• The ASX fell 0.4% after Wall Street was hit by a massive sell-off overnight
  • Wage data shows ‘real wage’ decline in 2022 is the worst in recorded history
  • Toys’R’Us wins the day by offering to buy back its own beleaguered shares

 

And that’s a wrap on 22 February for this year, and it’s pretty much been a carbon copy of yesterday’s result from the benchmark – an early, precipitous sag followed by a hopeful but ultimately unsuccessful bid to claw back to positive territory.

It’s largely Wall Street’s fault – partly because it’s easier to blame someone else when things go wrong, and partly because the ASX still follows New York’s Finest around like an ill-trained puppy.

By 11:00am today, the benchmark was down 0.9%, but a rally led by a booming Utilities sector helped it get back to a more sedate 15 point loss, before the bourse gassed itself out midway through round two and just couldn’t keep its hands up to defend itself.

The rally was prompted by data pointing at modest wage growth in Australia, despite soaring cost of living and other interest rate driven pinch points that have left large chunks of the population under serious financial strain.

As the bell rings to mark the end of trade, the ASX 200 is at -0.4%. #FrownyFace.

Utilities really stepped up to take the sting out of the day, with a +4.65% surge that turned what could have been a blood-letting into little more than a stubbed toe and a few choice words.

It had support from Staples (+1.0%) and InfoTech (+0.6%), but Discretionary (-1.6%) and Materials (-1.1%) weighed heavily enough to keep the handbrake on throughout the day.

Origin Energy (ASX:ORG) is leading the Large Caps, up 13.2% possibly because I paid my bill the other week and it was eye-wateringly massive.

The rise is far more likely to be because the Brookfield Asset Management consortium has upped its bid to a confusing $8.90 cash per share, comprising:

  • $8.90 per share for the first 100,000 shares held by each Origin shareholder; and
  • For shares above that threshold, $4.334 per share plus US$3.194 per share

At the time of writing, Origin was moving at $7.94 per share.

Fellow Large Cappers SiteMinder (ASX:SDR) and Wisetech Global (ASX:WTC) have also had solid days, up 7.5% and 5.0% respectively, both after posting healthy earnings that made investors feel nice – the way you do when you’ve just stepped out of a relaxing bath to discover that a company you like has made millions of dollars.

Looking overseas, the Nikkei is feeling the effects of the Japanese government’s decision to join the rest of the modern world by raising the national age of consent from an indescribably foul 13 to a more palatable but still questionable 16 years old.

Meanwhile in China, Shanghai’s edging downwards to the tune of -0.25%, and Hong Kong’s looking flatter than 30-odd kilos of prize Silver Highway roadkill, at just +0.03 with a few hours left to run there.

 

FROM THE HEADLINES

As previously mentioned, wage data helped mitigate a lot of the damage on the ASX this afternoon – but it really wasn’t good news for Aussie workers.

The Wage Price Index rose by 0.8% in the December quarter, lifting annual wage growth to a positively miserable 3.3%, waaaay below the 7.8% inflation that’s had wallets and purses drenched in the claret over recent months.

The end result is a real wage decline for Australians of 4.5% in 2022 – the largest yearly decline since someone decided long ago that this sort of thing needs to be kept track of.

Whether that little nugget of economic turdery (I know it’s not a word, but it bloody well should be) puts pause to the RBA’s chronic fixation on hiking interest rates every time someone says The Guvnor’s name into a mirror three times remains to be seen.

Meanwhile, fresh data from the ABS suggests that Australia is increasingly becoming the target of money-hungry ne’er-do-wells, if the sharp increase in scammer activity is to be believed.

The ABC reports that two thirds of people surveyed by the ABS’ Personal Fraud Survey for 2021-22 “reported they’ve had a scam offer or request … up from 55% the previous year”.

The good news is that there’s been a decline in the number of people who getting caught up in it all.

“The survey shows that 2.7 per cent of Australians responded to a scam in 2021-22 down from 3.6 per cent in 2020-21,” ABS head of crime and justice statistics, William Milne, said.

“About one third reported to a bank or financial institution, which remains the most common authority scams are reported to. However, we have recently seen a notable increase in reporting to the police, up from 8.2 per cent in 2020-21 to 14 per cent in 2021-22.”

 

ASX SMALL CAP LEADERS

Here are the best performing ASX small cap stocks:

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Having an absolute cracker (the fun kind, not the hyuk-hyuk ‘my house has wheels’ kind) today was beleaguered vendor of childhood distractions Toys’R’Us (ASX:TOY), which went soaring after a busy couple of days came to a head with an on-market buy-back announcement.

The company signalled its intention to buy back up to 10% of its fully paid ordinary shares, as the board reckons that the company’s price this morning – a measly $0.023 – ”does not accurately reflect the underlying value of the company’s assets”.

To be fair, even a quarter of a modestly-sized warehouse stacked with LEGO – at wholesale prices – would reflect assets worth more than that share price reflects.

The market has responded to the buy-back by indulging in an epic price-gouging binge, sending the TOY trading price up more than 60% before lunchtime. It’s since eased to $0.038, 48% up from where it was yesterday.

Early winners Altamin (ASX:AZI), climbed 21% after the market (presumably) turned in an amazingly delayed reaction to eight-day-old news that the zinc miner had hit high-grade intercepts at its Gorno zinc-lead project in Europe.

And Pure Resources (ASX:PR1) was also on a charge (and also on no particular news) this morning, climbing more than 20% on middling volume this morning – but I’m worried that I might have jinxed it, because it got sold off sharply within minutes of my reporting on it earlier today.

Leapfrogging that pair this afternoon was Jaxsta (ASX:JXT), up 27% on news that it’s set to acquire the equally-appallingly spelled Vampr, a social network aimed at helping musicians find drummers who are “fully committed”, are into the same “early influences, like Led Zep and early Megadeth”, and who are absolutely neither Posers nor Time Wasters.

The move will immediately increase Jaxsta’s footprint in the creator community by 1.3m creators, and significantly expand its potential user base for the launch of vinyl.com – the “marketplace for music fandom” that Jaxsta’s been touting for a while now, but is yet to go live.

Josh Simons, the founder and CEO of Vampr will be joining Jaxsta as Chief Strategy Officer, so there’s that, too.

Last one worth a mention today is Buxton Resources (ASX:BUX), which is up a tidy 20% following a mid-morning announcement about some healthy results out of its Graphite Bull project in WA’s Gascoyne region.

Buxton is reporting its short scout exploration RC drill program hit a perfect 5 from 5, with each hole intersecting graphite mineralisation, and pointing to a much larger resource than previously thought.

 

ASX SMALL CAP LAGGARDS

Here are the least best performing ASX small cap stocks:

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LAST ORDERS

Just a few quick ones because it’s late in the day and I don’t wanna be late for my birthday dinner.

In a spot of bad news, Allegiance Coal (ASX:AHQ) has revealed that it’s gone into voluntary administration, which is hardly surprising as it had been circling the drain for quite some time.

The company had recently announced its intention to pivot back to metallurgical production at both operating mines due to a dramatic fall in thermal prices, and the significant recovery in metallurgical prices over the last two months.

But it looks like that turned out to be too little, too late for the battered stock, which had sunk below -95% over the past 12 months, which it blamed on severe issues attracting workers to its US operations, particularly at the New Elk mine in Colorado.

So, AHQ has called in the vultures and they’ll be picking the corpse clean over the next few months, to figure out how to sort out the mess.

In ETF news, the team at Betashares has announced that it has reduced the management fee on its Australia 200 ETF (ASX:A200) from 0.07% to 0.04% per annum, positioning it as “the world’s lowest cost Australian shares ETF”.

The fee cut takes effect as of today for the popular ETF, which recently broke the record for the shortest time taken for an Australian ETF to pass $1 billion in assets, and now has over $2.6 billion in assets under management.

 

TRADING HALTS

Tribeca Global Natural Resources (ASX:TGF) – Capital raising.

Slater & Gordon (ASX:SGH) – Half year results and a potential major transaction.

The Star Entertainment Group (ASX:SGR) – Announcement regarding capital structure initiatives. ($10 says they’re gonna put it all on Red and hope for the best.)

Health and Plant Protein Group (ASX:HPP) – Announcement about the sale of HPP’s Kapua Orchard and macadamia nut business.

Allegiance Coal (ASX:AHQ) – AHQ has gone into voluntary administration, see above for more information.