• ASX dipped early but looks to be on the mend shortly after lunch
  • Alan Joyce set to lose $9.2 million in the wake of a scathing report from Qantas
  • Small Caps news is a little thin on the ground, but there are some decent gains around

 

Local markets fell early this morning, after Wall Street staged a late collapse to end its session in the red overnight.

The benchmark has been see-sawing a bit this morning, moving sharply a few times and at midday was in the middle of an upswing that drove the ASX 200 to -0.49%, with the banks doing best on the bourse.

Shortly after midday, though, there was a change in fortunes and the benchmark seemed to be making its way towards a positive result. Yep, checking it one last time before we hit publish, it’s now in the green: +0.023%.

There’s other news around the place, but I’ve been captivated this morning by the headlines emanating from Qantas – former CEO Alan Joyce has had his golden parachute savaged to the tune of $9.2 million, and a new governance report explaining it is not a flattering read.

Let’s dive in.

 

TO MARKETS

Market sectors are mixed this morning, as the benchmark struggles to figure out if it’s winning or losing the battle today.

The ASX 200 opened lower on the heels of a late downturn on Wall Street that left the major indices there lower for the session, undoing early gains, and since 10:00am today the local sectors have been somewhat mercurial.

At midday, the sectors looked like this:

 

Via MarketIndex

 

The resources sector is taking a beating today, after iron ore prices fell again. Last time I looked, the SGX TSI Iron Ore Futures index – which I have been assured is the one all the cool kids are looking at – was down 1.13% to $99.80/tonne, back to levels we haven’t seen since April of this year.

That’s likely the cause of a broad sell-off at the tubby end of the Materials market, which has left BHP down 2.12%, Rio down 2.55% and Fortescue off by 0.98% – with a similar storyline running right through the majors in the sector.

The happier news is coming from the banks this morning, which are up 0.32% – but that’s the only ASX index that’s showing any signs of positivity this morning.

 

Via MarketIndex

 

From around the market, we’re getting into the swing of earnings season today, and there will be a few big names reporting in on how things have been going, including AMP, Mirvac, NexGen Energy, Piedmont Lithium, and Transurban.

AMP has already delivered its report, and it’s a banger for the beleaguered company, which has reported that its H124 NPAT is up 5.4% to $118 million, with controllable costs down 6.4% to $339 million, and on track to meet the company’s FY24 target.

This has made investors happy, and AMP’s price was up more than 9.0% at lunchtime.

The headlines are dominated by talk about Qantas today – specifically, a governance report that has painted a highly unflattering picture of former CEO Alan Joyce.

The report, which dropped about 90 minutes before the market opened this morning, is an unusually frank peek behind the curtains of Joyce’s time at the helm of the national carrier, and it reveals some particularly dirty laundry, in support of the company’s decision to dock Joyce and the broader executive team an enormous slice of their combined pay.

Joyce has been slugged hardest, and will forego $9.26 million, while the rest of the executive combined has been pinged $4.1 million, for a series of failings that have dragged the company’s reputation into the doldrums.

The highlights (or lowlights, depending on whether you’re Alan Joyce) are pretty brutal, describing what sounds like an incredibly toxic work environment characterised by open conflict, raised voices and a CEO who was not a fan of being told “no”.

The report takes aim at – among other things – the company’s “top-down leadership with a dominant and trusted CEO, leading to insufficient listening and low speak up”.

It also points at “the Board’s mode of engagement with management [which] did not always achieve the right balance between support and challenge”.

And, as anyone who’s ever written about Qantas before would well know, “external communications were at times combative which exacerbated issues”.

The entire report is definitely worth a read, covering the litany of issues and scandals that plagued Qantas over the past few years, including its illegal sacking of a huge chunk of its workforce, the so-called “ghost flight” scandal and the systematic failures that tarnished the company’s reputation here, and internationally.

Investors have taken a lot of what the report contains to heart, and at lunchtime, Qantas shares are down 1.68%.

And on that note, let’s take a brief look overseas to see what’s happening, before I write something dumb and get into a lot of trouble.

 

NOT THE ASX

After rising nearly 2% earlier in the day, the S&P 500 ended the session down by 0.8%. The blue chips Dow Jones index fell by 0.60%, and the tech-heavy Nasdaq retreated by 1%.

The rapid slide in US stocks was triggered by a lacklustre US$42 billion Treasury sale as investors shunned the 10-year US bond auction, Eddy Sunarto reported this morning.

In US stock news, Walt Disney fell 4.5% after releasing a mixed Q3 report. While the company reported its first strong profit from streaming, it also struggled with issues at its theme parks.

Shopify jumped 18% after it reported Q2 sales and profits that exceeded analysts’ expectations, proving that the Canadian e-commerce company is handling slow consumer spending well.

Boeing dropped 1% after it revealed plans to redesign a fuselage part that detached from a new 737 Max 9 in January, as it works to recover from the crisis.

Rivian Automotive‘s stock fell 7% after it kept its full-year production target the same as last year. Despite a plant shutdown, the CEO expects output to increase in 2025.

And Novo Nordisk also dropped 7% after reporting weak sales of its popular weight-loss drug Wegovy, as it faces increased competition in the growing market.

As Eddy has also pointed out, there’s been movement at fund manager Cathie Wood’s ARK Innovation ETF, which bought the dip on a range of Big Tech stocks to take advantage of the recent volatility.

But, Woods’ fund is still – by any reasonable measure – in a bad way. From its peak in early 2021, it’s down about 75%, and down about 20% so far this year.

In Asian markets today, it’s a muted mix bag from our neighbours. The Nikkei is up 0.17%, the Hang Seng has added 0.24% but Shanghai markets are off by 0.26% in early trade.

And the good folks at the Dar Es Salaam exchange in Tanzania are enjoying a well-earned day off, as the market there is closed for Farmer’s Day, which sounds like something’s been lost in translation, but almost definitely isn’t.

 

ASX SMALL CAP WINNERS

Here are the best performing ASX small cap stocks for 08 August [intraday]:

Swipe or scroll to reveal full table. Click headings to sort:

Wordpress Table Plugin

 

Ovanti (ASX:OVT) was climbing this morning after delivering an update on some allegedly embezzled funds, revealing that court action is looming to recover approximately $6.5 million that the company has identified as missing, with a further $15.9 million in transfers out of its Malaysian subsidiaries that are being investigated.

Heavy Minerals (ASX:HVY) was up on news that the company has executed a Royalty agreement with Campbell Transport raising $1.25M adding to the previously raised $850K from professional and sophisticated investors. The company says it is also awaiting funds from an additional $170K of pending subscriptions, and that it has sold a combined 1.05% Royalty on potential future Gross Production Revenue at its Port Gregory project.

And Riedel Resources (ASX:RIE) was climbing at lunchtime today after announcing that David Groombridge will retire as chief executive officer of the company, with effect from 2 November 2024.

 

ASX SMALL CAP LOSERS

Here are the most-worst performing ASX small cap stocks for 08 August [intraday]:

Swipe or scroll to reveal full table. Click headings to sort:

Wordpress Table Plugin

 

ICYMI – AM EDITION

Greenvale Energy (ASX:GRV)

The company has secured a six-month permit extension that will enable regulatory approvals to be finalised for its current Year3 work commitments at EP145 – the West Walker helium project – in the NT.

The approval from the NT Department of Industry, Tourism & Trade provides Greenvale with additional time to complete the permit work program after it identified potential delays in obtaining the required environmental approvals for the planned Wild Horse 2D Seismic Program at the project.

The approval for the permit extension means that Greenvale will now have until 21 February 2025 to complete the acquisition of a 100km 2D seismic survey, seismic data processing and interpretation, identification of well locations and detailed well planning and preparation.

 

Finder Energy Holdings (ASX:FDR)

The company is undertaking an entitlement offer at $0.048 per new share to raise up to around $6 million to support completion costs associated with its acquisition of a 76% interest in PSC 19-11 in offshore Timor-Leste and go-forward work program as operator of PSC 19-11.

The PSC contains four discovered undeveloped oil fields, including the fully-appraised Kuda Tasi and Jahal fields, enabling rapid progress to production with additional upside provided by low-risk appraisal and exploration opportunities.

Notably, major shareholder, Longreach Investment Capital, has provided an irrevocable commitment to take up its full entitlement under the offer, representing approximately A$3.2 million.

The directors and key management personnel have also confirmed their intention to take up their full entitlements.

 

Blinklab (ASX:BB1)

Blinklab has announced a new study to run in partnership with Monash University to evaluate the company’s medical device able to monitor the therapeutic effects of ketamine on cognitive processes.

The company is developing smartphone-based, AI-powered diagnostic tests for neurological disorders and says the study results could help facilitate cognitive behavioural therapy outcomes in patients with psychiatric conditions such as depression, schizophrenia, epilepsy, and post-traumatic stress disorder (PTSD).

 

Imricor Medical Systems (ASX:IMR) 

The first real-time iCMR-guided cardiac ablation in the US has been performed at The Johns Hopkins Hospital in Baltimore as part of Imricor Medical Systems’ pivotal clinical trial supporting US Food and Drug Administration (FDA) approval of its products.

Johns Hopkins is the second hospital to join its Vision-MR Ablation of Atrial Flutter (VISABL-AFL) clinical trial, which is looking to make the procedure safer, faster, improve success rates and be more cost effective.

The trial for FDA approval requires 91 patients to be treated with an early exit at 76 if the company meets the safety and efficacy end point of 80% success after a seven-day follow-up.

 

At Stockhead, we tell it like it is. While Greenvale Energy, Finder Energy Holdings, Blinklab and Imricor Medical Systems are Stockhead advertisers, they did not sponsor this article.

 

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