The Match Out: ASX up around 1%, Technology and Materials underpin gains, HUB24 and Netwealth attract big flows

It was a positive session for the ASX today, underpinned by strong gains in the IT and Materials sectors. Higher commodity prices and lower bond yields were a catalyst, but we also saw stock-specific updates that were generally very positive. Overall, it was a solid session, particularly for Market Matters given how our portfolios are positioned.

• The ASX 200 rallied +39pts /+0.54% to 7311, although it did fall around 50 points from the 2.30 pm high, 19 points of that happening in the Match.
• IT and Materials were the two hot sectors, although buying was fairly broad-based.
• The independent investment platform providers Netwealth (ASX: NWL) and HUB24 (ASX: HUB) stormed higher, both reporting very strong inflows in the September quarter. NWL +15.61% & HUB +8.73%. More on that below.
• Whitehaven Coal (ASX: WHC) -2.12%, on the back of quarterly production numbers that were decent.
• Redbubble (ASX: RBL) fell 12.5% after management revealed its 1Q marketplace revenue fell 28% year-on-year.
• A2 Milk (ASX: A2M) finished up +4.26% but gained more than 8% early on. As we wrote this morning, A2M is carrying a short position of around 5.7%, which was probably feeling very comfortable before yesterday’s news. If these traders decide to cover “en masse” into the good news, the ultimate rally could make yesterday’s move look tame. MM’s initial target is a break of $7.50, or 30% higher. The positive read through from the Bubs (ASX: BUB) result underpinned the rally.
• Base metal stocks did very well, Copper was up sharply last night and looks like it’s breaking out.
• Gold had a great night last night, up $US32. It tracked slightly lower in Asia today, down US$3 to US$1,789, a break back over US$1800 an ounce.
• Iron Ore Futures down -2% in Asia.
• Asian markets were mixed, Japan up +1.24%, Hong Kong closed while China fell -0.31%.
• US Futures are trading higher, up around 0.32%

ASX 200 chart 

HUB24 (ASX: HUB) $31.25

HUB +8.73%: the investment platform continues to hit the ball out of the park, today announcing record quarterly inflows for the first three months of FY22. Funds under administration grew $3 billion to $45.4 billion, up 139% year on year as more investors move to independent platforms. The company recently set some lofty targets to hit $63 billion in FUA by FY23, but it has the momentum and continues to sign more licence agreements – 30 in Q1 – that provides clear line of sight to the figure.

MM remains long and bullish HUB.

HUB24 (HUB)

Whitehaven Coal (ASX: WHC) $3.23

WHC – 2.12%: Coal miner Whitehaven was out with its September Quarter production numbers today, which looked a bit on the light side. While coal prices have been ripping higher, Whitehaven has struggled to hit production targets, though that is starting to shift. The Narrabri mine, which has struggled lately, saw production stabilise at a run rate of 6mtpa. Their flagship Maules Creek mine was forced to slow production so that it could squeeze in under their 13mtpa allowance, with just 2.6mt permitted in the final quarter which seems to have caught the market by surprise. The positive, though, is with such strong coal prices, Whitehaven is set to fully repay debt by early in calendar 2022. Overall, it’s been a reasonable quarter, with plenty of value still to be unlocked as management de-leverages the balance sheet.

MM is bullish WHC.

Whitehaven Coal (ASX: WHC)

Broker moves

• Pact Group Raised to Outperform at Macquarie; PT A$4.20

• Domino's Pizza Enterprises Cut to Neutral at Citi; PT A$148.70

• Bank of Queensland Raised to Buy at Citi; PT A$10.50

Major movers today

Make informed investment decisions

At Market Matters, we write a straight-talking, concise, twice daily note about our experiences, the stocks we like, the stocks we don’t, the themes that you should be across and the risks as we see them. Click here for your free trial.

The Match Out will be available each day after the market close. Follow my profile to be notified when the latest report is live.