There was plenty of excitement on the ASX, including a big retail deal, a major bank copping a spanking and a cannabis firm chair stepping down over an ASIC probe.
The Australian sharemarket went on another rollercoaster ride before finishing a fraction higher, with investors digesting a significant retail deal and plenty of drama, including a major bank copping a spanking.
The benchmark S&P/ASX200 index put on just 7.9 points to 7407.3, while the All Ordinaries Index firmed 11.4 points to 7736.9.
OMG chief executive Ivan Tchourilov said the choppy trade showed the local bourse had no clear direction.
“Iron ore continues to heat up, giving our materials sector a boost,” he said.
“Robust economic data out of the US points to a good finish for the year, with consumers determined to spend despite inflated prices.
“The (Wall Street) reaction overnight was relatively mute, though, with not much activity before the markets pause for Thanksgiving.
“It’s a similar story in Europe, however economists are also trying to calculate the cost of another Covid outbreak that could be brewing.
“We can only assume how devastating that will be.”
Rio Tinto gained 1.64 per cent to $96.63, BHP improved 0.99 per cent to $38.62 and Fortescue rose 1.76 per cent to $17.88.
Grange Resources was a standout performer, rallying 14.53 per cent to 67 cents.
The company is looking into using renewables-based hydrogen to replace natural gas for industrial purposes at its Port Latta iron ore pelletising plant in Tasmania, partnering with the state government, which Primary Industries Minister Guy Barnett mentioned in a statement on Thursday.
“Aside from resources, it was individual performances that paced the market,” Mr Tchourilov said.
The standout was EML Payments, which went gangbusters after the Central Bank of Ireland announced it would allow its subsidiary PFS Card Services to continue operating, rocketing 31.27 per cent to $3.61.
“PCSIL, which accounts for about 27 per cent of EML’s revenue, was stopped in its tracks shortly after being acquired by EML on the back of regulatory concerns,” Mr Tchourilov said.
“EML’s willingness to play ball with the central bank means they might be able to salvage the acquisition and recover revenues in the coming years. It seems that PCSIL has a chance to stay in the race.”
Wilson’s equities researchers, Ross Barrows and Cameron Halkett, said a considerable amount of risk remained for EML, but news flow over the past three months suggested the risk of investing in the company was “less than the uncertainty currently being reflected in the share price”.
The Reserve Bank of New Zealand handed down an independent report on Westpac’s risk governance in the country, saying it had highlighted material shortcomings in the board’s oversight.
“The role played by the board fell short of the standard expected of an organisation of the bank’s scope and scale,” the central bank’s Geoff Bascand said.
“In some cases, issues that had been acknowledged by the board for several years had not received due attention or effective remediation.”
It was one of two reports commissioned by the RBA NZ in March, with Mr Bascand saying it was concerned about ongoing compliance issues over recent years, most recently involving material failures to report liquidity correctly.
Westpac NZ’s new chair, Pip Greenwood, said the bank acknowledged “in the instances identified we fell short”.
Westpac shed 0.78 per cent to $21.63, ANZ slipped 0.87 per cent to $27.27, Commonwealth Bank gave up 1.45 per cent to $95.77 and National Australia Bank retreated 0.46 per cent to $28.32.
Medicinal cannabis company Creso Pharma fell 5 per cent to 9.5 cents after announcing chair Adam Blumenthal had stepped down after the Australian Securities and Investments Commission advised it was investigating suspected share trading contraventions by staff, agents and representatives.
“Creso Pharma appears to have become involved in the ASIC investigation because of common directorships between it and its corporate adviser, EverBlu Capital,” the company said.
Online-only retailer Kogan was hit by a “second strike” against its remuneration report at its annual general meeting but easily survived a board spill motion.
Shareholders were angry about overzealous stocking up after the initial pandemic-induced online shopping frenzy incurred big storage costs and sent the company’s share price into free fall.
Chief executive and founder Ruslan Kogan said inventory levels had since been “right-sized” and revealed the company had been developing its own “last mile” delivery service, which was in its early days but would be scaled up.
Kogan shares dropped 4.28 per cent to $8.49.
Homewares store chain Adairs announced it had inked a deal to buy omni-channel retailer Focus on Furniture, which operates 23 stores in Victoria, NSW, the ACT, South Australia and Queensland, for $80m in cash and shares.
“Focus builds out our product offering in the key area of home furniture and increases the exposure we have to that market by almost three times,” chief executive Mark Ronan said.
Adairs shares rose 4.09 per cent to $3.56.
Fisher & Paykel Healthcare gained 4.6 per cent to $32.30 after booking a first-half profit dip, but the interim dividend was up 6 per cent.
The company also said it expected to invest about $700m on land and buildings over the next five years, saying the infrastructure would support increased global physician awareness and experience with its therapies and products.
That was a result of Covid-19, as was a larger installed base of its hospital hardware.
Non-bank lender Pepper Money advanced 4.55 per cent to $2.30 after upgrading its calendar year profit guidance.
The Aussie dollar was fetching 72.03 US cents, 53.95 British pence and 64.2 Euro cents in afternoon trade.
Originally published as Drama-packed session on ASX, with bank spanked, cannabis company chair quitting and bedlinen retailer bulking on furniture
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