market minute. tuesday
TRANSCRIPT
Market Update1
Australia stocks had a shaky start following a mixed session on Wall Street last night but it did
not take long before our market moved higher for the fourth consecutive day. The S&P/ASX
200 added 0.3% to 7,401 points. Technology stocks were in line with the Nasdaq’s
performance. Nearmap rose 3.4%. Miners retreated as commodity prices were generally
weaker overnight. The mining heavyweights BHP, Rio Tinto and Fortescue were down
between 1.7% to 3.0%.
The Aussie dollar was firmer at US$0.7450.
The SPI was up 0.1% at 7,366 points on the Sydney Futures Exchange.
ASX TOP 202
ASX 200 Index Attribution3
ASX 200 Best & Worst Performers4
ASX 200 Index
Source: IRESS
MARKET MINUTE. TUESDAY
19 OCTOBER 2021
BELL POTTER SECURITIES LIMITED [email protected]
WWW.BELLPOTTER.COM.AU ABN 25 006 390 772
AFS LICENCE NO. 243480
1. Bloomberg 2. Bloomberg 3. Bloomberg 4. Bloomberg
ASX Sectors
Source: Bloomberg
7370
7380
7390
7400
7410
10:00 11:00 12:00 13:00
BHP Group (BHP): $38.54, down $0.65 or 1.66%
BHP Operational Review For The Quarter Ended 30 September 2021
Note: All guidance is subject to further potential impacts from COVID-19 during the 2022
financial year.
We safely delivered reliable operational performance during the quarter as we
executed a series of planned major maintenance activities across our assets.
All production and unit cost guidance remains unchanged for the 2022 financial
year.
Our major projects under development are tracking to plan, with two new projects,
the Jansen Stage 1 potash project and the Shenzi North development project in the
US Gulf of Mexico, approved during the September 2021 quarter. The Jansen shaft
project is 96% complete, and the Trion oil project in Mexico moved into the Front
End Engineering Design (FEED) phase and is expected to progress to a Final
Investment Decision from mid-calendar year 2022.
The announced agreement to pursue a proposed merger of our Petroleum business
with Woodside to create a global top 10 independent energy company is
progressing to plan, with full form transaction documents expected in November
2021.
We announced our intention to unify our corporate structure under BHP’s existing
Australian parent company subject to final Board and other approvals. Unification
would create a simplified structure and enhance strategic flexibility. If approved,
unification is expected to occur in March 2022 quarter.
In Petroleum, the Calypso appraisal well Bongos-3 in Trinidad and Tobago spud on
27 July 2021 and encountered hydrocarbons. A side track is currently being drilled
to complete the appraisal.
In Copper exploration, BHP exercised its option to form an exploration joint venture
with Red Tiger Resources for the Intercept Hill copper project, which borders BHP’s
Oak Dam site in South Australia.
Group copper equivalent production decreased by 5% in the September 2021 quarter
following lower minerals volumes largely a result of planned maintenance.
Tabcorp Holdings (TAH): $5.10, down $0.13 or 2.49%
AGM
Trading update
I would now like to provide an update on trading for the three months to 30
September 2021. This information is unaudited and provided for information
purposes only.
Particularly given the extraordinarily fluid situation pertaining to COVID-19, it should
not be considered a forecast or market guidance.
Extensive COVID-19 restrictions had a significant impact in the quarter, with group
revenue down 7.3% on the pcp.
Lotteries & Keno revenue was down 0.2%. Lotteries revenue was up 1.4% due to
growth in Powerball and Saturday Lotto, and the lotteries retail network was not
materially impacted. Keno revenue was down 19.3% due to the adverse impacts of
venue closures.
Wagering & Media revenue, which was down 17.2%, was adversely impacted by
venue closures, partly offset by some transfer to digital.
There was a significant increase in wagering generosities and advertising in a highly
competitive and largely digital market. The increased generosity spend also had a
negative impact on variable contribution margin in Wagering & Media.
Operating expense growth was also impacted by increased technology investment,
including
improved disaster recovery capability.
Gaming Services revenue was down 14.6%. Venue closures continued to adversely
impact revenues and the business continued to provide fee relief to closed venues.
Gaming Services had significant operating expense growth given COVID-19 cost
mitigations in the pcp.
The Star Entertainment Group (SGR): $3.71, up $0.01 or 0.27%
Debt Covenant Support
The Star Entertainment Group Limited (The Star) has secured debt covenant support
from its financiers for the 31 December 2021 and 30 June 2022 testing dates.
The Star has received a full waiver of the gearing and interest cover covenants for
the 31 December 2021 testing date.
For the 30 June 2022 testing date, The Star will be able to annualise its 2H FY2022
earnings for the purpose of calculating its financial covenant ratios and it has also
received an amendment to the gearing and interest cover ratio metrics, which provide
additional headroom.
Other than these amendments, there are no material changes to margins or terms of
existing debt facilities.
Consistent with the June 2020 covenant waiver, a restriction on the payment of cash
dividends remains to the extent gearing (net debt / trailing 12-month statutory
EBITDA) is above 2.5 times. The amendments to the June 2022 covenants provide
The Star the flexibility to pay a cash dividend for the 2H FY2022 period provided net
debt to annualised 2H FY2022 statutory EBITDA is below 2.5 times.
52-WEEK HIGH/LOW REPORT
ASX Code Last Price Movement Year Low Price
ANN.ASX 3180.0 -9.0 3155.0
MCP.ASX 97.5 -2.5 96.8
DCG.ASX 31.5 -1.5 31.5
ASX Code Last Price Movement Year High Price
MQG.ASX 19295.0 252.0 19319.5 ALL TIME HIGH
ALQ.ASX 1379.0 18.0 1391.0 ALL TIME HIGH
PRU.ASX 170.5 -1.5 176.0
NCK.ASX 1420.0 23.0 1465.0 ALL TIME HIGH
IMD.ASX 283.0 2.0 286.0
MNF.ASX 708.0 9.0 710.0 ALL TIME HIGH
SHJ.ASX 134.0 2.0 135.0
RCT.ASX 299.0 12.0 299.0
SHORT POSITION REPORT
Aggregate short position per stock (greater than 5%)
ASX Code % Short Position (14 Sep 2021) %Short Position (05 Oct 2021) % Short Position (12 Oct 2021) Weekly Movement
FLT 10.79% 10.62% 10.17% -4.20%
WEB 9.64% 8.02% 9.34% 16.39%
KGN 9.24% 7.76% 9.25% 19.12%
MSB 8.46% 8.24% 8.97% 8.85%
EOS 8.76% 6.72% 8.70% 29.40%
Z1P 9.21% 8.44% 8.68% 2.82%
RBL 7.72% 7.00% 8.38% 19.70%
ING 7.99% 8.06% 8.21% 1.89%
COE 7.59% 5.43% 7.38% 35.88%
TGR 7.20% 5.12% 7.08% 38.20%
TPW 6.20% 5.21% 6.31% 21.03%
BHP 5.63% 5.92% 6.24% 5.31%
MTS 6.38% 6.31% 6.16% -2.30%
A2M 6.53% 6.10% 100.00%
PNV 5.78% 6.10% 100.00%
AMA 5.43% 6.77% 6.00% -11.29%
EML 5.77% 100.00%
OBL 5.65% 100.00%
BGL 5.11% 100.00%
KLA 5.03% 100.00%
PLL 8.21%
RSG 7.37%
AGL 6.34%
SOURCE: ASIC
GLOBAL UPDATES
Index Last Change % Move Comments
Japan Nikkei 225 29,104.0 78.5 0.27%
China Shanghai
Composite
3,568.1 0.0 0.00%
Hong Kong Hang Seng 25,486.5 76.8 0.30%
Singapore Straits Times 3,200.4 26.6 0.84%
New Zealand NZ Exchange
50
13,047.9 49.4 0.38%
US & UK Futures
US Dow Jones 35,069.0 -64.0 -0.18%
US S&P 500 4,473.0 -4.5 -0.10%
UK FTSE 100 7,177.5 -4.5 -0.06%
6. IRESS
DOMESTIC ECONOMIC DATA
No relevant domestic economic data today.
ASX 200 EX-DIVIDEND DATES
6
Security Ex-Dividend
Date
Amount Per
Unit (¢)
Franking (%) Books Close Pay Date
BOQ 28-Oct-21 22.0 100 29-Oct-21 18-Nov-21
BKW 2-Nov-21 40.0 100 03-Nov-21 24-Nov-21
SOL 19-Nov-21 36.0 100 22-Nov-21 14-Dec-21
PMV 5-Jan-22 46.0 100 06-Jan-22 27-Jan-22
LIC
Bell Potter’s Indicative NTA tracks the ‘indicative’ movement of a LIC’s underlying NTA each month by monitoring the
percentage movements of the disclosed holdings and using an index to track the movement of the remaining positions. The
Indicative NTA works best with LICs that have a high percentage of investments concentrated in its Top 20, regular disclosure of
its Top 20, lower turnover of investments, regular disclosure of its cash position and the absence of a performance fee. We have
also included an adjusted indicative NTA^ and adjusted discount^ that removes the LIC distribution from the ex-dividend date
until the receipt of the new NTA post the payment date. This report is published each Monday prior to the market open and is
available on a daily basis. Intraday indicative NTAs will be available on request through your adviser.
We have enclosed a reference page for dividends and historical pre-tax NTA performance data. We have used historical
dividend data for the dividend information and manager guidance where appropriate. The historical pre-tax NTA performance
data is updated monthly. Please note that historical performance is no guarantee of future performance.
Please be aware that our back testing indicates that this process is not without error and is clearly susceptible to higher turnover,
tax realisation and the receipt and payment of dividends. The average absolute movement in any month of the All Ordinaries is
3.2% with a maximum monthly rise of 8.1% and decline of 13.9% over the last 10 years. Overlaid with the compression or
expansion of the discount or premium to the underlying pre-tax NTA can make it difficult for the investor to appropriately evaluate
the LIC. Please refer to the attached PDF for additional data.
ECONOMIC WEEK AHEAD
COMPANY EVENTS
19 October 2021 20 October 2021 21 October 2021 22 October 2021 25 October 2021
AU RBA MEETING MINUTES (Oct)
US HOUSING STARTS (Sep)
Pre: 3.9%
US FED BEIGE BOOK AU WEEKLY PAYROLLS (Sep 25)
Pre: -0.7%
AU WEEKLY WAGES (Sep 25)
Pre: 1.5%
US EXISTING HOME SALES (Sep)
Pre: -2.0%
NZ CARD BILLINGS (Sep)
Pre: -14.3%
AU MARKIT SERVICES PMI (Oct)
Pre: 45.5
AU MARKIT COMPOSITE PMI (Oct)
Pre: 46.0
AU MARKIT MANUFACTURING PMI (Oct)
Pre: 56.8
US MARKIT MANUFACTURING PMI (Oct)
Pre: 60.7
19 October 2021 20 October 2021 21 October 2021 22 October 2021 25 October 2021
COH ORG WES CWY
AGM AGM AGM AGM
BAP ADH MGR ORE
AGM AGM 1Q 2022 Sales Qtrly report
BXB SUL APA EQT
AGM AGM AGM AGM
TAH SYD ORA EVT
AGM Sep. 2021 Sales AGM AGM
IEL AD8 PPT IAG
AGM AGM AGM AGM
CQE MYS CIM MP1
AGM AGM 3Q21 Earnings AGM
BHP ALX S32 SDF
Qtrly report 3Q 2021 Sales Qtrly report AGM
NST EVN ILU
Qtrly report Qtrly report Qtrly report
SGP OZL AIA
Qtrly report Qtrly report AGM
DXS DRR CLW
AGM AGM AGM
EBO FLT CWN
AGM AGM AGM
FBU SSM EDV
AGM AGM AGM
TRS HLS
AGM AGM
MFG
AGM
TCL
AGM
AMP
Qtrly report
MP1
Qtrly report
STO
Qtrly report
WPL
Qtrly report
TCL
3Q21 Traffic release
26 October 2021 27 October 2021 28 October 2021 29 October 2021 1 November 2021
MIN IGO NCM
Qtrly report Qtrly report Qtrly report
ALD BLD
3Q21 Profit Update AGM
RWC
AGM
FMG
Qtrly report
SYR
Qtrly report
SFR
Qtrly report
The following may affect your legal rights:
Important Disclaimer: This document is a private communication to clients and is not intended for public circulation or for the use of any third party, without the prior approval of Bell Potter Securities Limited. In the USA and the UK this research is only for institutional investors. It is not for release, publication or distribution in whole or in part to any persons in the two specified countries. This is general investment advice only and does not constitute personal advice to any person. Because this document has been prepared without consideration of any specific client’s financial situation, particular needs and investment objectives (‘relevant personal circumstances’), a Bell Potter Securities Limited investment adviser (or the financial services licensee, or the representative of such licensee, who has provided you with this report by arrangement with Bell Potter Securities Limited) should be made aware of your relevant personal circumstances and consulted before any investment decision is made on the basis of this document.
While this document is based on information from sources which are considered reliable, Bell Potter Securities Limited has not verified independently the information contained in the document and Bell Potter Securities Limited and its directors, employees and consultants do not represent, warrant or guarantee, expressly or impliedly, that the information contained in this document is complete or accurate. Nor does Bell Potter Securities Limited accept any responsibility to inform you of any matter that subsequently comes to its notice, which may affect any of the information contained in this document and Bell Potter assumes no responsibility for updating any advice, views, opinions, or recommendations contained in this document or for correcting any error or omission which may become apparent after the document has been issued.
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BELL POTTER SECURITIES LIMITED
GPO BOX 4718 MELBOURNE VIC 3001 AUSTRALIA
TOLL FREE 1800 804 816 [email protected] WWW.BELLPOTTER.COM.AU
ABN 25 006 390 772 AFS LICENCE NO.243480