The latest Market Talks covering Equities. Published exclusively on Dow Jones Newswires throughout the day.
2200 ET - Catalyst Metals' recent hedging could be a sign that the gold miner is preparing to approve a mill expansion, says UBS analyst Al Harvey. Catalyst last month said it entered into gold forward contracts of 30,000 ounces at 6,075 Australian dollars per ounce. That "may be part of risk management for an upcoming (yet modest) investment cycle, and bolsters our confidence that FID [a final investment decision] may be just around the corner," Harvey says. Catalyst is expected to provide FY27 guidance and an updated 10-year outlook in September. UBS forecasts FY27 production of 132,000 oz at a cost of A$3,066/oz. The bank keeps a buy rating and A$9.00/share target on the stock. Shares are up 0.2% at A$5.77. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)
2142 ET - Sheng Siong's healthy expansion pipeline is likely to support its long-term growth, says Tang Kai Jie at UOB Kay Hian in a note. The Singapore grocery-store operator aims to open three new stores in 3Q, which lifts its 2026 confirmed new-store total to seven, above the company's target of three to five a year, the analyst says. The new stores should be able to mitigate two potential store closures this year on lease expiries, he adds. Sheng Siong's strong net cash position is also likely able to support its expansion strategy, he says. UOB KH raises the stock's target price to 3.71 Singapore dollars from S$3.40 and maintains a buy rating. Shares are down 0.6% at S$3.24. (megan.cheah@wsj.com)
2142 ET - Press Metal Aluminium's acquisition of a controlling stake in PMB Technology could strengthen its downstream business by leveraging sustainable energy supply, RHB IB analyst Iftaar Hakim Rusli says in a note. The 465 million ringgit stake acquisition will raise Press Metal's stake in PMB Technology to 58.8%, making it a subsidiary. The deal will allow Press Metal to pivot PMB Technology's operations toward higher-margin silicon-aluminum alloy products used in electric vehicles and industrial applications, he says. While RHB is positive on the deal's near-to-medium-term strategy, it cautions that future losses at PMB Technology will be consolidated into Press Metal's earnings, although the impact will likely be less than 2% of 2026-2028 earnings. RHB maintains its buy rating on Press Metal, keeps target price at 9.80 ringgit. Shares are 0.1% lower at 7.94 ringgit. (yingxian.wong@wsj.com)
2133 ET - There are encouraging signs that Coronado Global Resources' reset is delivering a better operational performance, says UBS analyst Lachlan Shaw. However, consistency is now required to make the risk-reward more attractive, he says. "Liquidity risk has reduced after the quarter, but the balance sheet remains sensitive to met coal prices, operational disruption and working-capital absorption," says Shaw. UBS has a neutral rating and A$0.21/share target on Coronado. Shares are down 1.4% at roughly A$0.17. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)
2124 ET - Maybank's acquisition of the remaining stake in insurance unit Etiqa is a tactically positive move, giving the bank full control of a strategically important franchise while improving capital flexibility, Hong Leong IB analyst Raymond Ng says in a note. The deal could strengthen Maybank's bancassurance business by deepening cross-selling and streamlining regional insurance operations. Ng thinks execution will be key, particularly in lifting insurance penetration, improving return on equity and increasing dividend upstreaming from Etiqa over the medium term. He raises Maybank's 2026-2028 earnings forecasts by 1.4%-1.6% to factor in full contribution from Etiqa. Hong Leong raises Maybank's target price to 11.10 ringgit from 10.80 ringgit, while maintaining a hold rating on the stock. Shares are unchanged at 10.84 ringgit. (yingxian.wong@wsj.com)
2124 ET - Singapore depository receipts of Grab are higher following the ride-hailing company's stronger 2Q profit and upward revision to its annual adjusted Ebitda guidance. Grab's overall results appear solid to Citi analysts, who describe the deliveries segment's performance as particularly strong. They expect the company to offer more clarity on its revised guidance during its post-results briefing. Grab could also comment on its mobility segment's 2H Ebitda margin trend after it added a commission cap for two-wheeler rides, the analysts say. The SDRs are up 7.5% at 2.44 Singapore dollars, their largest gain since listing on July 22. Grab's Nasdaq-listed shares closed 4.9% higher at US$3.67 overnight. (megan.cheah@wsj.com)
2121 ET - Transurban gets "a big tick" from UBS analysts for avoiding radical reform to road tolls in Australia's most populous state. The analysts tell clients in a note that significant changes in New South Wales state could have materially reduced the ASX-listed toll-road operator's value. As it is, they hail the company's resolution of complex, multistakeholder negotiations and removal of a long-running overhang on the stock. They acknowledge some uncertainties over traffic impact, but don't think Transurban is unreasonable to suggest that the changes are neutral for valuation. UBS has a last-published neutral rating on the stock and a target price of 14.50 Australian dollars. Shares are up 0.1% at A$14.975. (stuart.condie@wsj.com)
2114 ET - Maybank's proposed acquisition of the remaining stake in its insurance business looks positive, with the valuation considered fair relative to listed peer LPI Capital, Public Investment Bank analyst Wong Ling Ling says in a note. The lender plans to acquire the remaining 30.95% stake in Maybank Ageas from Belgian insurer Ageas for 4.83 billion ringgit, taking full ownership of Etiqa's operations in Malaysia and Singapore. The deal should strengthen Maybank's insurance franchise while creating cross-selling opportunities across its banking, wealth management and bancassurance businesses. The acquisition is expected to be earnings accretive, lifting net profit by about 2%, she adds. Public IB maintains an outperform rating on Maybank and keeps its target price at 11.90 ringgit. Shares are 0.2% lower at 10.82 ringgit.(yingxian.wong@wsj.com)
2106 ET - Analysts at Jefferies remain bullish on Qantas Airways despite the potential for fuel prices to stay high due to the U.S.-Iran conflict. Analysts Anthony Moulder and Amit Kanwatia tell clients in a note that they are raising their expectations for December-half oil and refinery margin trends, pointing to a lack of a clear pathway to conflict de-escalation and pressure on Russian oil production. Also, Australia's inflation remains above the central bank's target range and more interest-rate rises remain likely. Nonetheless, travel demand seems resilient, they say, and remind clients that near-term fuel-cost challenges are only temporary. Jefferies keeps a buy rating but lowers its target price by 6.9% to 11.91 Australian dollars. Shares are flat at A$10.32. (stuart.condie@wsj.com)
2103 ET - An expectation that Australia's central bank might be done raising interest rates prompts UBS to assess what this means for local REITs. Under this scenario, analyst Solomon Zhang says compression in the yield curve should support strong forward returns for listed REITs over the next 6-12 months. UBS notes that Australia's REITs delivered a total return of 37% over the 12 months that followed the RBA last pausing its rate-hike cycle in November 2023. Then, REITs outperformed stocks on the ASX 200 index, excluding banks and resources companies, by 22%. UBS has buy calls on HMC Capital, GPT, Charter Hall and Ingenia Communities, among other stocks. (david.winning@wsj.com; @dwinningWSJ)
2056 ET - Morgan Stanley analysts want much more disclosure from Australia's major banks on mortgage-market trends. With government making changes to property related tax concessions, the MS analysts expect investors to use this month's annual result announcement by Commonwealth Bank to pepper the market leader with questions on the level and mix of recent mortgage applications. They also anticipate questions on the response to policy changes from existing and potential property investors, lead indicators on draw-down conversions, and the likely impact of the changes on growth. More broadly, they don't expect Commonwealth, NAB, Westpac or ANZ to provide guidance on earnings, revenue, margins, or loan losses. (stuart.condie@wsj.com)
2047 ET - Life360's bull at Macquarie sees the launch of a dedicated Apple Watch app offering as a likely tailwind to paid subscriptions. A note from one of the investment bank's analysts highlights the July launch of the watch app, pointing out that it extends the location-tracking platform's reach to younger children yet to own a mobile phone. The analyst explains that this adds to the potential growth of monthly active users, and creates an earlier opportunity for converting users to paid subscribers. This is particularly relevant in the high-value U.S. market, the analyst adds. Macquarie keeps an outperform rating on Life360's Australia-listed stock and lowers its target price 6.0% to 31.10 Australian dollars on moderated hardware and advertising expectations. Shares are up 6.8% at A$27.29.
Comments