• The ASX 200 rose up 0.66% and ASX XEC was also up 0.55%
  • A solid 9 out of 11 sectors were higher, with Energy leading the way
  • ABS says owner-occupier refinancing is on the rise, cos interest rates suck

 

The ASX 200 gained 0.66% today and the ASX XEC was up 0.55%, with 9 out of 11 sectors higher, led by Energy which rallied by 1.50%.

Coal player New Hope Corporation (ASX:NHC) was up 5.07% followed by Oil & Gas giant Santos (ASX:STO) up 2.38%.

In unsurprising news, the Australian Bureau of Statistics (ABS) says refinancing reached another record high in November, with the value of owner-occupier refinancing between lenders rose 9.1% to a new high of $13.4 billion in November, while total new loan commitments for housing fell 3.7%.

“More borrowers switched lenders for lower interest rates as the RBA’s cash rate target continued to rise,” acting ABS head of finance and wealth Dane Mead said.

The number of new loan commitments to owner-occupier first home buyers fell 5.5%, with first home buyer loans in November 51% below their January 2021 peak and 16% below the February 2020 pre-pandemic level.

That’s 1.5% more of a drop than expected by CBA economist Stephen Wu, who forecast -4% drop for new housing lending.

This makes for the 10th consecutive monthly decline in new housing credit.

“Rising interest rates are crimping borrowing power and continued home price declines are weighing on housing sentiment and demand,” Wu said.

“Our internal CBA lending data for November also point to a decline in the month.”

Looking at personal finance, there was a 9.3% fall in lending for personal investment and lending for the purchase of road vehicles fell 2.9%.

But there was a 5.1% rise in lending for the purchase of household goods to a new all-time high, while lending for travel and holidays remained slightly higher than pre-pandemic levels, the ABS said.

 

NOT THE ASX

European stocks rallied on Thursday after data showed US inflation eased again in December, supporting expectations that the Federal Reserve will slow the pace of interest rate rises further. 

The pan-European Stoxx Europe 600 rose 0.73%, while the German DAX and the French CAC 40 both added 0.74%.

Great Britain’s FTSE 100 Index ended 0.9% higher as several UK trading updates suggested the cost-of-living crisis is not having as big an impact on some sectors as feared, AJ Bell analyst Danni Hewson said in a note.

“Housebuilders and retailers have found plenty to be cheery about, if only because things seem to have brightened considerably for the UK economy in the last few months,” IG analyst Chris Beauchamp said in a note. 

In the US, consumer price inflation slowed to 6.5% in December, down from 7.1% in November, the Labor Department said. 

Despite landing largely in line with economists’ expectations, one measure of services inflation – excluding energy services and the cost of owning or renting a home -offered encouragement that tighter monetary policy is proving effective.

The data was “a mixed bag when you dig into the nuance,” said Andrew Patterson, senior economist at Vanguard, adding that he will be closely watching Fed officials’ comments between now and the end of the month to get a better sense of where the Fed might be headed.

 

ASX SMALL CAP LEADERS

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The biggest winner was Greenwing Resources (ASX:GW1) who are cashed up to accelerate outstanding option payments and pay its share of development expenses for the San Jorge lithium project in Argentina after completing a placement of 21.8 million shares worth $12m to Chinese EV maker NIO.

The lithium brine project consists of 15 granted exploration licences covering 38,000 hectares.

Geophysics has indicated a basin depth of up to 600m while brine samples have returned results of up to 285mg/l lithium.

The project is located in close proximity to large third party resources and mines. It may also be suitable for direct lithium extraction to produce lithium hydroxide.

 

 

ASX SMALL CAP LAGGARDS

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LAST ORDERS

Tech venture firm Fatfish Group (ASX:FFG) appointed industry veteran Andrew Bruce as a non-executive director, effective immediately.

“With over 30 years of experience, Mr Bruce helped pioneer the growth of the Australian and Asian technology and asset finance sectors,” FFG says.

“Mr Bruce has acted as an advisor on IPOs, asset-backed financings, and Debt Capital Markets issues in China, Australia, London, the UAE, & Singapore.

“He has led investment and advisory transactions in e-commerce, edtech, consumer finance, and telecom infrastructure, alongside a multitude of other major projects across the resources, green energy, real estate, and mortgage sectors.”

Explorer Estrella Resources (ASX:ESR) received $1.015m as a refundable tax offset for research and development (R&D) spending at the Carr Boyd nickel project during the 2021-22 financial year.

The R&D – which included experts from the CSIRO — was primarily focused on testing theories relating to the formation processes responsible for the mineralisation at Carr Boyd.

And the ASX has determined that Atlas Pearls (ASX:ATP) is no longer required to lodge quarterly activities and quarterly cashflow reports (Appendix 4C) as the company has “pleasingly” reported positive net operating cashflows for the last four quarters.

Atlas operates seven pearl farms spread across the Indonesian archipelago, including Bali, Flores, and West Papua.

 

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