of engaging in “misleading or deceptive” conduct relating to its "clean energy" claims and its net-zero plan in its 2020 annual report.
The case was launched in the Federal Court last year but has since been expanded to include comments made during a Santos investor day briefing and in its 2021 Climate Change Report.
Greenwashing is the practice of misleading consumers with deceptive marketing practices to imply a product or company is more environmentally friendly, ethical or sustainable than it really is.
This case – challenging the truth of a gas company’s net-zero emission claims – is one of the first of its kind in the world.
Despite the controversy, Firetrail Investments portfolio manager Blake Henricks has tapped both Santos and Origin Energy as BUY picks based on soaring gas prices.
“[Santos is] 90% gas and we know what’s happening in Europe – they’re trying to get their hands on as much gas as possible,” Hendricks told a conference hosted by Ian Macoun’s Pinnacle Investments, which counts Firetrail as an affiliate manager, on Wednesday.
“It’s well positioned excluding the war in Ukraine, this energy crisis is borne out by a lack of investment since 2014. It’s not six months of investment to fill, it’s years to fill any gaps left by Russia on the energy side.”
ASIC recently announced its intention to create – and enforce – standards for governance, transparency and disclosure in relation to ‘sustainable finance’.
The financial regulator has confirmed it has begun investigating several listed entities, super funds and managed funds for potential greenwashing.
“The climate crisis requires everyone to take credible action … there is no room for exaggerating claims about decarbonisation in this moment,” ACCR executive director Brynn O'Brien said.
"Investors have an expectation of accurate information going into the market, investors are making billion-dollar investments in companies on the basis of information they put out.
"So, optimism is one thing, but misleading the market is another. It is our allegation that Santos, in these statements, has engaged in misleading or deceptive conduct."
The Five at Five
C29 Metals gets to work after completing Mayfield Copper Project acquisition
C29 Metals Ltd (ASX:C29) will begin exploration at Mayfield immediately with geophysical surveys planned this calendar year.
Castillo Copper advances Broken Hill REE prospects; two contractors appointed to lead Q4 campaign
Castillo Copper Ltd (LSE:CCZ, ASX:CCZ) will assay for rare earths at its Sisters and Iron Blow prospects in the hopes of harnessing the opportunity presented by Australia's preferred status as a supplier of critical minerals to the US.
Krakatoa Resources hits several thick mineralised pegmatite complexes at King Tamba
Krakatoa Resources Ltd (ASX:KTA) has delineated several mineralised pegmatite swarms with best results so far assaying at 5,580 parts per million (ppm) rubidium, 3,940 ppm lithium, 754 ppm caesium, 229 ppm niobium and 352 ppm tantalum.
OzAurum Resources' strong gold results further extend Demag Zone discovery
“The RC and diamond holes drilled at the new virgin gold discovery Demag Zone have continued to intersect significant gold mineralisation, further validating the potential of the Mulgabbie Project to host a significant gold discovery,” said OzAurum Resources Ltd (ASX:OZM) CEO/MD Andrew Pumphrey.
Firefinch boosts Morila Gold Deposit resource by more than one million ounces to 3.3 million
Firefinch Ltd (ASX:FFX) has achieved a 52% increase in the total contained ounces for the Morila Deposit and an increase of 136% in ounces within the higher confidence measured and indicated categories.
On your six
Reconciliation and mining: a seat at the table
Partnership with Traditional Owners is the way forward for mining companies.
One for good luck
FBI warns investors of increasing crypto theft on DeFi
Between January and March 2022, cybercriminals stole $1.3 billion in cryptocurrencies, almost 97% of which was stolen from DeFi platforms, according to the US blockchain analysis firm Chainalysis.