Closing Bell 20th February: XJO lower. SGR falls on regulatory inquiry. SUN jumps after ANZ takeover allowed

What's Affecting Markets Today

SGR, ANZ & SUN in the spotlight

Star Entertainment’s market value plummeted by over $300 million as its shares dropped more than 20% to 42¢, following the NSW casino regulator’s dissatisfaction with the company’s cultural reforms. The regulator’s decision to appoint Adam Bell, SC, for a second inquiry into Star halted trading and forced a delay in the financial update. Despite the setback, Star expressed optimism about utilizing the inquiry as an objective platform to prove its eligibility for regaining its casino license. CEO Robbie Cooke has not yet made a public statement regarding the 15-week investigation initiated by the Independent Casino Commission.

The Australian Competition Tribunal has greenlit ANZ’s acquisition of Suncorp’s banking division for $4.9 billion, overcoming initial opposition from the Australian Competition and Consumer Commission (ACCC). The Tribunal concluded that the merger would not adversely affect competition in the banking sector, highlighting the dynamic role of Macquarie as a “maverick” and the growing influence of brokers in enhancing consumer choice and mobility. Macquarie’s market share in home lending has doubled to 5.3% since early 2020, marking its rise as a significant player. The ANZ-Suncorp merger positions the entity as the third-largest home loan provider, reshaping Australia’s banking landscape.

ASX Stocks

ASX 200 - 7,659.0 (-0.1%)

Key Highlights:

The Australian stock market faced downward pressure, with the S&P/ASX 200 index dropping 6 points, or 0.1%, diverging from its recent peak. This movement echoed broader Asian market trends, where an unexpected interest rate reduction by China failed to lift investor spirits. Contributing to the bearish sentiment was BHP’s announcement of its weakest half-year profit in eight years amidst a busy earnings season.

Despite a brief uptick following China’s mortgage rate cut aimed at spurring the property market, the market’s optimism was short-lived. The Reserve Bank’s February meeting minutes indicated a pause in rate hikes, considering moderating inflation and softer economic indicators.

Sector-wise, mining and energy were the hardest hit, with Strike Energy, BHP Group, Rio Tinto, and Fortescue Metals posting significant losses. Strike Energy notably fell 22% due to operational challenges. Other notable declines included Sims, impacted by financial headwinds, and Judo Capital Holdings, which saw a minor recovery after its CEO’s resignation announcement.

Leaders

MMS Mcmillan Shakespeare Ltd 11.69%
ARB ARB Corporation Ltd 10.20%
HMC HMC Capital Ltd 10.14%
RWC Reliance Worldwide Corporation 7.55%
PRN Perenti Ltd 7.35%

Laggards

STX Strike Energy Ltd -25.86%
SGR The Star Entertainment Group Ltd -22.32%
SGM Sims Ltd -9.79%
THL Tourism Holdings Rentals Ltd -8.05%
SHL Sonic Healthcare Ltd -7.92%