The Match Out: ASX little changed, Smart Group (SIQ) rallies on contract win

What Mattered Today

The ASX 200 broke out this morning, up through 7200 to hit a morning peak of 7226, but the gains were forfeited as the session wore on - the market closed flat on the day, coming off the back of a strong week. Not a lot on the docket to drive stocks, some bits and pieces on the corporate front but a fairly muted session on low volumes.

• The Energy sector (+1.04%) enjoyed a bounce in the oil price, Materials (+0.63%) & Healthcare (0.35%) outperformed.
• IT (-0.56%), Utilities (-0.15%) and Staples (-0.04%) finished lower.
• Pact Group (ASX: PGH) +22.63% rallied as Raffy Germinder’s Kin Group upped its buyout bid to 84c from a prior 68c a share offer. The stock closed today smack on the bid price and we suspect this is now a deal that will complete.
• Sigma Healthcare (ASX: SIG) Halted after agreeing to a “transformational merger” with Chemist Warehouse and capital raise, the deal will create a $8.8bn retail player, likely in the ASX 200.
• Smart Group (ASX: SIQ) +7.44% after announcing a good contract win for salary packaging services.
• Bubs (ASX: BUB) flat after saying US revenue will double in FY24 to $48m – early strength was sold into.
• Costa Group (ASX: CGC) -3.9% poured cold water on prior guidance, saying they expect unfavourable impacts from adverse weather conditions meaning they’ll miss prior forecasts- all too common.
• Rio Tinto (ASX: RIO) +0.01% & Fortescue Metals (FMG) + 0.74% are a whisker away from all-time highs.
• Magellan (ASX: MFG) +3.33% continues to recover, closed today at $8.69 having hit a $6.02 low on the 25 October. Regal (RPL)+5.13% also strong.
• Dexus (ASX: DXS) +0.82% said that chief investment officer Ross Du Vernet will take on the role of CEO, stepping up in March.
• IGO Limited (ASX: IGO ) -1.96% has confirmed the appointment of Ivan Vella as MD, there was some conjecture over this given his clouded exit from RIO.
• Iron ore was down a touch in Asia.
• Asian stocks were mixed, Hong Kong fell 2%, Japan was up +1.5% and China dipped -0.5%.
• US Futures are mixed, Nasdaq the weakest down -0.3% - the rest flat.

ASX 200 Index - Intraday

ASX 200 Index - Daily

Smartgroup (SIQ) $8.95

SIQ +7.44%: the salary packaging & novated leasing company has got one over a rival today, picking up the South Australian Government contract off the incumbent McMillian Shakespeare (MMS). The contract will be handed over on 1 July next year, servicing the state government’s 110k employees where McMillian has 43k active services as disclosed in an announcement by the company today. The initial 5-year contract is expected to add ~$6.5m to EBITDA ~6% of current 2024 consensus expectations for Smartgroup. The announcement also came with a trading update for 2023 where the company expects revenue of ~$249m and Net Profit of ~$63m, a small beat to the $61.5m previously expected on the back of strong novated leasing volumes.

Broker Moves

• Nido Education Rated New Buy at Canaccord; PT A$1.30
• Pilbara Minerals Cut to Neutral at Citi; PT A$3.90
• Orora Reinstated Buy at CLSA; PT A$3.40
• Evolution Raised to Buy at CLSA; PT A$4.35

Major Movers Today

Enjoy the night
The Market Matters Team