Miners lift shares; Pilbara Minerals pops 5pc, US dollar falls

Corporate regulator ASIC has banned Sydney stockbroker and capital markets adviser Adam Blumenthal from being involved in financial services for five years. It also ordered his advisory company, Everblu, to cease offering financial services to new clients.

“ASIC has commenced civil penalty proceedings in the Federal Court against Adam Blumenthal alleging market rigging and breaches of his duties as a director of two companies, EverBlu Capital Pty Ltd (EverBlu) and Creso Pharma Limited (now known as Melodiol Global Health Limited)(Creso),” ASIC said in a statement on Friday afternoon.

Australian Clinical Labs says it will withdraw its takeover bid for pathology peer Healius after competition regulator the ACCC moved to block the deal on Friday.

Shares in both businesses traded about 2 per cent lower after the announcement.

Two economic developments this week suggest that interest rate cuts could be coming before the next federal election. If such cuts eventuate, it would be a game-changer for the political debate.

First, the federal Treasury in the government’s mid-year budget update forecast inflation to gradually ease back inside the Reserve Bank of Australia’s 2 per cent to 3 per cent target band by the June quarter 2025 – six months earlier than the RBA expects.

Second, the world’s most influential central bank, the US Federal Reserve, pencilled in the prospect of three 0.25 of a percentage point cuts next year.

Read the full story here. 

National Australia Bank chairman Phil Chronican is “cautiously optimistic” despite the slowing economy, with the financial services giant predicting the nation will narrowly avoid a recession and tiptoe to a soft landing.

Chronican warned investors on Friday that the economic environment was still uncertain and “there are new and emerging risks to be managed”.

“While the Australian economy is slowing, it is still growing and Australia is in a good position,” he told NAB’s annual meeting. “We are cautiously optimistic about the future but also alert to the geopolitical tensions at play.”

Read the full story here.

Shares in West Australian lithium hard rock producer Pilbara Minerals are up 5 per cent to $3.98 today as paper prices of the battery metal traded in China rebounded over the second half of this week.

As at December 11, Pilbara had 20.8 per cent of its stock shorted by traders betting on the price to fall.

Other lithium and rare earths plays are rallying on Friday as traders bet a lower US dollar will boost commodity prices.

Minerals miner Iluka Resouces says its Eneabba rare earths refinery project in Western Australia is likely to be delayed, with costs about 20 per cent more than the market’s expectation of $1.5 billion.

The group blamed a “challenging” environment in Western Australia for the increased capital costs.

Shares are down 0.4 per cent to $6.77 on the news.

A rally in metal and energy prices lifted the S&P/ASX 200 0.8 per cent at lunchtime as the falling US dollar boosted the price of copper, gold, oil, iron ore and natural gas.

The materials sector added 2.1 per cent, with Fortescue Metals hitting a record high of $28.15. Rio Tinto and BHP both gained, and gold miners were also higher as its price reached $US2052 an ounce.

“Copper rallied along with the rest of the base metals sector after Wednesday’s [Federal Open Market Committee] meeting, where policymakers signalled the possibility of rate cuts in 2024,” ANZ Bank told clients. “The move unleashed a bullish tone across the metals sector, which has been under pressure this year amid concerns the tighter monetary policy of central banks would weigh on economic growth and ultimately demand.”

On Wall Street, the Dow Jones Index closed at a record high, up 0.4 per cent to 37,248 points. The tech-heavy Nasdaq Index added 0.2 per cent and the small-cap index the Russell 2000 extended a big rally on Thursday to jump another 2.6 per cent.

The yield on US 10-year treasuries sank 9 basis points to 3.93 per cent.

Earlier, equities climbed around the world on the Fed’s pivot to reverse the steepest rate rises in a generation. US retail sales data and jobless numbers reinforced the soft landing narrative.

Stocks in focus

Chemist Warehouse target Sigma is down 4.8 per cent to 99.5¢ as the two groups push to get a proposed merger across the line. Analysts are divided on whether the ACCC will approve the deal.

Earlier on Friday morning, the regulator knocked back a proposed merger between pathology group Healius and Australian Clinical Labs.

Afterpay-owner Block jumped 4.5 per cent in early trade to $111.50 as investors cheered plans to slash interest rates in the US.

Heavily shorted lithium play Pilbara Minerals jumped 4.5 per cent as the battery metal price rallied.

Iron ore giant Fortescue advanced 2.5 per cent to a record high of $28.15.

Property management group Dexus has decreased the value of its office and industrial properties portfolio by 5.2 pe cent or around $762.4 million as at December 31, 2023.

It blamed the outcome on higher discount and capitalisation rates offset by rental market growth.

Shares are down 1 per cent to $7.86 and have advanced 2.5 per cent in 2023.

Shares in lithium brine producer Allkem are up 4.5 per cent to $10.51 after it said it has signed a benefit and impact agreement with the Grand Council of the Cree Nation Government for its James Bay, Lithium Project in Quebec, Canada.

James Bay is among a number of ASX-listed Canadian lithium projects that analysts say face serious permitting hurdles due to local land rights and rules around responsible use of lands.

Other lithium miners are rallying today as the price of the battery ingredient recovers in China.