September Market Update
Australian Market Update
Market Climbs to Record Highs, The Star Struggles - Author: Luke Lyon
The market is up 1.97% for the month of September, finishing at record highs as global markets continue to climb. This comes after early in the month when the index fell 2% in a single session after Wall Street sell offs. The Star continues to experience financial turmoil, earlier in the month the company the company accepted $150 million from its lenders, as well as more recently arranging a new debt facility. The Star’s new CEO Steve McCann is cutting jobs, bonuses and selling assets in an attempt to stop the company’s losses he stated was ‘on its knees’. Coles & Woolworths have also been in the news as the ACCC is suing the supermarket giants alleging false advertising of its product sales. The company’s increased prices by at least 15%, before offering a ‘sale’ price equal, or in some cases marginally higher than the original price. The ACCC is seeking penalties for both companies claiming it mislead consumers. The dollar is buying 0.6902 US dollars to end the month.
Further Reading: Star’s lenders offer $150m lifeline as casino fights for survival
Macroeconomic Article of The Month
Pressure Builds for RBA Rate Cut After Inflation Eases - Author: Alex Blyth
The RBA again decided this month to hold the cash rate steady at 4.35%, with the market showing no surprise at the decision. The RBA cited the still present high core inflation as the reasoning behind the decision. This comes after mounting pressures from the US as the Federal Reserve decided to drop rates by 0.5%. The latest labour force data showed 47,500 jobs were added in August, bolstering Australia’s workforce. Additionally, August’s inflation data was released last week, with monthly inflation falling from 3.4% to 2.7%. However, this can be mostly attributed to electricity rebates which had - 17.9% change over the month. The pressure on the RBA to lower the cash rate is increasing, and the latest inflation data may indicate that a rate cut could happen sooner rather than later.
Further Reading: Pressure mounts on RBA to cut interest rates after US Federal Reserve drops cash rate by 0.5 per cent
Stock of the Month
Sigma Healthcare (ASX: SIG) - Author: Luke Lyon
Sigma Healthcare (ASX: SIG) has been in the news recently as the company reported its half yearly results. The company increased its revenue growth by 17.3% whilst only marginally increasing costs at 2.4%. However, the company’s statutory EBIT decreased from $22.4million in first half 2023 to $6.9million in first half of 2024. Normalised EBIT increased 20.6% over the same period from $15million to $18million. Sigma Healthcare is the parent company to Amcal and Discount Drug Stores offering retail pharmacy services across Australia. The company is also in the process of merging with Chemist Warehouse, but this has been put on pause by the ACCC as the merge could create less competition in the market. The results of the investigation are expected to be released on the 28th of October.
Further Reading: Sigma Healthcare ASX Release