Afternoon Report / ASX grinds lower as we ease into another year, Energy up, Gold down (WPL, PTM)

By Market Matters 11 January 21

ASX grinds lower as we ease into another year, Energy up, Gold down (WPL, PTM)

Market Matters Afternoon Report 11th January 2021

WHAT MATTERED TODAY

A soft market today as the year got back underway and a few more traders lodged their feet under the desk, although volumes were light which is typical of this time of year. When that’s the case the market moves in a more exaggerated way, generally in the direction of the morning trend. Today that trend was down with selling broad based, the only sectors bucking the trend being energy and utilities while the high value IT stocks were the weakest link. Company news is thin on the ground this time of year so not a lot to go on today other than a couple of FUM updates from Magellan & Platinum – Harry covers off on those below.

Gold stocks were weak after prices pulled back on Friday – the mid-cap miners feeling some decent pain today: Westgold (WGX) -8.6%; Perseus (PRU) -8.1%; Ramelius (RMS) -6.7%; Gold Road (GOR) -6.6% the worst of them while Mesoblast (MSB) was the top performer after releasing results from its rexlemestrocel-L phase 3 drug trial in patients with chronic heart failure.

Asian markets were mostly lower across the board – Hong Kong the only market to buck the trend while US Futures were also trading down into our close.

The ASX 200 finished down -60pts / -0.90% to close at 6697. Dow Futures are trading off +172pts / -0.57% . 

ASX 200 Chart

ASX 200 Chart

CATCHING OUR EYE

Energy: The main sector to buck the trend today with Beach Energy (BPT) +0.78%, Santos (STO) +3.15% & Woodside (WPL) +2.62% - after a wild 2020, the swings in Energy markets have continued and last week we saw prices at their highest level in nearly a year at US$56/bbl, gaining 8% on the week. Prices have been supported by a number of factors, primarily Saudi Arabia’s surprise pledge on Tuesday to cut output through February and March while most OPEC+ producers will hold production steady during this period.  Adding further fuel to the fire has been a big increase in LNG prices through the Asian winter – well above consensus expectations, sort of smells a little like the Iron Ore market although clearly a few different influences / factors / complexities when it comes to Oil. We like energy into 2021 and the sector has enjoyed a good start to the year so far

Woodside (WPL) Chart

Magellan (MFG) +1.38% / Platinum Asset Mgmt. (PTM) +2.46%: battle of the fund flows today for two of the big managers. Magellan managed net inflows of $579m in December split fairly evenly between retail and institutional money though total FUM fell around 1.5% due to a surging AUD. On the other hand, Platinum saw net outflows for the month of $149m though the total under management grew on the back of decent performance, The tug-of-war between growth (MFG) and value (PTM) continues to play out between the two, though both were weak over the Christmas period despite the broader market trading largely sideways – the AUD clearly to blame here.

Platinum Asset Management (PTM) Chart

BROKER MOVES

·         Bega Cheese Raised to Buy at Bell Potter; PT A$6.20

·         Altium Raised to Hold at Bell Potter; PT A$32.50

·         Costa Cut to Neutral at Citi; PT A$4.30

·         Platinum Asset Raised to Neutral at Citi; PT A$3.90

·         Nuix Rated New Overweight at Morgan Stanley; PT A$11

·         EML Payments Rated New Outperform at KBW; PT A$4.75

OUR CALLS

No changes today

Major Movers Today

Have a great night

James, Harry & the Market Matters Team

Disclosure

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