The latest Market Talks covering Equities. Published exclusively on Dow Jones Newswires throughout the day.
2103 ET - Crude palm oil prices could trade between 4,400 ringgit and 4,600 ringgit a ton in the near term, supported by rising geopolitical risks, strengthening El Nino conditions and higher biodiesel demand in Indonesia, says Ivy Ng Lee Fang of CIMB Securities. Stronger El Nino conditions could weigh on Southeast Asian yields with a lag, posing downside risks to supply from 2027 onwards, the analyst says. Disruptions in sunflower-oil exports from Russia and Ukraine could also boost palm oil substitution demand ahead of India's festival season. CIMB raises its CPO price forecasts for 2026 and 2027 by 50 ringgit a ton each to 4,450 ringgit and 4,550 ringgit a ton, respectively. It remains overweight on Malaysia's plantation sector, and pegs IOI, Kuala Lumpur Kepong and Hap Seng Plantations as its top picks. (yingxian.wong@wsj.com)
2052 ET - Life360's bull at Citi sees a number of positives from its latest quarterly update despite the disappointing lack of an earnings guidance upgrade. Analyst Siraj Ahmed flags strong growth in paying subscribers, a pickup in international user growth, a better-than-expected Ebitda margin, and U.S. price rises linked to the location-app developer's launch of its pet tracker product. However, June-quarter advertising gross margin fell short of Ahmed's forecast. He tells clients in a note that Life360's unchanged Ebitda guidance means that its 3Q earnings could miss consensus by a distance. Citi has a last-published buy rating on Life360's U.S.-listed stock. Its ASX-listed stock is down 14% at 25.38 Australian dollars. (stuart.condie@wsj.com)
2051 ET - Malaysia's August palm oil stockpile increase should be limited as seasonally higher production is expected to be partly offset by resilient exports, Hong Leong IB analyst Chye Wen Fei says in a note. Exports are expected to be helped by India's festive-season restocking and palm oil's price competitiveness against soybean oil, she says. Chye expects elevated crude palm oil prices to persist through 2H amid tightening supply and resilient demand. She favors planters with predominantly upstream operations and greater exposure to Malaysia, given their higher earnings leverage to CPO price strength and lower exposure to foreign regulatory risks. Hong Leong maintains an overweight rating on Malaysian plantation sector, pegging Hap Seng Plantations as top pick. (yingxian.wong@wsj.com)
2041 ET - Jarden pares its medium-term dividend outlook for Contact Energy as it adjusts to it possibly becoming involved in data centers. Contact has agreed with CDC Data Centres to assess a potential data center at Stratford, New Zealand. The companies plan to seek resource consent for a 250-megawatt data center near the site of Contact's closed Taranaki Combined Cycle gas power plant. Jarden notes Contact's FY 2027 dividend guidance of NZ$0.42/share represents a 101% payout on a trailing cash flow basis. "To account for potential equity co-investment in large-scale digital infrastructure, we have prudently reduced our dividend payout assumption from FY28 onwards to 80% of four-year trailing per-share cash flow, at the bottom end of Contact's 80-100% target range," analyst Grant Swanepoel says. (david.winning@wsj.com; @dwinningWSJ)
1941 ET - Bank of Queensland's plan for returning capital following its whole-of-loan equipment finance portfolio sale to Challenger doesn't change Jefferies's bearish view of the stock. Bank of Queensland intends to pay a special dividend of A$0.15/share. It also plans to buy back shares worth up to A$196 million on market. "While the capital return provides clarity on surplus capital deployment, we remain cautious on the medium-term outlook," says analyst Andrew Lyons. "Housing balances continue to decline, with growth increasingly reliant on (late-cycle) commercial real estate." Jefferies retains an underperform call on Bank of Queensland and lifts its price target by 0.7% to A$5.68/share. Bank of Queensland ended Monday at A$6.83. (david.winning@wsj.com; @dwinningWSJ)
1930 ET - Shares in SGH are likely to fall after lower-than-expected FY27 guidance, Barrenjoey says. ASX-listed industrial conglomerate SGH issued FY27 guidance for flat to low-single-digit EBIT growth. That is below consensus for 3% growth--or 5% growth versus the new FY26 base--says the Australian investment bank. SGH reported FY26 EBIT growth of 1%, at the bottom end of guidance. Coates is the driver of the slightly softer result, Barrenjoey says. "On the positive side, operating cash flow was better" than expected--up 7% versus consensus--resulting in net debt of A$3.7 billion coming in lower than expected, it says. Barrenjoey has an "overweight" rating and A$55.00 target on SGH. Shares ended Monday at A$46.34. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)
1903 ET [Dow Jones]--Australian stocks look set for an uncertain start to a session that will straddle the Reserve Bank's latest interest-rate decision. Local stock futures are down by less than 0.1% ahead of Tuesday's session, suggesting that the S&P/ASX 200 will barely move at the open. Many economists expect the RBA to hold the cash rate for a second straight meeting, but to talk up the potential to resume increases if inflation remains stubbornly high. Ahead of the open, industrial conglomerate SGH reported a 32% increase in annual profit and raised its dividend. Life360 raised its annual subscription revenue guidance. U.S. indexes finished modestly lower as Iran refused to reopen the Strait of Hormuz. (stuart.condie@wsj.com)
Tabcorp's planned purchase of gaming tech company BetMakers Technology Group for A$283 million appears sensible to Jefferies. "The deal is aimed at accelerating growth across A$350 million of International/Media revenue while enhancing B2C capabilities through improved technology, data and media assets," says analyst Kai Erman. Tabcorp expects to make some A$30 million of savings from combining the businesses. It expects the deal to boost EPS from the second year after it completes. Jefferies retains a hold call on Tabcorp, and raises its price target by 5.6% to A$0.95/share. Tabcorp ended Monday at A$0.915. (david.winning@wsj.com; @dwinningWSJ)
1901 ET - U.K. retail sales rose slightly in July as England's progress to the latter stages of the FIFA World Cup boosted food and drink sales, a report shows. However, non-food sales were hit by lower footfall due to soaring temperatures, according to the report from the British Retail Consortium and KPMG. For the period from July 5 to Aug. 1, total retail sales in the U.K. increased 1.3% on year, the report says. "Consumer demand has struggled in the heat, leaving retailers facing a challenging start to the second half of the year," BRC Chief Executive Helen Dickinson says. Despite the modest rise in July, consumers' budgets remain stretched due to the challenging economic context, while retailers continue to grapple with higher costs, Dickinson adds. (andrea.figueras@wsj.com)
1859 ET - Australian stocks look set for an uncertain start to a session that will straddle the Reserve Bank's latest interest-rate decision. Local stock futures are down by less than 0.1% ahead of Tuesday's open, suggesting that the S&P/ASX 200 will barely move at the open. Many economists expect the RBA to hold the cash rate for a second straight meeting, but to talk up the potential to resume increases if inflation remains stubbornly high. Ahead of the open, industrial conglomerate SGH reported a 32% increase in annual profit and raised its dividend. Life360 raised its annual subscription revenue guidance. U.S. indices finished modestly lower as Iran refused to reopen the Strait of Hormuz. (stuart.condie@wsj.com)
Now is not the time to turn bullish on homebuilder Mirvac, suggests Jefferies. "With no signs emerging of an inflection point in the residential housing market, we believe sentiment pressures will continue to weigh on the stock in the near term," analyst Andrew Dodds says. Jefferies has a hold call and A$1.80/share price target on Mirvac, which ended Monday at that level. Jefferies says the outlook for Mirvac's settlement volumes seems OK, largely due to an expanding active project base. The business is also supported by default rates near decade-lows and gross margins on non-impaired lots tracking back above its 18-22% target. Mirvac is due to report its FY26 result on Aug. 19. (david.winning@wsj.com; @dwinningWSJ)
1843 ET [Dow Jones]--Arena REIT loses a bull in Jefferies after one of its tenants, childcare operator Edge Early Learning, failed to pay rent in August. Analyst Andrew Dodds says it raises questions around tenant health and visibility over the remainder of Arena REIT's portfolio. "Cost of living and regulatory pressures are seeing childcare occupancy rates and operator profitability ratios fall," Jefferies says. Arena REIT's share price fell by 22% on Monday after disclosing Edge Early Learning's difficulties. It means the stock is now trading at a 30% discount to net tangible assets. Despite this, Jefferies thinks "concerns around contagion risk across the sector will likely weigh on the share price in the near term." It downgrades Arena REIT to hold, from buy, and cuts its price target by 24% to A$2.74/share.
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