ASX Live Coverage Summary – June 2

Welcome to the ASX live updates for June 2, where we share the latest developments shaping the Australian financial landscape. Refresh regularly to stay informed and feel free to offer feedback on our new format.

Cash Converters Acquires UK Franchise Stores

9:10 AM
Cash Converters has announced the acquisition of 10 franchise stores in the UK for $15.7 million, funded through a new Lloyds Bank facility. This acquisition is expected to enhance the company’s earnings, increasing its UK operations to a total of 58 corporate and 134 franchise stores.

Key Metrics:

• Market Capitalisation: $170 million
• 1H25 Results: Revenue of $192.1 million, Operating EBITDA of $36.5 million, Cash reserves of $57.3 million
• FY24 Performance: NTA of 28.4 cents per share, with a current share price of 27.5 cents
• Dividend: 2 cents per share (EPS of 2.8 cents), yielding 8.3%

Source: ASX Announcement | Cash Converters (CCV)

China’s Manufacturing PMI Shows Contraction

9:00 AM
China’s latest manufacturing and non-manufacturing PMIs reflect mixed signals, indicating cautious growth and persistent deflation.

Manufacturing PMI:

• Latest Figure: 49.5 (up from 49 in April) – indicates contraction for the second consecutive month.
• Production: Rebounded into expansion.
• New Orders: Contracting at a slower rate; exports declining less sharply.
• Employment & Inventory: Remain in contraction, although employment showed slight improvement.
• Price Trends: Ongoing decline in input and output prices fuels deflation concerns.
• Bright Spots: High-tech manufacturing expanded for the fourth month; consumer goods entered a growth phase.

Non-Manufacturing PMI:

• Latest Figure: 50.3 (down from 50.4 in April) – missing the 50.6 consensus.
• Sector Performance: Construction growth has slowed; slight improvements in the service sector.
• Real Estate & Capital Markets: Continued contraction, remaining below the critical threshold.

Composite Index:

• Increased to 50.4 from 50.2, suggesting a slight uptick in overall activity.

Merger of Soul Patts and Brickworks

8:55 AM
Washington H. Soul Pattinson and Brickworks are merging, forming a new ASX-listed entity expected to have a market capitalisation of $14.2 billion.

Key Merger Highlights:

• Value Creation: The merger aims to streamline operations and enhance shareholder value through increased scale and a simplified structure.
• Benefits for Shareholders:
  • Soul Patts investors gain access to Brickworks’ quality assets in building products and property.
  • Brickworks investors will benefit from Soul Patts’ diversified asset portfolio across various investment strategies.
• Shareholder Valuation: Brickworks shareholders are slated to receive an implied value of $30.28 per share, reflecting a 10.1% premium on the last closing price.

Source: ASX Announcement | Soul Patts (SOL)

Noteworthy Articles from Livewire

• How to Buy Something for Nothing on the ASX: Explore strategies for identifying undervalued ASX stocks, featuring three stock picks such as Orica and Aquirian.

• Why Europe is Home to Hot Stocks: Europe’s markets outperform with stocks like ASML and Novo Nordisk, underpinned by strong fundamentals and a 20-year valuation discount, drawing investor attention to the Euro Stoxx 50.

• Two Growth Portfolios Targeting 9%+ p.a.: Discover ASX growth portfolios crafted by experts, balancing high-conviction picks like CSL and WiseTech for optimal returns amid market volatility.

Market Overview

8:50 AM
US markets have concluded mostly lower, with the S&P 500 and Nasdaq dipping 0.01% and 0.32% respectively.

Key Factors Influencing Stocks:

• Recent Performances: The S&P 500 and Nasdaq recorded 6.15% and 9.56% rises in May, marking their best monthly returns since November 2023.
• Earnings Reports: Companies like Dell, Costco, and Zscaler reported positive results, boosting market confidence.
• Tariff Concerns: Renewed risks from US-China trade negotiations, with Trump announcing plans to double tariffs on aluminium and steel.
• Inflation Metrics: US April core PCE exhibited a 0.1% month-on-month rise, aligning with expectations, while personal spending growth slowed to 0.2%.

Morning Market Outlook

8:45 AM
S&P/ASX 200 futures point to a modest start, gaining 8 points or 0.09%. For those new to this coverage, make sure to review today’s Morning Wrap for a quick briefing.