Shares finish Friday up 0.8pc

Tom Richardson

A 2.5 per cent advance in the tech sector helped the S&P/ASX 200 climb 0.8 per cent on Friday, with the energy and materials sector adding 1.8 per cent and 1.7 per cent respectively.

Copper, iron ore, and lithium producers Oz Minerals and Mineral Resources finished up 6 per cent and 5.4 per cent respectively as two of the top-five performers among the ASX200.

The best member of the technology sector was Nearmap, which finished up 4.8 per cent.

On the other side of the ledger, gold miners Silver Lake, Regis, and Northern Star all dropped more than 3 per cent after gold’s mini-rebound stalled as risk-free yields threaten to rise further.

Small caps shine, shaking off growing pains

Tom Richardson

The recovery in the domestic economy has helped drive strong returns in the small and mid-cap sector, even as rising bond yields wreak havoc with growth stocks, typically the bellwethers of the smaller end of the market.

The major banks and miners have dominated the market gains over the last two months, driven by a rotation into value and soaring commodity prices supporting the miners. However, the small and mid cap space has kept up the pace.

The S&P/ASX Small Ordinaries Index has risen 2.9 per cent since the start of February while the S&P/ASX 100 Index has climbed 2.5 per cent.

The recovery trade has driven terrific returns in the some of the domestically exposed retailers and travel stocks, and commodity prices from rare earths to nickel have rewarded the rest.

“People are looking at small caps, seeing opportunities and realising there’s still good value in the market,” said Celeste Funds Management portfolio manager Paul Biddle.

“Our call in reporting season was that the stocks exposed to domestic activity would do well and they did. We expect that domestic activity levels will remain stronger for longer.”

Reporter Will McIness has more on the smaller companies outperforming here.

Afterpay notes to list on SGX March 15

Tom Richardson

Buy now, pay later giant Afterpay says its issue of $1.5 billion of debt in notes potentially convertible into shares in the future has settled with the notes due to list on the Singapore securities exchange on March 15.

Afterpay said the settlement of the notes means it can now move to buy out the ownership interest of private US investor Matrix Capital in Afterpay’s US business.

Afterpay shares traded up 2.7 per cent to $113.95 on Friday afternoon.

Afterpay’s Nick Molnar and Anthony Eisen in Sydney on February 21.  Eamon Gallagher

Tech comeback lifts US sharemarket to record high

Tom Richardson

Technology stocks pushed the US sharemarket to a record high on Thursday in New York, driven by calming worries over inflation and the latest round of fiscal stimulus that could result in $US1400 ($1800) cash deposits arriving for millions of Americans this weekend.

The S&P 500 gained 1 per cent to reach 3939 points, eclipsing the prior record set a month ago and marking a 4.8 per cent rise since the year began.

The new peak caps a roaring rally that has pushed the benchmark 16 per cent above the level reached before the pandemic struck financial markets more than a year ago.

The performance was driven by the tech sector, with the Nasdaq composite benchmark adding 2.3 per cent for the day. Despite the rally, the tech-heavy index remains more than 5 per cent below its February high.

Reporter Richard Hendersen has more here on why veteran investor Jim Paulsen thinks it “might be hard to keep the market down” ahead.

Regal’s Global Alpha up 20pc in Feb

Vesna Poljak

Regal Funds Management’s Global Alpha strategy was up 20.6 per cent last month in gross terms, and is up 218 per cent over one year, according to the latest update from the multi-strategy listed investment company Regal Investment Fund.

The LIC’s net asset value rose 4.2 per cent to $4.10 a share, and has advanced 10.6 per cent year to date after rising 46 per cent in value last year. The next best contributor last month was Regal’s Emerging Companies Fund III up 7.7 per cent or 108 per cent over 12 months.

UBS hikes oil price forecasts

Tom Richardson

Broker UBS has hiked its oil price forecast for 2021 from $US57 a barrel to $US65.50 a barrel. For 2022 UBS lifts forecasts from $US60 a barrel to $US62 a barrel.

“The higher oil prices reflect the market’s appetite to price in a faster demand recovery (vs UBSe) and the outcome of the recent OPEC+ meetings where producers (ex. Russia and Kazakhstan) agreed to defer raising production,” the broker wrote.

As a result of the stronger oil price forecasts, UBS lifts its earnings estimates for Oil Search, Woodside and Santos by 8 per cent to 51 per cent through FY 2021 and FY 2022. It said its longer term oil price outlook remains unchanged.

Santos remains UBS’s number one pick across a recovering energy sector. “It is currently trading with the lowest 2021E EV/EBITDA (5.2x FY21E) and implied oil price ($56/bbl) and has near term price growth catalysts” UBS said.

Saudi Energy Minister Abdulaziz bin Salman agreed to Saudi production cuts at an OPEC meeting this week. Bloomberg

The broker said its next two most preferred picks in the energy sector are Origin and Woodside. Origin can pay out a cash distribution around $650 million from its APLNG project in FY 2021, according to the broker.

Sheffield Resources receives Yansteel investment

Tom Richardson

WA-based mineral sands resources developer Sheffield Resources says it has received a $130 million payment from Yansteel to acquire a joint 50 per cent joint interest in Kimberly Sands, which is part of the Thunderbird tenements in north-western Australia.

The Kimberly Sands project is due to get a final investment decision (FID) on further development by 2021.

Sheffield Resources shares are down 1.4 per cent to 36 cents today on a market cap around $123 million.

Auckland’s COVID-19 restrictions lifted

Tom Richardson

Auckland casino, hospitality, and leisure complex operator Sky City says it can move to New Zealand’s COVID-19 ‘alert level one’ from 12pm midday today and operate on an unrestricted basis.

Its casinos in Hamilton and Queenstown, New Zealand, already operate on an unrestricted basis.

SkyCity’s ASX-listed scrip last traded at $3.07.

Court approves Coca-Cola Amatil shareholder vote

Tom Richardson

Coca-Cola Amatil has gained Supreme Court permission to convene its scheme meeting where shareholders will vote on a near $10 billion takeover offer from Coca-Cola Europe.

Coca-Cola Amatil’s board and an independent expert have recommended shareholders vote in favour of the scheme at a meeting to be held virtually on April 16.

Coca-Cola Amatil shares last traded at $13.45.

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